What are the benefits of employer childcare vouchers schemes
As an employer, you are constantly seeking to increase staff retention and gain maximise goodwill? And it isn’t always just about higher wages pay rises. Many workers are parents, and many of them will face significant childcare costs. It is now possible to help employees by joining the UK Childcare Voucher Scheme. Irrespective of the size of your company, from a single-employee business to a multi-national corporation, the benefits to both employer and employee remain the same. Plus, it is also tax-efficient.
What are employer childcare voucher schemes?
Employer Childcare Voucher Schemes offer a simple and flexible way to help staff save on registered childcare costs, at minimal cost to the employer. The business can even save money. Childcare vouchers are a valid way of paying for all forms of eligible registered childcare including workplace nurseries.
The majority of employer childcare voucher schemes operate as a salary sacrifice scheme. This means that working parents exchange part of their salary for childcare vouchers. Some employers decide to offer vouchers on top of existing salaries, but this is rare and to a large extent unnecessary as significant employee goodwill can be gained by simply setting up a basic scheme to allow employees to benefit from tax savings.
Participating in a childcare voucher scheme means that an employee agrees to give up some of their salary and in return receives childcare vouchers. These vouchers have special tax and insurance implications which mean that for every for every £1,000 an employee sacrifices, or £700 net of tax and insurance, they receive £1,000 of childcare vouchers, effectively gaining £300.
What are the benefits of employer childcare voucher schemes?
Many employers operate employer childcare voucher schemes as it makes sound financial sense as businesses can save up to 12.8% on the value of the vouchers through exemptions from National Insurance contributions. This is based on vouchers up to the value of £55 per week. Employers can therefore save up to £402 per year in national insurance contributions for every employee that joins the employer childcare voucher scheme.
Joining a childcare voucher scheme also makes sense on many other counts too. By offering such a valuable and worthwhile benefit to employees, the employer is promoting goodwill and a better work/life balance. This will certainly help your business to attract new employees and aid staff retention. Joining a childcare voucher scheme can also help to reduce absenteeism, improve staff motivation and improve productivity. Every business knows that a happy and contented workforce is usually more productive.
If you would like to find out how simple it would be to set up your own Childcare Voucher Scheme and improve the work/life balance of your employees, please download our free childcare voucher scheme guide.
For more information call us now on 0845 0945 804 or visit our Employer Childcare Vouchers page.