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How to Make Life Better for your Employees

Trading for Good Guide to Childcare Support


Good businesses are jammed packed with good people. But the market for good and talented people is becoming increasingly competitive.

What are the ways you attract and retain talent and could you become a fairer, kinder and more welcoming employer?

Companies who find the right way to make life better for staff find a range of business factors improve - from retention to productivity and ultimately profitability.

In practice, a set of one-off initiatives will help. But it should also involve a fundamental review of the work-life balance that can be struck in your business, everything from maternity rights to childcare to health care to pension policies - and beyond.

What does providing childcare support mean for you?

Recruiting and retaining good staff is crucial for any employer and with parents representing almost 40% of the UK workforce, quality and affordable childcare is important to employers and employees alike. Employers that offer childcare support to employees see many benefits such as:

  • NIC savings of up to 13.8% -- around £402 a year per employee.
  • Tax and NIC savings for employees – helping them with childcare costs.
  • Workplace nurseries: tax relief on day-to-day and capital costs
  • Demonstrates commitment to your staff and enhances your company image
  • Improves staff motivation and morale, therefore increasing productivity
  • Improves staff recruitment and retention

What help can you get?

You can get relief on your NIC contributions. Childcare vouchers (up to a limit of £55 a week) are exempt from NIC for employers, and from tax and NICs for employees. If you decide to enter into a Childcare Voucher scheme, you have to make it generally available to all employees. 

What do you need to do?

There are three types of childcare support that you can provide for your employees which qualify for Income Tax and National Insurance contributions (NIC) exemptions: childcare vouchers, directly contracted childcare and workplace nurseries. You could also consider offering flexible working practices. 

Childcare vouchers can be offered as a benefit-in-kind on top of existing pay, as part of a flexible benefits package, or most commonly as part of a salary sacrifice scheme. You can either outsource the administration of the scheme or run it yourself including producing your own vouchers. Your employees will then use the vouchers to ‘pay’ their childcare provider and the provider will redeem the value of the voucher directly from you.


Childcare support at work 

Kevin Barber
About the Author

Kevin Barber

Trading for Good East of England. Helping small businesses strengthen their reputation and grow by showcasing the good work that they do in their communities.

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