How the scheme works
Childcare vouchers is a scheme for parents to receive tax free vouchers through their employer to help pay for their childcare cost.
Your employer may choose to operate a salary sacrifice scheme for their childcare voucher scheme. This will only be acceptable for your employer to offer you the voucher scheme if your cash salary does not go below the National Minimum Wage. The maximum you can choose to take through the Childcare Vouchers is up to the value of £2,916 per year. If a portion of your salary is chosen by you this is up to £243 a month or £ 55 per week. The voucher amount you receive will be exempt from NIC National Insurance Contributions and Tax.
The ages Childcare Vouchers cover for children
You can claim childcare vouchers from your employer to help pay for childcare if your child/children are under the age of 15 (only until 1st September following their 15th birthday), or if you have a disabled child/children the age is 16 (only until 1st September following their 16th birthday).
How do I save money
If you choose to have some of your salary paid as Childcare Vouchers (this is up to £55 per week or £243 a month), you will not pay tax or NICs on that amount of vouchers you receive. Your remaining wages are greater after paying for your childcare with vouchers than if you had paid in cash. If your maximum amount of voucher allowance is taken a parent can save up to £1,196.00 per year (this does depend of the amount you pay on NI and Tax).
Childcare vouchers: Are you better off calculator, see link below;-
Government Childcare Vouchers Calculator
Not all employees may be eligible to register in a childcare voucher scheme
You may not be eligible to receive childcare voucher through your employer if:
- Your children are not cared for by a qualifying childcare service (you may use other care coices such as member of the family or a friend).
- You may not earn a sufficient salary (salary sacrifice cannot reduce your pay so it falls below the National Minimum Wage).
- If you already receive working tax credit.
Will my partner/husband be able to receive vouchers as well?
You could save double the amount if your partner’s employer also runs a childcare voucher scheme, you can both join. It is not about the number of children you have, it is down to the National Insurance and Tax contribution exemption that will be applied to both of you as an employee.
