Helping Employees Save on Childcare: What Employers Need to Know
Helping Employees Save on Childcare: What Employers Need to Know
As many families receive confirmation of where their child will start school this September, now is the perfect time for working parents to start planning childcare arrangements. One valuable support option is the government’s Tax-Free Childcare scheme, which can save parents up to £2,000 a year per child—and it’s not just employees who benefit.
For employers, this is an opportunity to support staff wellbeing, reduce financial stress, and encourage parents to return to or stay in work.
Why This Matters for Employers
Childcare costs are one of the biggest financial pressures facing working families. By simply signposting schemes like Tax-Free Childcare, employers can:
- Support staff financial wellbeing
- Boost employee engagement and loyalty
- Make it easier for parents to return after parental leave
- Help reduce absenteeism and staff turnover
For every £8 a parent pays into a Tax-Free Childcare account, the government adds £2—up to £500 every three months per child (or £1,000 if the child is disabled). This support applies to:
- Childminders
- After-school clubs
- Holiday and wraparound care
The scheme covers children aged 11 or under, or up to 16 if the child is disabled.
What Employees Need to Know
To qualify, parents must:
- Earn at least the National Minimum Wage or Living Wage for 16 hours per week on average
- Each earn less than £100,000 per year
- Not be claiming Universal Credit or using childcare vouchers
Each child needs their own account, and parents must reconfirm their details every three months to continue receiving the top-up.
A Useful Tool for Returning Parents
Tax-Free Childcare is especially helpful for parents returning to work after parental leave or increasing their working hours. With many families finalising childcare plans for September, this is an ideal time for employers to raise awareness.
What Employers Can Do
- Share the GOV.UK link with staff: https://www.gov.uk/tax-free-childcare
- Include details about Tax-Free Childcare in your parental leave policies
- Encourage HR teams and line managers to highlight this to new or returning parents
By promoting Tax-Free Childcare, you’re not just offering helpful information—you’re showing real support for working families and helping to remove barriers that could otherwise result in losing valuable employees.
How We Can Help: Expert Payroll Services for Your Business
Understanding and communicating schemes like Tax-Free Childcare is just one aspect of effective payroll management. From handling complex payroll calculations to ensuring compliance with HMRC, we’re here to support your business.
- Accurate, stress-free payroll processing
- Expert advice on employee benefits and tax-efficient solutions
- Reliable support tailored to your business needs
Contact us today for a free payroll quotation and discover how we can make managing your workforce easier.
