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 amount you get depends on your income, but with highest payments at £243 a month, they’re well worth having. You might get the vouchers as a straight benefit, or you might need to sacrifice pay in return for vouchers. It sounds fiddly, but the advantage is not having to pay tax and national insurance on the income you ‘sacrificed’. (The government has announced plans to make childcare more affordable via a new voucher scheme which kicks in Autumn 2015 - so make sure you do your research nearer the time.)
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.
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