Childcare Office

Salary Exchange Schemes

The University offers two schemes to save tax and National Insurance on childcare costs:

  • A salary exchange scheme for nursery fees in the University's two workplace nurseries.
  • A salary exchange scheme for childcare vouchers to use with other Ofsted-registered or approved childcare providers.

Frequently asked questions

Why would I want to use these schemes?

There are two separate salary exchange schemes to help save money on childcare costs. Under both schemes, some or all childcare costs can be paid directly from your salary before tax and National Insurance Contributions (NI) are deducted, thus saving tax and NI payments on childcare. The schemes are open to all staff with a contract of employment with the University and on the University payroll. Certain restrictions apply to temporary staff. For verification, please contact the Childcare Services Administrator.

Which scheme do I use?

If you have children in one of the University workplace nurseries at Edwinstowe Close or at West Cambridge, you can take advantage of the Workplace Nurseries' Salary Exchange Scheme which enables you to make tax and NI savings on your full nursery costs (subject to certain conditions). For further information, see:

If you use Ofsted-registered or approved childcare providers outside the University nurseries (including the Cambridge Universities' Holiday Playscheme) you can use the University's Childcare Vouchers Salary Exchange Scheme and sign up for childcare vouchers from your salary that are free from tax and NI contributions. Due to HM Revenue & Customs regulations, a maximum of £243 per month (£55 per week) in childcare vouchers can be taken, depending on your tax status. For further information, go to:

Can I take advantage of both schemes?

Yes. You can have children in the University nurseries for whom you claim under the Workplace Nurseries' Salary Exchange Scheme. You may have other childcare costs for the same or another child, which are not paid to a University nursery, which you can claim under the Childcare Vouchers Salary Exchange Scheme. You cannot claim the same costs under both schemes. Your salary must be greater than the cost of any proposed childcare costs, and the amount you exchange from your salary for childcare must not reduce your salary to below the National Minimum Wage.

If my partner and I are both employed by the University, can we both use the Workplace Nurseries' and Childcare Vouchers Salary Exchange schemes?

Yes. Each parent is entitled to the concession. You are entitled to childcare vouchers for the care of any child for whom you are legally responsible for, even if you are not the biological or adoptive parent.

Do these schemes have any effect on my pension provision or state benefits?

The effect of a salary exchange on an employee's pension provision is dependent on the rules of your pension scheme. There is further information on the University's USS and CPS pension schemes in the Workplace Nurseries' Salary Exchange Scheme and the Childcare Vouchers Salary Exchange Scheme sections. If you use any other pension scheme you will need to check the implications of entering into a salary exchange scheme with your provider.

When you exchange pay in return for a benefit that is exempt from NI contributions, you will not pay NI on the exchanged portion. As your entitlement to some benefits is based on the amount of NI contributions that you pay and others are based on the amount of your earnings, entering into a salary exchange scheme may affect your current or future entitlement to a range of benefits including: Incapacity Benefit, State Pension, Statutory Maternity Pay, Statutory Sick Pay, Working Tax Credit and Child Tax Credit. For more information about how these benefits would be affected by a salary exchange arrangement, contact the relevant benefit provider. Please note also that salary exchange is not permitted if it would reduce your salary to below the National Minimum Wage.

Where can I get independent advice?

The University cannot offer independent advice and can only provide information about the University's salary exchange schemes. You may want to consider seeking independent advice. Try your Union, the Citizens' Advice Bureau, an independent financial adviser, your accountant, or your solicitor/legal adviser.