Understanding the Workplace Nursery Scheme: A Guide for UK Parents

Discover the workplace nursery scheme—a tax-efficient childcare solution for UK parents. Learn how it works, its benefits, and how Kido supports working families.

Balancing career and family can be a challenge for working parents, especially when it comes to ensuring quality childcare. To support families in achieving this balance, many employers are introducing workplace nursery schemes—a thoughtful initiative that makes childcare more accessible and cost-effective.

These schemes provide a valuable opportunity for parents to enjoy quality early years education and care for their children while benefiting from significant savings. In this blog, we’ll explore what workplace nursery schemes are, how they work, and why they’re a fantastic benefit for families.

What is a Workplace Nursery Scheme?

A workplace nursery scheme is a government-backed childcare funding initiative that allows employers to partner with childcare providers to offer tax-free childcare options to their employees. Through these schemes, parents can save on childcare costs by paying nursery fees directly from their salary before tax and National Insurance (NI) contributions are deducted.

The savings can be significant, potentially reducing childcare costs by up to 47% for some families. These govt-funding schemes are particularly beneficial for working parents who want to maintain their career while ensuring their children receive quality early childhood education and care.

How Do Workplace Nursery Schemes Work?

Employers partner with childcare providers or organizations specializing in childcare funding schemes to set up the benefit. Here's how the process generally works:

1. Employer Partnership: Employers collaborate with childcare providers to establish a workplace nursery scheme.
2. Employee Enrollment: Employees enroll in the scheme, selecting a nursery that is part of the program.
3. Salary Sacrifice: The cost of the nursery is deducted directly from the employee's salary before tax and NI contributions.
4. Tax Savings: Parents benefit from significant savings on tax and NI, reducing the overall cost of childcare.

Some employers may enhance these schemes by contributing additional funds towards childcare costs, further alleviating financial pressure on employees.

Benefits of Workplace Nursery Schemes

1. Cost Savings: Parents save on preschool & daycare through salary sacrifice, reducing taxable income and cutting tax and NI costs.
2. Employer Contributions: Some employers help with childcare costs, easing household budgets.
3. Work-Life Balance: Affordable, reliable childcare lets parents focus on careers, boosting productivity and satisfaction.
4. Child Development: Partnered nurseries provide quality early education in a safe, nurturing environment.
5. Attract & Retain Talent: These schemes enhance employee wellbeing and strengthen benefits packages.

How to Access a Workplace Nursery Scheme

If you’re a parent interested in a workplace nursery scheme, here are some steps you can take:

1. Talk to Your Employer: Start by inquiring if your employer has partnered with any workplace nursery scheme providers. Not all companies have such schemes in place, so it’s essential to raise awareness about this benefit.
2. Explore Partner Nurseries: If your employer has an existing scheme, check if Kido is a partnered provider and select the nursery location that best suits your child’s needs.
3. Enroll Your Child: Once you’ve chosen a Kido nursery, enroll your child and coordinate with your employer to start the salary sacrifice arrangement.

Common Questions About Workplace Nursery Schemes

Are all nurseries included in workplace nursery schemes?

No, only nurseries partnered with specific providers or those affiliated with the employer’s scheme are eligible. Parents should confirm with their employer and the provider.

Can both parents use the scheme?

If both parents work for companies offering workplace nursery schemes, they can each benefit from salary sacrifice, potentially doubling the savings.

What happens if I leave my job?

If you leave your current job, your participation in the scheme typically ends. It’s important to check with your employer about any specific terms related to early exit.

How Workplace Nursery Schemes differ from 15-hours funding and 30-Hours Funding?

Workplace Nursery Schemes can be used for full-time or part-time care and combined with other funding schemes (except Tax-Free Childcare).

But, 15-hours funding and 30-Hours Funding are limited to specific hours per week, typically during school term time (38 weeks a year). Parents must pay for any additional hours.

How Kido Supports Working Parents

At Kido, we are dedicated to supporting working parents by providing high-quality childcare solutions through our workplace nursery program. With flexible options, tax-efficient savings, and exceptional early years education, we make it easier for parents to balance their careers and family life.

Eligible working parents can now enjoy benefits schemes such as 15 hours of free childcare for 2-year-olds and 30 hours for 3- and 4-year-olds, funded by the government.

Workplace nursery schemes are a win-win for both employers and employees, offering financial relief for parents and fostering a supportive work environment. At Kido, we go beyond just childcare—we provide a nurturing space where children grow, learn, and thrive. Explore how our program can benefit your family and experience the Kido difference. Reach out to us today and let us help you balance work and family life effortlessly.