To participate in the benefit the following criteria must apply: You must be a PAYE taxpayer earning enough so that your salary would not drop below minimum wage as a result of sacrificing your nursery fees Your nursery fees must be at least £975 per month Your child should be at the nursery for at least another 12 months Your employer must be willing to offer the benefit to all employees Your nursery must be OFSTED registered and not in a private dwelling

To continue using the benefit, an employee would need to be receiving sufficient income such that the salary does not fall below minimum wage as a result of the salary sacrifice. Once the parent’s pay falls below national minimum wage, the benefit would need to be paused until the employee returns from leave.

No, they can partner with multiple nurseries. Large employers are expected to have nurseries on site, however if that is not feasible then it is possible to partners with local nurseries.

According to HMRC, a salary sacrifice arrangement is an agreement to reduce an employee’s entitlement to cash pay, usually in return for a non-cash benefit. Simply put, an employer will pay for the employee’s nursery fees out of their gross salary meaning that the employee saves on income tax and NI contributions and the employer also saves on employer NI contributions.

You can use the benefit in conjunction with the 15 – 30 free hours if your nursery offer this.

We work with many nurseries across the UK who are OFSTED registered and are not in private dwellings. If we don’t currently work with your nursery or they do not know about the benefit, we will contact the nursery management to explain the benefit and establish a relationship .

Due to calculations regarding the tax savings of the workplace nursery scheme, there is a minimum nursery fee of £11,700 per year or £975 per month.

The workplace nursery scheme has been in existence since the late 1980s. It is poorly publicised and there are other tax-free childcare schemes that are more well-known such as the government-run tax-free childcare programme, or the 15/30 hours entitlement for 3–4-year-olds. In order to implement the benefit, a company need to formally setup and implement the benefit at their workplace and this can be another barrier to companies introducing the benefit to their employees.

This is a government scheme that enables parents to pay their nursery fees out of their pre tax salary as a result of a partnership between employers and nurseries. This results in savings on income tax and NI, giving the parent a saving of up to 41% on their nursery fees depending on their tax bracket (including our fees). For example savings for a parent, please do use our indicative savings calculator which can be found here.

This is entirely dependent on how long it takes for your employer and your nursery to sign the contracts. On our end, we’ll get to work within 48 hours of receiving your application.

The contract is a minimum of 12 months in length. Once the 12 months has been fulfilled, your contract will continue on a monthly rolling basis. Your child must therefore have at least 12 months remaining at the nursery in order to access the benefit.

We add 12% of the nursery fee as our administration fee which gets added to the salary sacrifice of the employee. Because this comes from a parent's pre tax salary this becomes: 6.4% for additional rate taxpayers 7% for higher rate taxpayers 8.2% for basic rate taxpayers

As this is a government benefit, we recommend that you and your employer read the following HMRC guidance to understand more about the requirements of the workplace nursery benefit: Employer Supported Childcare (480: Appendix 11) EIM22001 - Benefits: Exemptions: Workplace nursery provision from 6 April 2005 Section 318 ITEPA 2003

This will depend on what your employer agrees with the nursery. Typically the nursery receives a minimum of £150 per month from your employer (£1800 extra per year). Our recommendation is that employers contribute at least the entirety of the employer NI saving (13.8%) which results from an employee’s salary sacrifice. Employer NI increases to 15% from April 6th 2025 and we will be recommending that employers increase their contribution accordingly.

As part of the workplace nursery benefit, your employer is entering into a 12 month agreement with your nursery to partly finance and manage the setting. Whether you remain at your employer, or whether your child remains at the nursery, your employer will need to continue to pay the monthly financial contribution to the nursery.

Yes. At the beginning of the contract, the nursery confirms your fee schedule. If any amendments are made to these fees, provided that you give us notice before we invoice your employer we can adjust the invoice accordingly.

This benefit cannot be used in conjunction with tax free childcare for nursery fees. It’s worth noting that with tax free childcare, the maximum saving is £2000 a year, whereas with the workplace nursery benefit, savings can be up to 41% and are uncapped. Where a parent is forecast to save £2,000 or less by doing the workplace nursery benefit, we would suggest that they consider using tax free childcare instead. Parents can use the indicative savings calculator to see their potential savings. It is possible to use workplace nursery benefit for nursery fees and tax free childcare for approved non nursery related childcare costs. For further details on tax free childcare, please visit www.gov.uk/tax-free-childcare