About childcare vouchers
What is a childcare voucher scheme?
This is the scheme an employer operatse to enable its employees to take tax-free and NI-free childcare vouchers instead of salary. This helps working parents with their childcare costs. The employer is exempt from the payment of employer’s NI on the value of vouchers, the Government's tangible incentive for employers to offer them.
There are a number of important rules that must be observed by all parties – the employer, the employee and the employee’s childcarer - to ensure the scheme’s tax status is recognised by the Revenue.
How much are the savings?
Employees can take childcare vouchers tax-free and NI-free up to the value of £2,916 per annum. So
- a basic rate taxpayer (with earnings up to £43,875) will save up to £904 each year
- a higher rate taxpayer (with earnings between £43,875 and £100,000 or over £112,950) will save up to £1,195 each year
- a higher rate taxpayer (with earnings between £100,000 and £112,950) will save up to £1,779 each year
- an additional rate taxpayer (with earnings over £150,000) will save up to £1,487 each year
- Nor is employer’s NI payable on the value of the vouchers. So an employer can save NI of up to £373 per annum, per employee.
What does Abacus provide?
Abacus provides employers with
- Comprehensive information and documentation for employers to self-operate a childcare voucher scheme, and
- Updates: Abacus updates its scheme as and when new legislation comes into force or improvements have been developed. An email alert notifies employer clients of updates available to them on Abacus’s website
What does the Abacus solution cost?
Abacus’s unique fixed fee means employers benefit more year after year. It allows them to make greater savings by issuing their own virtual vouchers rather than by buying vouchers from a voucher provider. Click here to compare the cost of the Abacus scheme with the charges levied by voucher providers.
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