Childcare vouchers are a government initiative aimed at helping working parents.
Parents can receive up to £243 per month of childcare vouchers from their employer, free of tax and national insurance.
Most childcare vouchers are provided through salary sacrifice, which means the employee’s gross salary is reduced by the amount of the childcare voucher, before tax and NIC is deducted.
This is an earnings based system as follows:
Basic Rate Taxpayers can receive a maximum of £243 per month in childcare vouchers
Higher Rate Taxpayers can receive a maximum of £124 per month in childcare vouchers
Additional Rate Taxpayers can receive a maximum of £110 per month in childcare vouchers
Employers can contact Childcare Voucher agencies such as Kiddivouchers or Enred to setup a scheme for their employees.