What are childcare vouchers?   
What types of childcare voucher scheme are there?    
What is salary sacrifice?    
What is a benefit in kind scheme?    
How do my employees sacrifice salary?   
How do childcare vouchers save employees money?   
How much can employees save by taking childcare vouchers?    
In what circumstances can an employee leave the scheme?    
How much does it cost?   
How many employees are required to set up a scheme?
What are Star Selections?   

What are childcare vouchers? 

Childcare vouchers are a government-led initiative with the aim of encouraging employers to help employees with their childcare costs. By running a childcare voucher scheme, you save on Employer National Insurance Contributions and enable employees to save tax and National Insurance Contributions. Childcare voucher scheme provider Sodexho Pass helps employers to set up and run a scheme. Vouchers are ordered and used by employees to pay for childcare. Carers then redeem the vouchers through Sodexho Pass.

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What types of childcare voucher scheme are there? 

Childcare vouchers can be offered to employees in three ways:

1. As a straight benefit (benefit in kind) where the employer provides the employee's childcare vouchers on top of their normal salary 

2. As a solo salary sacrifice scheme where employees nominate to take part of their salary as childcare vouchers     

3. As part of a benefits scheme where employees either nominate to take childcare vouchers in place of an alternative benefit or fixed benefit allowance or as part of a salary sacrifice

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What is salary sacrifice? 

Salary Sacrifice occurs when an employee agrees to formally give up existing taxable salary, usually in return for a financial gain. In the case of childcare vouchers, this is a tax and NI exemption on a maximum of £55 worth of salary taken as vouchers per week.

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What is a benefit in kind scheme? 

A benefit in kind scheme involves the employer giving childcare vouchers to employees on top of salary. In this case (where the qualifying criteria are met), the vouchers are free from Employer NI contributions for up to £55 per week and employees save on tax and NI up to this amount. Any amount over this attracts tax and NICs.

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How do my employees sacrifice salary? 

Employees must agree to a formal revision of their contract of employment. It must be indicated that henceforth the employee is legally entitled to a lower cash salary plus the childcare vouchers. The employee must sign a document agreeing to the new contractual terms proposed by you. Our standard Salary Sacrifice Agreement fulfils this obligation.

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How do childcare vouchers save employees money? 

The salary taken as vouchers is exempt from tax and National Insurance so employees pay contributions calculated on a lower salary amount, i.e. up to £55 (taken as vouchers) is exempt from tax and NI. Because schemes are run through payroll employees see an immediate increase in their net pay every pay period. The amount an employee saves depends on the rate of tax and NI they pay.

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How much can employees save by taking childcare vouchers? 

Savings depend on the rate of tax and NI employees pay. The maximum amount an employee can save is £1,195 per year. For more details follow this link.

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In what circumstances can an employee leave the scheme? 

An employee can leave the scheme in the event of a 'Life Changing' event including, but not limited to, birth, death, marriage, divorce, etc. There may be other circumstances which you may wish to consider on an individual basis. It is your decision whether an employee can leave the scheme.

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How much does it cost? 

The management fee charged by Sodexho Pass for the administration and processing of vouchers is a percentage fee based on the face value of the vouchers ordered. This management fee reflects the type of vouchers ordered, the frequency of orders and the number of employees on the scheme. Even if you only have one person using childcare vouchers, you will still save money. The management fee is subject to business VAT, but the voucher face value is not.

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How many employees are required to set up a scheme? 

There is no minimum number of employees required to set up a childcare voucher scheme. One employee on the scheme will create savings for your organisation. 

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What are Star Selections?

Star Selections are the employee savings packages brought to you as an additional benefit of your Sodexho Pass childcare voucher scheme.  Your staff can benefit from discounts on a wide range of products at some of the UK's top retailers at absolutely no cost to your organisation.  Email customercare@sodexhopass.co.uk for more information.

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