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
The Government's National Childcare Strategies for Scotland and England encourage employers to get involved in childcare and help their employees out.
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 to13 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 jobshare
- 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.
What kind of childcare help could be offered?
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; andexemption will be limited to support of up to £55 a week or £243 a month.
If you have been receiving childcare vouchers fom 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. For more information, go to the Daycare Trust website.
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; and
- 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;
- and 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 Partnership to find out what options they could consider? Call 023 8083 2045
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:
Daycare Trust
Shoreditch Town Hall
380 Old Street
London EC1V 9LT
Tel: 020 7739 2866
Working Families
1-3 Berry Street
London
EC1V 0AA
Tel: 020 7253 7243
