Abacus Ark’s Guide to Saving £1,000’s on Childcare Costs
Abacus Ark Guide to Saving £1,000's on Childcare Costs
WARNING - This is not a Voucher Scheme
Based on our experience and research, if your employer alloys it and you require near full time hours, the Salary Sacrifice options will likely come out on top.
As a parent with a child in nursery, you will have multiple options for saving money.
- Childcare Vouchers (Discontinued)
- Tax Free Childcare (Up to £2,000 per year)
- Salary Sacrifice (Our Preferred Option)
Example: For a parent earning at the higher rate of tax (40%) and paying £1,500 is monthly childcare fees will save:
Tax Free Childcare – £2,000
Salary Sacrifice – £6,411.60
How it works
Enjoy Benefits uses a piece of legislation that allows spaces in a nursery set up by your employer to be exempt from Tax and National Insurance Contributions. This is called the ‘Workplace nursery exemption’.
The conditions for the Workplace Nursery Exemption to apply requires as contribution by your employer to the nursery and that these contributions are used for the wider benefit of the children or staff in the nursery.
By distributing the tax savings between the employee, employer and nursery, Enjoy Benefits has constructed a win win win scenario.
For those who like numbers
How your Employer Benefits
Your employer will save 13.8% of your salary as a result of not having to pay Employers National Insurance on the cost of the childcare.
Part of this saving will be put towards the required contribution to the nursery as part of the ‘Workplace Nursery Exemption’ criteria.
How your Child's Nursery Benefits
To be considered a Workplace Nursery, your Employer will need to contribute towards your child’s nursery. As part of the Enjoy Benefits Scheme, the nursery will receive an additional £100 per month, over and above the fees.
In exchange for this, the money must be used for items agreed between you and the nursery. They must then be evidenced by receipts.
How to Calculate your savings
Simply click on this link which will take you to the Enjoy Benefits webpage. Click on the Workplace Nursery Savings button and a calculator will pop up.