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Oct 20, 2020

How it works

Once an employer is registered with Your Staff Benefits - Childcare Vouchers, working parents are entitled to exchange a part (up to £55 per week, equivalent to £243 per month) of their gross salary for Childcare Vouchers. This part of their salary, known as a ‘salary sacrifice’ is exempt from Tax and National Insurance Contributions, which means your employee can make savings of up to £1,196 per year on their childcare costs.

Childcare Vouchers are National Insurance exempt for employers. The savings employers make are always greater than the cost of running the scheme.   
What is a salary sacrifice?

The most common way to provide employees with childcare vouchers is via a salary sacrifice, where childcare vouchers are offered as part of an employees existing salary. The employee sacrifices part of their wages in return for a similar value in vouchers.

A salary sacrifice is a binding agreement in employment law, both parties are protected by legislation when entering into a salary sacrifice agreement. You pay no NI on the amount agreed and your employee pays no NI or tax too, so everyone saves
More information about salary sacrifice can be found on the HMRC website - click here  

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