Childcare vouchers are a means of paying for childcare that can help you save on your childcare outlay. By paying for your childcare in vouchers, the first £243 a month is exempt from tax and National Insurance Contributions (NIC) for employees. Any taxable income is reduced by this amount, thereby saving money on childcare costs.
The savings can be significant. Those paying 40% tax can save over £1000 a year in childcare expenses and those in lower tax brackets can realise savings of around £800 a year. Furthermore, it is possible for both employed parents to claim exemptions to make annual potential savings of up to £2,300 for higher taxpayers and £1,900 for those in lower tax bands.
Childcare Salary Sacrifice Scheme FAQs
If you have any questions about the scheme, please contact your Business Manager.
To speak to one of our tax experts call 0800 434 6402.
