The essential guide to the Workplace Nursery Scheme

Have you ever wondered what the workplace nursery scheme is and if you can benefit from it at your organisation? Whether you are an HR leader who wants to create a more competitive family friendly benefit package, or a parent wanting to know if this benefit could be offered at your workplace, then this ultimate guide to the workplace nursery scheme benefit is for you. 

Read on to find out how the workplace nursery scheme works, how much parents can save, how workplace nursery compares to tax-free childcare and how to offer this amazing family friendly benefit to staff. 

What is the workplace nursery scheme? 

Workplace nursery enables employees to pay for nursery bills via salary sacrifice, saving them money. Employers can form partnerships with private nurseries (rather than build an actual nursery on their premises - not possible for most employers) as long as certain conditions are met. These conditions are set out by HMRC. Gogeta helps facilitate the partnership between employers and nurseries, making it as easy as possible for employers to offer this fantastic benefit to staff. As a result, employees can get vital help with the cost of childcare and nurseries also benefit too. 

Why is the workplace nursery scheme so popular? 

Workplace nursery is an incredibly popular benefit because parents across the country are struggling with childcare bills. The UK has some of the highest childcare costs in the world, and that has disastrous social and economic consequences. Childcare costs mean many mothers aren’t returning to work until much later, contributing to the gender pay gap.  At the same time as saving parents money, workplace nursery also benefits nurseries, who are in dire need of additional funding. As part of workplace nursery scheme compliance, employers make additional funding contributions to the nurseries they  partner with. This is cost neutral, as it is covered by the national insurance savings they make on the employee salary sacrifice amount. This means every employer is able to offer this scheme to staff. 

How much can parents save with the workplace nursery scheme?

Parents can save between 19% and 40% on their nursery bill by paying via salary sacrifice. Exact savings will depend on their tax code (check out our savings calculator). For a parent earning £65,000 per year with a nursery bill of £1500 per month, this means they could save £5740 per year by using the workplace nursery scheme. 

Workplace nursery versus tax-free childcare

Tax-free childcare is another Government scheme that lets people save money on childcare costs. The difference between workplace nursery and tax-free childcare is that the savings with workplace nursery are uncapped (versus tax-free childcare where savings are capped at £2000 per year). For example: a parent who earns £60,000 a year pays £1500 in nursery bills every month, will save £2000 over the year with tax-free childcare and £4953 in a year with workplace nursery. 

How is Gogeta Nursery different from other workplace nursery schemes?  

Workplace nursery is a simple benefit to roll out to staff but there are compliance requirements that must be met and so choosing the right provider is really important. 

Gogeta Nursery has some of the highest compliance standards out of any scheme operator but at the same time we make it as easy as possible for employers to offer this benefit to staff. Our rigorous and robust approach to compliance gives employers peace of mind and our streamlined processes mean there is no extra administrative burden placed on employer’s HR teams. 

How do nurseries benefit?

As part of the workplace nursery compliance requirements, employers offering this benefit to staff must make a financial contribution to the nursery their employee uses. With Gogeta Nursery this contribution is 12.5% of the parent’s nursery fees. So on a nursery bill of £1500 per month, when a parent uses Gogeta Nursery their nursery will receive an additional £2256 funding from their employer. This doesn’t cost the employee anything and it’s also cost neutral to the employer, because of the NIC savings they make. 

I’m a parent, how do I use the workplace nursery scheme? 

For a parent to use the workplace nursery scheme, their employer needs to sign up. It’s simple, quick and doesn’t cost them a penny. Visit our employee page to download a guide to share with your employer. 

I’m an employer, how do I sign up?

If you’re an employer, you can sign up to Gogeta Nursery here or get in touch and we’d be delighted to answer any questions you may have.