Childcare vouchers can help you to save money with your childcare fees. They are a way of paying for childcare – through your employer. The first £50 a week supplied via childcare vouchers is exempt from tax and National Insurance Contributions (NIC) for employees.
To be exempt from tax and National Insurance Contributions (NIC) You can sacrifice up to £50 per week (£243 a month) of your salary. You will then receive that amount in childcare vouchers. This means you will only pay tax and NIC on the reduced level of your salary, which effectively saves money on childcare costs. An average tax payer could save over £1,000 a year. Each employed parent can claim the exemptions, so a two-parent family could save up to £2,000.