What are the negatives to a UK ChildCare Voucher Scheme: Salary Sacrifice?
Salary sacrifice means employees give up some of their salary in exchange for the same value in childcare vouchers, yet due to the tax relief a basic rate taxpayer effectively gives up £100 of their taxed salary and gets £140 worth of vouchers back (much more for higher rate taxpayers). The savings for a lower rate tax payer can be up to £860. For a higher rate tax payer that rises to over £1000. Employees can sacrifice as much salary as they want in return for vouchers but only the first £55 a week will be exempt from tax and NI. NI is not paid on the vouchers, which means a gain of 12.8% on the vouchers too.
Related Questions
- My partner is offered a childcare voucher scheme/ salary sacrifice scheme at their place of work. Can we access the scheme to apply for help towards child care costs at Goldsmiths nursery?
- What administrative documentation do I have to put in place for a salary sacrifice childcare voucher scheme?
- How does the Childcare Vouchers salary Sacrifice Scheme operate?
