Going back to work brings lots of questions including how much you'll have to pay to have your little one looked after.
We all know childcare costs, but luckily more and more employers want to help. Here’s a quick guide to the best schemes...
At a glance
- Find out what your employer provides it could save you money
- Some workplaces have their own nurseries
- Find out whether claiming tax credits instead could be more beneficial
Why do employers offer to help with childcare?
If you go to work feeling confident your children are spending the day in safe, secure childcare that you can afford, chances are you’ll be happier and more productive at work. You’re also far less likely to take time off and more likely to come back after maternity leave. That’s why many organisations have now clocked onto the fact helping their employees with childcare pays off in the long term. Everyone’s a winner!
How to get started
Start off by speaking to your boss or human resources department to find out if your employer offers any help. If not, you might be able to talk them into it!
What are the different ways employers can help with childcare?
There are three main ways organisations can help:
These are provided by your employer, and the good thing is you choose the childcare provider. The Government has now closed the Childcare Vouchers scheme to new entrants on 4th October 2018. This means that if you’re a parent looking to join Childcare Vouchers for the first time, or an employer looking to start a scheme in your business for the first time, that option is no longer available to you. Parents already on the scheme can continue to benefit from the savings as long as their child remains eligible, they stay with the same employer, and they have had a wage adjustment and received vouchers within any 12 month period.
Just like the childcare voucher system, but your employer pays the registered or approved childcare provider direct.
Some employers set up their own nursery - either on site or at another location. Whether it’s free or subsidised, and no matter how much it’s worth to you, it counts as a tax-free perk of your job. Whoop!
Employer help or tax credits – what’s better for you?
Despite all this, tax credits are often the best way of reducing the costs of childcare, but it depends entirely on your circumstances. Why? Because you can’t claim tax credits to offset any childcare your employer ‘pays for’. So, it might not be worth it. If you’re eligible for both, you’ll just need to work out what’s best for you.
Top tip: Claiming tax credits is often better than using childcare vouchers, and best of all is a tax-free place in a workplace nursery.
Tax-Free Childcare Scheme
You can get up to £500 every 3 months (£2,000 a year) for each of your children to help with the costs of childcare.
If you get Tax-Free Childcare, the government will pay £2 for every £8 you pay your childcare provider. This is paid via an online childcare account that you set up for your child.
You can get Tax-Free Childcare at the same time as 30 hours free childcare if you’re eligible for both.
You can use it to pay for approved childcare, for example:
childminders, nurseries and nannies
after school clubs and play schemes
home care agencies
Your childcare provider must be signed up to the scheme before you can pay them and benefit from Tax-Free Childcare.