⚠️ We are currently updating our 2020/21 tax guidance across the website
Some employers offer employer-supported childcare (ESC) to help towards the costs of qualifying childcare. It is up to your employer whether they decide to offer ESC or not. There are three types of ESC:
- Workplace nurseries: This is where your employer has a nursery or crèche at your place of work. If certain conditions are met, this is a tax and National Insurance (NIC) free benefit.
- Directly-contracted childcare: This is where your employer arranges with a commercial childcare provider to provide childcare for you (again, a tax and NIC free benefit, up to certain limits).
- Childcare vouchers: This is the most common type of ESC. Your employer may give you vouchers that you can use to pay for childcare. Your employer may give you these in addition to your salary or you can choose to give up some of your salary to buy childcare vouchers (called salary sacrifice). You save tax and NIC on the value of the vouchers (up to certain limits).
The tax and NIC relief associated with childcare vouchers and directly-contracted childcare was closed to new joiners from 4 October 2018 due to the introduction of tax-free childcare. However, certain people who signed up before 4 October 2018 are able to continue receiving the relief.
We explain more about who can continue to benefit from the tax and NIC relief on the Who can claim vouchers? page.
Workplace nurseries are not affected by the introduction of tax-free childcare.
In this section, we explain more about childcare vouchers, the most common type of ESC.
- How does employer-supported childcare work?
- Who can claim vouchers?
- How much can I save?
- What is qualifying childcare?
- How do vouchers interact with other schemes?
You can also find out more read about these types of employer supported childcare on GOV.UK. (Even though this information is aimed at employers it can be useful for employees too.)