Workplace Nursery Salary Sacrifice enables working parents to save thousands of pounds while still enjoying outstanding nursery provision.
Typical savings are at least £3,000 a year while some parents in London, especially those with more than one child in nursery can save more than £10,000 per year.
A workplace nursery salary sacrifice scheme is also easy to set up for any size of business. It is a workplace benefit that can be set up a company such as Enjoy Benefits, who then take care of the administration.
For the employer, there are only occasional, short meetings, while for employees there is the huge benefit of childcare that becomes more affordable, coming out as a sacrifice before income is taxed.
The benefits, though, are not just for employees. Research shows that a huge proportion of mothers who work part time would like to work extra hours if only childcare was more affordable. Furthermore, offering a workplace nursery salary sacrifice also leads to increased staff retention and helps recruit quality newcomers.
The benefit has the same impact as offering an increased salary; it might not be practical to offer thousands of pounds more in salary, but helping someone save that same amount in childcare costs.
Workplace Nursery Salary Sacrifice – How It Works
The scheme works by an employer setting up a partnership with a local nursery. Employees who opt in then have guaranteed places and the costs come out in the form of a salary sacrifice, thus saving them thousands of pounds.
The partnership has to be set up correctly and not just a paper exercise, however at Enjoy Benefits we are experts in setting up the schemes correctly. In reality, there is little for the employer to do.
The scheme also benefits the nursery as they get additional funds, these contributed by the employer (but at no cost to them as they are offset). Parents with their children at the nursery then get a say in how these extra funds are spent – it might be on learning resources, revamping outside space or for educational trips out.
The nursery also gets all payments from parents using the scheme at the same time, with no need to chase payment.
We mentioned the savings available via a workplace nursery scheme but just how much can parents save via salary sacrifice?
If monthly nursery bill is £1,000, savings will be £2,942 per year.
Monthly nursery fees of £1,250 – saving is £3,678
Monthly fees of £2,000 (two children in nursery) – savings £5,885
For higher rate tax payers
If monthly nursery bill is £1,000, savings will be £4,274 per year.
Monthly nursery fees of £1,250 – saving is £5,343
Monthly fees of £2,000 (two children in nursery) – savings £8,549
Workplace Nursery Scheme v Childcare Vouchers
The question as to which benefit is best for parents is now irrelevant as the Childcare Voucher scheme has been mothballed and cannot be joined by new applicants.
The childcare voucher scheme was popular because it was so easy for any employer to implement, it also had the benefit of covering childcare up the age of 15, or 16 for children with disabilities.
The workplace nursery scheme is more specific in that, as the name implies, it relates to nursery provision. However, it is nursery care that tends to be the most expensive and compared to Childcare Vouchers, where the savings were limited, with the workplace nursery salary sacrifice there is no top limit to savings. A parent can save £10,000 per year and beyond, many are saving more than £5,000 per annum.
For anyone with a child in nursery, the workplace scheme is beneficial.
Why Consider Enjoy Benefits
At Enjoy Benefits, we have set up a huge number of workplace nursery schemes and have the testimonials to show how well they have been run.
We used a web based system that is easy for employer and employee to access, while an Android and iPhone app makes it easy for parents to manage their childcare arrangements.
We also answer all questions promptly, typically responding to any query inside an hour. Any employer using Enjoy Benefits will have a named account manager.
A further benefit of using Enjoy Benefits is that we can incorporate a nursery salary sacrifice scheme into a comprehensive offer of employee benefits.This could be gym membership as a salary sacrficie, car leasing, cycle to work, mobile phone purchase or dozens of other benefits. These can all be managed through a single huib, creating an easy to manage comprehensive suite of benefits that makes any employer stand out.
If you are interested in setting up a workplace nursery scheme or simply want more information, please call us on 0800 088 7315 or use our Contact Form.
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