Childcare vouchers and other employer schemes
Your employer may be able to help you with approved childcare costs using childcare vouchers or other schemes, for example a staff nursery.
Ask your employer if they offer a childcare voucher scheme.
You can take up to £55 a week of your wages as childcare vouchers, which you don’t pay tax or National Insurance on.
How much you can take depends on the amount you earn and when you join the scheme.
Childcare vouchers may affect the amount of tax credits you get. Work out if you’d be better off taking childcare vouchers.
Changes to childcare vouchers
From 6 April 2018, childcare voucher schemes will close to new applicants. You may be able to get Tax-Free Childcare instead.
You can keep getting vouchers if you’ve joined a scheme and get your first voucher by 5 April 2018, as long as:
- you stay with the same employer and they continue to run the scheme
- you don’t take an unpaid career break of longer than a year
If you get Tax-Free Childcare
You can’t continue to claim childcare vouchers if you successfully apply for Tax-Free Childcare.
Which scheme you’re better off with depends on your situation. Use the childcare calculator to work out which type of support is best for you.
You must tell your employer within 90 days if you get Tax-Free Childcare. They’ll then stop giving you new vouchers.
You can continue to use any vouchers you already have, including to make a joint payment for childcare with Tax-Free Childcare. There’s no deadline for using your vouchers.
Once you’ve told your employer that you’re getting Tax-Free Childcare, you can’t rejoin their voucher scheme.
Tax and employer childcare schemes
You don’t have to pay tax and National Insurance on:
- childcare vouchers
- childcare your employer arranges with a provider (sometimes known as ‘directly contracted childcare’)
- workplace nurseries
You must pay tax and National Insurance on:
- cash your employer gives you to pay for childcare
- childcare provider’s fees your employer pays
- school fees your employer pays