Childcare costs

Why do employers help with childcare?

If you head to work knowing your child is safe, cared for and in affordable childcare, you’re more likely to feel happier, focused and productive. You’re also less likely to take time off, and more likely to return after maternity or parental leave. That’s why many organisations now recognise that supporting staff with childcare is a win–win — for employees and for business.

How to get started

Your first step is to ask your HR team or manager if your workplace offers childcare support. If not, it’s still worth raising the idea — many employers are open to introducing new family-friendly benefits.

What are the different ways employers can help with childcare?

Direct payment

Some employers pay your registered childcare provider directly, reducing the admin for you.

Workplace nurseries

A handful of employers provide on-site or nearby nurseries. If you’re lucky enough to have access, this can be free or subsidised and counts as a tax-free benefit — a huge saving.

Legacy childcare vouchers

The Government closed the Childcare Vouchers scheme to new joiners on 4 October 2018. If you were already signed up before then, you can keep using it as long as you remain with the same employer, your child is still eligible, and you’ve received vouchers within the last 12 months. But for anyone new, this option is no longer available.

Employer help vs government support — what’s best?

It depends on your circumstances. For most families, government schemes like Tax-Free Childcare or 30 hours free childcare tend to give bigger savings than employer-led schemes. One important thing to note: you can’t use employer-paid childcare and claim tax credits for the same costs — you’ll need to weigh up which gives you the most support.

👉 Top tip: If your employer offers a workplace nursery, this is often the most tax-efficient option.

Tax-Free Childcare scheme

With Tax-Free Childcare, you can get up to £500 every 3 months (£2,000 a year) for each child to help with childcare costs.

Here’s how it works:

You pay into an online childcare account for your child.

For every £8 you pay in, the government adds £2.

You can use the money for approved childcare, including:

Childminders, nurseries and nannies

After-school clubs and play schemes

Home care agencies

You can use Tax-Free Childcare alongside 30 hours free childcare if you’re eligible for both.

Find out more

For detailed information, visit MoneyHelper or the Government website

HM Revenue & Customs offers a great childcare calculator to help you work out the best option for your family.

Or call the Tax Credits Helpline on 0345 300 3900 for personalised advice.