You are now leaving the Turn2us site. Turn2us is not responsible for content on third party sites.



Employer Supported Childcare (Childcare Vouchers) - How much Employer Supported Childcare will I get?

Find out more about Employer Supported Childcare (Childcare Vouchers).

How much Employer Supported Childcare will I get?

The value of the vouchers reduces your gross salary (before tax and national insurance is deducted) so you make tax and national insurance savings if you get vouchers as part of your salary.

There is no limit to the value of childcare vouchers an employer can supply. However, only a maximum of £55 a week counts towards the tax/national insurance exemption.

How much you can receive as childcare vouchers without having to pay tax or national insurance depends on what rate of tax you pay and when you joined the scheme. If you joined the scheme on or after 6 April 2011, the limits are:

  • Basic rate tax payer £55 per week (giving tax and national insurance savings of up to £933 a year).

  • Higher rate tax payer £28 per week (giving tax and national insurance savings of up to £625 a year).

  • Additional rate tax payer £25 per week (giving tax and national insurance savings of up to £621 a year).

If you joined the scheme before 6 April 2011, the weekly limit is £55, whichever rate of tax you pay.

Benefit Cap

Employer Supported Childcare is not included in the Benefit Cap which limits the total amount in some benefits that working-age people can receive. See our Benefit Cap information page for more details.

How will I be paid Employer Supported Childcare?

Childcare vouchers are normally provided through salary sacrifice. This means an employee gives up part of their salary in return for a non-cash benefit, for example you get vouchers instead of money as part of your salary.  This can affect entitlement to pensions and statutory pay so you should look into this before agreeing to change your contract to salary sacrifice.

Employer Supported Childcare and other benefits

You cannot claim for the same childcare costs through the Childcare element of Working Tax Credit and childcare vouchers. You must deduct the value of any childcare vouchers from your childcare costs when working out your childcare costs for tax credit purposes.

For example: If Katy's childcare costs are £150 a week for her son and she receives £55 a week in childcare vouchers, she will need to declare her childcare costs for Working Tax Credit as £95.  Katy would need to work out whether she is better off claiming vouchers or claiming all her support through tax credits.

If your employer offers you childcare vouchers and you want to know if you would be better off having the vouchers or claiming for help with childcare costs through Working Tax Credit, you can use the Gov.uk website childcare cost calculator (link opens in a new window)  on the HM Revenue and Customs website.

If you get vouchers instead of money as part of your salary this could affect your entitlement to certain benefits. For example, your Tax Credits may be affected if the money you are paid falls below a certain level. Your rights to Basic State Pension, New State Pension, Maternity Allowance, Statutory Maternity Pay, Statutory Paternity Pay and Statutory Adoption Pay could also be affected as these are based on your National Insurance contributions.

 

Reviewed: August 2017

Anything wrong with this page?

Tell us the problem

Please enter your name
Please enter a valid email address
Please enter what you were doing
Please enter what you'd like to report
Please enter the security code shown
Close

Thank you

If you would like to tell us more please visit our contact page

Close

Search for a grant

Look for funds that might be able to give you a grant and/or other types of help.

Use the Grants Search tool