Many employers support their staff with their childcare needs, including providing financial assistance or on site childcare services. Employers are able to offer staff financial support that is exempt from tax and National Insurance Contributions. The amount currently exempt from these contributions is £55 per week or £243 per month for basic rate tax payers. (There is increased exemptions on workplace childcare.) This support can be provided in three ways:
- Childcare vouchers;
- Directly-contracted childcare; and
- Workplace childcare provision.
There are two ways that your employer can offer you support with your childcare, either as a benefit offered in addition to your cash salary – salary plus – or by you reducing your cash salary and receiving instead an amount towards your eligible childcare costs – salary sacrifice.
All forms of employer-supported childcare have specific conditions that must be met by both you and your employer. Information is available on this from https://www.gov.uk/help-with-childcare-costs/childcare-vouchers