Childcare voucher alternative, tax-free childcare alternative

There are many types of employee benefits

but why should Employers help their Employees with childcare costs?

Childcare support is a key employee benefit for the majority of working parents.

Businesses recognise the value in offering support for childcare costs but they aren’t always sure of the best way to do so.


It can be difficult to try to keep your employees satisfied within their job, whilst they are busy worrying about childcare and the related costs. Employers can help mitigate this problem by researching the options available to them, so that they can offer support to their employees whilst ensuring that staff members without children do not feel unfavoured.

In order to make a business stand out to its employees, the overall aim in terms of the benefits, related to childcare, should be to allow employees to put their all into both work and their family, without them needing to sacrifice one of the other. By doing so, ultimately, company morale will soar.

Whether or not a business has childcare benefits can have a huge influence on whether or not individuals apply for positions and choose to work for said company. Employers that offer childcare options benefit from the employees knowing that the business values them and holds their best interest at heart. These advantages have been shown to improve staff participation and lower staff turnover rates.

Employees are likely to work harder within an organisation where they are provided with the necessary support related to having children. By providing employees with childcare benefits and options, employers are showing that they care about the employees outside of the workplace as well as in it. They are demonstrating that they support the development of a family and care for the safety and financial wellbeing of the children. 


Some of the top reasons to help employees with childcare costs include:

  • They feel appreciated and valued at work. 
  • They feel that they are being encouraged to have a good work-life balance.
  • They are less inclined to leave their job to seek better benefits elsewhere.
  • They are likely to return to work following the birth of their child.


Childcare Benefits For Employees 

It is widely accepted that parents will always choose to work with an employer that offers childcare benefits over one that does not. There are several different types of childcare opportunities that employers could offer their employees in order to keep their employees happy at their job. Some of these include on-location childcare centres, paid leave, spending accounts, subsidies, and flexible work schedules. 


1. Paid leave

Maternity and paternity leave are becoming more and more available to parents and the most frequently recognised and used childcare benefit from a workplace. The amount of time that is offered for paid leave may vary from employer to employer.

Over recent years it has become increasingly recognised that men need time off with their children too and so more opportunities have been introduced to allow men to take paid paternal leave. Aviva has introduced a policy for new fathers, allowing them to take up to 6 months leave. Since introducing this scheme, 95% of Aviva dads took more than two weeks off which is the usual entitlement offered through statutory paid paternity leave.

It can be damaging to pressure an employee to return to work before they are ready as they are likely to come back resentful and not functioning at the best. By giving more leeway with the amount of time employees can take off without receiving negative repercussions, an employee is being given the ability to return to work when they feel they are ready to.


2. On-Location Childcare 

If it is within the budget, having on location childcare can be the best option to support employees with children. Not only are their children within a close proximity in case of emergency but there are also less likely to be issues with staff arriving late or having to leave early to drop off or pick up their children.

It is often significantly cheaper for parents to bring their child to a business-financed nursery rather than a privately owned nursery. These types of on-site nurseries are often seen at establishments such as universities whereby a nursery will exist on campus which is solely for the use of the children of university staff and students.

Another advantage of this type of childcare is that the employees are aware who their children are socialising with as they are likely to be the children of their colleagues. This can also strengthen in-work relationships as employees are able to strengthen their bonds and perhaps mix with other parents within the workplace that they wouldn’t otherwise have connected with.

On-site nurseries do however come with a big commitment. There is an initial large investment and ongoing costs. It is also important to be aware of the changing laws related to childcare and the staffing of the nursery.

Having said that, you are likely to see a huge improvement in the attitude and work ethic of employees using the nursery. This increase in positive attitude at work, combined with their lack of childcare related worries is likely to cover the costs of setting up and running the nursery itself. 


3. Adaptable Work Schedules 

Giving employees the flexibility to work from home so part of the week or leave early in order to catch school pick up times in another benefit that employees value highly. For those staff who have been with a company for a long time and built up their reputation and trust within the organisation, they may be no problem with them working from home instead of from the office. This sort of arrangement can work incredibly well for some, making them even more productive but it’s important to keep in mind that it can go the other way too.


Previous schemes

Two schemes which have been very popular are: childcare vouchers and directly contracted childcare. Both of these schemes have now closed to new members, making it even harder for new parents to find affordable solutions to childcare whilst they are at work.

1. Directly contracted childcare

If an onsite nursery is not do-able for an organisation, some chose to run a directly contracted childcare scheme. This is where the employer will arrange childcare for employees and offer childcare with a specific provider chosen by them.

2. Childcare vouchers

Something frequently offered by an employer is childcare vouchers. These are schemes that an employer signs up to which involve an employee having the option of receiving childcare vouchers in addition to their current salary or alternatively, using a ‘salary sacrifice’. A salary sacrifice involves exactly that, giving up some of their salary in order to pay for the childcare vouchers. The benefit of this method is that an employee can save on tax and national insurance up to a specified limit.

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