The Salary Calculator has been updated with a new option for Childcare Vouchers. Some employers offer employees the opportunity to have some of their pay in the form of vouchers which can be exchanged with accredited childcare providers instead of cash. These vouchers can be taken tax-free, saving the employee money.

Childcare vouchers are subtracted from your salary before tax and National Insurance, like pension contributions. However, there is a limit to the amount that can be taken tax-free each year – for the current tax year, this amount is £2,915. You can receive childcare vouchers above this amount, but you will not get the tax benefits. If you signed up for the voucher scheme before 6th April 2011, this limit applies no matter how much you earn. However, if you joined the scheme after this date and pay tax above the 20% Basic Rate, the amount you can receive tax-free is reduced. For those paying 40% tax (typically earning £42,475 or more), the tax-free allowance for childcare vouchers is £1,484 – and for those paying 50% tax (earning over £150,000) it is just £1,166.

To see how childcare vouchers can affect your take-home pay, head over to The Salary Calculator and enter your salary, along with the value of vouchers you receive each month. If you joined the scheme before 6th April 2011, tick the box to this effect. Enter the rest of your details and click Go! to see the results.

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3 Comments to Childcare Vouchers added!

  1. […] my blog post about childcare vouchers earlier this week, I’ve heard from the people at Busy Bees Benefits, one of the companies […]

  2. Childcare voucher petition | The Salary Calculator on June 14th, 2012
  3. How would you calculate if Childcare Vouchers were not for a FULL Year?…so, if someone joined the scheme only 3 months before the end of financial year?

  4. Alex on April 4th, 2014
  5. Hi Alex,
    I’m afraid the calculator doesn’t support part-year calculations like this. However, you can see the monthly information in a two-step process.
    First of all, leave the childcare vouchers blank but enter the rest of the relevant information, like salary. When you view the results, this will show you what monthly take home will be for the months before childcare vouchers were claimed. Then, enter the monthly childcare amount and view the results a second time – this will show you what monthly take-home will be once the childcare vouchers are claimed. Unfortunately, the annual figures will be as if you received childcare vouchers for the whole year.
    I hope this helps!

  6. admin on April 5th, 2014

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