This is a government scheme allowing the parent/s to save on their Tax and National Insurance payments.
The employer needs to join a Childcare Voucher scheme (there are many available and it is a very simple process). The parent then ‘surrenders’ part of their salary directly into the scheme; at present, the limit for Tax/NI savings is £243 per month. The Childcare Voucher company will then pay this money directly to the chosen child carer; this can be a Day Nursery, a Pre-school, an After School Club, a Childminder, almost any child carer excepting a relative. The scheme can be used for children up to the age of 16 years. Both parents can join the same scheme or different schemes if they have different employers. It is also possible for grandparents to join a scheme to help with their grandchild/rens childcare costs.
The saving can amount to £933 per parent. If both parents can use the scheme then they have saved £1866 towards their child care fees.
The employer also saves money on their own employer National Insurance payments. So you can virtually give your employee a pay rise of £933 and save yourself money too. For companies with a large number of employees who are parents this can add up to a substantial annual saving on the payroll.
As well as agreeing to part time working to enable your employees to achieve a better balance between their work life and their home life, you can help all employees, full and part time to save money on childcare fees.
If a full time employee is working 35 hours, 5 days week of 7 hours a day, consider whether they need to be at their place of work 5 days a week, or whether they could work their hours across 4 days, ie 3 days of 9 hours and 1 day of 8 hours, still 35 hours. By dropping one day a week, the family can save a whole day of childcare fees. Most nurseries are open 8am to 6pm, some longer, opening at 7.30am and/or closing at 6.30pm.
For example, if the daily childcare fees are £49 per day, the saving is £2,548 per annum. You have ‘given’ your employee that money back into their household income without it costing you a penny.
What if you employed BOTH parents? If each of them was able to stay at home for one day a week, they would save £5096 and have the satisfaction of being Mum or Dad for one day a week as well as being able to continue with their chosen profession/employment.
Member since: 10th July 2012
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