Employer supported childcare vouchers – idiots' guide please?

I do the wages for a small construction company and have been approached to supply these. I have printed off the details from hmrc and spoke to them on the phone but it still seems a bit of a grey area. Am I right in thinking that I do not pay £55 of this guy’s wages and give him a childcare voucher for that amount instead. He then hands it in at the nursery and eventually I get them back and pay them direct?

Thank you in advance

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2 Responses to “Employer supported childcare vouchers – idiots' guide please?”

  1. K says:

    Childcare vouchers are usually administered using salary sacrifice. This means that the £55 per week (or £243 per month) is taken from gross salary before tax and NI are applied. That means that your employee will be making a saving because he won’t pay tax and NI on the amount he ‘sacrifices’. You can do this ‘in house’ but it is easier to use a childcare voucher provider like I do- http://www.saycarevouchers.co.uk. When you use a childcare voucher provider, your employee will receive either a paper voucher (posted to his home address) or an electronic voucher paid into his online account and then he has full control of his childcare voucher funds and the flexibility to pay his carer directly.

  2. Lexi says:

    I receive childcare vouchers via the online service. It comes out of my gross wages, thus granting me tax relief on my wages.

    From what I can gather the employer purchases the vouchers (either paper or online) for the employee.


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