What are childcare vouchers, and should my employer offer them?

Childcare vouchers are offered to employees either on top or instead of a portion of their salary (known as ‘salary sacrifice’).

These vouchers are free of tax and National Insurance Contributions up to a limit linked to the amount of income tax you pay (the rules are different if you began getting childcare vouchers before 6 April 2011) and can be used to pay for registered childcare. For basic rate taxpayers, the weekly tax-free limit is £55 (£243 per month) from April 2018. Childcare vouchers can affect your entitlement to tax credits.

Where your employer provides childcare vouchers under a salary sacrifice scheme, your employer is not legally obliged to carry on paying you these during your maternity leave, unless your employment contract gives you this right.

You can find more information on the website of the Working Families charity.

Note: This content is provided as general background information and should not be taken as legal advice or financial advice for your particular situation. Make sure to get individual advice on your case from your union, a source on our free help page or an independent financial advisor before taking any action.