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Paying for childcare - Help from your employer

If you are working, ask your employer about childcare help they could offer.

There are some good reasons why more and more employers are looking at their employees' childcare needs and trying to find ways to help. Employers rely upon parents as part of their work force and they need you to be able to concentrate on your work without worrying about your children while you are there. Parents with safe, secure, high quality childcare arrangements that they can afford are: 

  • less likely to be worrying about their children while they work
  • more likely to come back to work after maternity leave 
  • more likely to stay in work as their children grow up   

What kind of childcare help could be offered?

  • Childcare vouchers
  • Childcare subsidies
  • Workplace provision

What could my employer do?

Any childcare help that your employer offers is likely to be part of a range of work-life balance policies designed to help you balance your work with the rest of your life. 

Your employer must provide you with: 

  • Maternity leave of at least 18 weeks 
  • Extended maternity leave of up to 29 weeks if you have worked with your employer for at least one year 
  • Unpaid parental leave of up to 13 weeks subject to one year's service 
  • The right to limit your working hours to less than 48 hours per week 
  • Four weeks paid annual leave 
  • The right to rest breaks    

Your employer could provide you with: 

  • Childcare help 
  • Flexible work options like term-time work, flexi-hours, part-time work or job share 
  • Leave options, like extended maternity leave or paternity leave for fathers around the time babies are born    

Ask your employer or trade union representative for more information on these work-life balance options.

Childcare vouchers

Childcare vouchers are a way of paying for childcare, usually via a paper voucher redeemable by the childcare provider. Childcare vouchers are usually administered by a voucher provider, for an administrative fee. 

  • The employer is exempt from employers NI contribution;
  • The employee is exempt from income tax and employees Class 1 NI contribution;
  • Vouchers can only be used to pay for registered or approved childcare;
  • The annual saving for an individual on basic tax, receiving a £55 a week childcare voucher will be around £962;
  • To gain the exemptions the employer must offer vouchers to all staff; and exemption will be limited to support of up to £55 a week or £243 a month.  

If you have been receiving childcare vouchers from your employer, and then go on to have another child, you are still entitled to continue to receive childcare vouchers while you are on maternity leave.

Childcare subsidies

This is an amount paid to a childcare provider to subsidise the cost of childcare for staff. An example would be a £5 a day subsidy for a holiday playscheme.

  • The employer is exempt from employers NI contribution;
  • The employee is exempt from income tax and Class 1A employees NI contribution;
  • Subsidy can only be used to pay for registered or approved childcare;
  • The annual saving for an individual on basic tax whose employer is paying a £55 subsidy is around £962;
  • To gain the exemption the employer must offer the subsidy to all staff;
  • Exemption will be limited to support of up to £55 a week or £243 a month. 

Workplace provision

Workplace, or in-house provision, is where the employer is wholly or partly responsible for  the management and financing of the provision or that the care is provided on the premises, which are made available solely by the employer. In practice this means either a workplace nursery or an in-house /on-site holiday playscheme. A contractor may run the scheme as long as it fits the above criteria.

  • The employer is exempt from employers NI contribution;
  • The employee is exempt from income tax and employees Class 1 NI contribution;
  • If the employer paid £600 towards a childcare place each month there would be a saving of around £200;
  • The amount that can be salary sacrificed is not limited.    

Who could get help?

You should ask your personnel department, line manager or employer if any childcare help is offered and how it is allocated. You could also ask your trade union representative for advice.

What if my employer is not able to help with childcare?

If your employer does not offer help now, they may be keen to look at what you need and listen to your views. So it is worth discussing options with them. Or why not ask them to contact the Southampton Early Years Development and Childcare team to find out what options they could consider? Call 023 8083 3014.

Finding out more

Ask your employer for information about their work-life balance policies and what childcare help they provide.

If you, or your employer, want to find out more you may wish to contact one of the following organisations: 

Family and Childcare Trust
2nd Floor, The Bridge
81 Southwark Bridge Road
London
SE1 0NQ
www.familyandchildcaretrust.org

Working Families
1-3 Berry Street
London
EC1V 0AA
Tel: 020 7253 7243

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