Question 1

What is the workplace nursery scheme?

Accepted Answer

This is a government scheme that enables parents to pay their nursery fees out of their pre tax salary as a result of a partnership between employers and nurseries. This results in savings on income tax and NI, giving the parent a saving of up to 41% on their nursery fees depending on their tax bracket (including our fees). For example savings for a parent, please do use our indicative savings calculator which can be found here.(https://www.workplacenursery.co.uk/parents)

Question 2

Are there restrictions on who can access the scheme?

Accepted Answer

To participate in the benefit the following criteria must apply:
 • You must be a PAYE taxpayer earning enough so that your salary would not drop below minimum wage as a result of sacrificing your nursery fees 
 • Your nursery fees must be at least £890 per month
 • Your child should be at the nursery for at least another 12 months
 • Your employer must be willing to offer the benefit to all employees
 • Your nursery must be OFSTED registered and not in a private dwelling

Question 3

This seems too good to be true, why have I never heard of it?

Accepted Answer

The workplace nursery scheme has been in existence since the late 1980s. It is poorly publicised and there are other tax-free childcare schemes that are more well-known such as the government-run tax-free childcare programme, or the 15/30 hours entitlement for 3–4-year-olds. In order to implement the benefit, a company need to formally setup and implement the benefit at their workplace and this can be another barrier to companies introducing the benefit to their employees.

Question 4

Is there a minimum nursery fee to use the workplace nursery benefit?

Accepted Answer

Due to calculations regarding the tax savings of the workplace nursery scheme, there is a minimum nursery fee of £10,680 per year or £890 per month.

Question 5

Can I use workplace nursery with 15/30 hours free childcare?

Accepted Answer

You can use the benefit in conjunction with the 15 – 30 free hours if your nursery offer this.

Question 6

My fees vary each month - can I still use the scheme?

Accepted Answer

Yes. At the beginning of the contract, the nursery confirms your fee schedule. If any amendments are made to these fees, provided that you give us notice before we invoice your employer we can adjust the invoice accordingly.

Question 7

How long is the contract term?

Accepted Answer

The contract is a minimum of 12 months in length. Once the 12 months has been fulfilled, your contract will continue on a monthly rolling basis. Your child must therefore have at least 12 months remaining at the nursery in order to access the benefit.

Question 8

What if I want to leave my employment or move nurseries during the contract?

Accepted Answer

As part of the workplace nursery benefit, your employer is entering into a 12 month agreement with your nursery to partly finance and manage the setting. Whether you remain at your employer, or whether your child remains at the nursery, your employer will need to continue to pay the monthly financial contribution to the nursery.

Question 9

What happens if I go on long term leave?

Accepted Answer

To continue using the benefit, an employee would need to be receiving sufficient income such that the salary does not fall below minimum wage as a result of the salary sacrifice. Once the parent’s pay falls below national minimum wage, the benefit would need to be paused until the employee returns from leave.

Question 10

How much is the financial contribution which my nursery receives from my employer?

Accepted Answer

This will depend on what your employer agrees with the nursery. Typically the nursery receives a minimum of £150 per month from your employer (£1800 extra per year). Our recommendation is that employers contribute at least the entirety of the employer NI saving (13.8%) which results from an employee’s salary sacrifice. Employer NI increases to 15% from April 6th 2025 and we will be recommending that employers increase their contribution accordingly.

Question 11

Can my employer only partner with one nursery?

Accepted Answer

No, they can partner with multiple nurseries. Large employers are expected to have nurseries on site, however if that is not feasible then it is possible to partners with local nurseries.

Question 12

Which nurseries does WPN currently partner with?

Accepted Answer

We work with many nurseries across the UK who are OFSTED registered and are not in private dwellings. If we don’t currently work with your nursery or they do not know about the benefit, we will contact the nursery management to explain the benefit and establish a relationship .

Question 13

How long does it take to set up the benefit?

Accepted Answer

This is entirely dependent on how long it takes for your employer and your nursery to sign the contracts. On our end, we’ll get to work within 48 hours of receiving your application.

Question 14

How do we make money?

Accepted Answer

We add 12% of the nursery fee as our administration fee which gets added to the salary sacrifice of the employee.  Because this comes from a parent's pre tax salary this becomes:  
 • 6.4% for additional rate taxpayers  
 • 7% for higher rate taxpayers  
 • 8.2% for basic rate taxpayers

Question 15

Where can I find more information from HMRC about the workplace nursery benefit?

Accepted Answer

As this is a government benefit, we recommend that you and your employer read the following HMRC guidance to understand more about the requirements of the workplace nursery benefit: 
 • Employer Supported Childcare (480: Appendix 11) (https://www.gov.uk/guidance/employer-supported-childcare-480-appendix-11#:~:text=In%20summary%2C%20no%20tax%20will,financing%20and%20managing%20the%20scheme.)
 • EIM22001 - Benefits:  Exemptions: Workplace nursery provision from 6 April 2005 Section 318 ITEPA 2003(https://www.gov.uk/hmrc-internal-manuals/employment-income-manual/eim22001)

FAQs

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info@workplacenursery.co.uk

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