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 are increased exemptions on workplace childcare).
This support can be provided in three ways:
- childcare vouchers
- directly-contracted childcare
- workplace childcare provision
There are two ways to offer childcare support to your employees:
- a benefit offered in addition to their cash salary ('salary plus')
- reducing their cash salary and paying instead an amount towards their eligible childcare costs ('salary sacrifice')
All forms of employer-supported childcare have specific conditions that must be met by both you as an employer and your staff. To find out more go to the Family and Childcare Trust website.
Supporting your staff with their childcare needs can benefit you and your employees. This includes better recruitment and retention of staff, reduced absenteeism, a more motivated workforce, as well as financial savings for you and your employees.