Workplace Nursery Partnership – How It Works

These partnerships are essentially just a link-up between an employer and a high-quality local nursery.

If, for instance, an employer has 10 employees who use the scheme then their nursery fees are paid through salary sacrifice directly to the nursery, this saving each employee many thousands of pounds as the payment comes out pre tax.

The link, however, is not burdensome to maintain, when operated through a provider it becomes simply a couple of meetings per year after the initial set-up. The link has to be in more than in just name only to satisfy HMRC, but workplace benefits providers such as Enjoy Benefits are able to ensure that the partnership meets all requirements while not being time consuming to maintain.

To aid in the ongoing management of the partnership, an online portal is available, this enabling each individual employee to manage their childcare bookings and also for the employer to see the overall status of the use of the scheme.

The partnerships are not new, however they are increasingly common following the mothballing of the Childcare Voucher scheme. In truth, for those with children of nursery age, the workplace nursery partnership was almost always the better option, with far greater savings available rather than the cap on Childcare Vouchers.

However, the fact that there was some admin involved, however slight, put many employers off.

Benefits for Employees

The key benefit of this form of partnership is for employees, who not only make a substantial saving on their nursery costs but also get an assured place with a quality local provider.

A parent spending £1,000 a month on childcare would save £2,942 if they are a standard rate tax payers and over £4,200 if they are taxed at the higher rate.

Someone with two children in nursery and spending £2,200 a month on nursery fees would save close to £9,500 a year if a higher rate tax payer (and well over £6,500 if on the basic rate).

Even childcare fees of just £700 per month could accrue savings of £2,000 per year at basic rate and £3,000 on the higher tax rate.

For many, the benefit will be purely financial, they get the nursery provision they always required but at reduced cost. However, for others, the impact of the scheme is more profound.

The high cost of childcare in the UK leaves many parents unable to work the hours they would want to, others left feeling completely blocked from a return to work because the childcare leaves little or no wage left.

The workplace nursery scheme can enable people to return to work or to work the hours they wish to or simply to enjoy their leisure time more or spend more on their child – their outgoings greatly reduced.

Benefits for employers

While there are financial benefits for employers, for many this might not be the key advantage.

The workplace nursery scheme is a benefit that shows that the employer cares for its staff and has things in place to make their life that bit easier. Every parent to young children requires childcare, getting this at a reduced rate thanks to the employer setting up a scheme is likely to create loyalty.

Employees are less likely to leave if enrolled on the scheme; leaving might mean changing nursery provider and exiting a company that has proven to care for its employees.

In the battle to entice good quality recruits, benefits can also be key – it might not be easy to up a salary offer by several thousand pounds and yet a workplace nursery scheme has this exact same financial benefit for any parent to young children.

Benefits for the nursery

Good quality nurseries find the scheme appealing because it helps guarantee their places are filled while also leading to extra funds being available.

The employer will make an offset contribution, this can then be used in any way that benefits the nursery and has the parents’ agreement. They might, for instance, buy new learning resources, or revamp the outside space or build a sensory playroom.

Setting Up A Workplace Nursery Scheme

A workplace nursery partnership is a genuine win-win-win that is beneficial financially to all parties while also making life easier for working parents.

At Enjoy Benefits, we are UK leading providers of workplace benefits; if you would like to discuss creating a workplace nursery scheme either in isolation or a part of a suite of benefits, please contact us by calling 0800 088 7315 or get in touch through our Contact Form.