childcare vouchers help needed salary explained

A question about : childcare vouchers help needed salary explained

I am just querying the childcare vouchers and if they are ofbenefit to me.

I currently earn Ј18,500 which Ј1,257 per month after taxand pay my childcare provider 300 a month in childcare fees.

Would I end up saving anything if I signed up for thevouchers? I believe you don’t pay tax and insurance on them up to Ј243 a monthso would that mean (sorry to sound dumb) that I would end up being taxed on asalary of Ј15,224 if I take away the Ј2916 in childcare vouchers, thus earning approxЈ1,120 a month? Meaning I only have to pay Ј60.00 on top but saving me Ј100 amonth?

Any help would be great.

Thanks

Best answers:

• If the vouchers are offered as part of a salary sacrifice scheme, then yes, you would effectively replacing the equivalent amount of your salary with the vouchers, the difference being the vouchers aren't taxable up to the amount you stated.
  You could then use these plus the remainder in cash (out of your post-tax income) to pay for your childcare. It would reduce your annual tax bill by almost Ј600.
  If you prefer to think of it in terms of take-home, your current take home after childcare costs is Ј18500 - tax - (Ј300 * 12). With a Ј10k tax allowance, and still ignoring NI, that leaves you Ј13200. With the vouchers, its Ј18500 - (12 * Ј243 vouchers) - tax on remainder - (Ј57 * 12). That works out at Ј13783.
  Exact figures will differ slightly when you take into account NI but that should give you an idea.
• We pay Ј110 per week,both me and OH claim these at Ј55 per week each,it comes off your gross wage and takes about Ј42 off your take home pay