The direct cost to the employer is simply the service charge at the rate you are set. VAT is reclaimable at this time but will cease to be recoverable on 1st January 2012, due to an HMRC clarification recently. VAT does not need to be charged on the sacrifice amount as childcare is exempt.

The charges are set according to the service chosen.

However, the company makes a substantial saving per employee as the voucher forms part of the employees remuneration. And it is NOT subject to employers NI, currently 13.8%.

If you think of a voucher at £100, you would save £13.80 in NI but will lose VAT (from 1/1/2012) on the management fee of around £0.80, net saving of £13.00. So the service actually costs the company NOTHING, in fact the company makes a saving offering the scheme.

See the chart to see your NI savings