Frequently Asked Questions
What is salary sacrifice?
Salary sacrifice means that you reduce (or sacrifice) part of your normal salary in exchange for the same value in the form of Apple Childcare Vouchers. In order to comply with HMRC regulations, when you enter the scheme, or each time you amend your voucher value you will be required to enter a salary sacrifice agreement which acts as an amendment to your contract of employment. This agreement is made automatically through the online registration/amendment process.
An HMRC guide to salary sacrifice is available from your tax office or online to download at: www.hmrc.gov.uk/specialist/salary_sacrifice.pdf
How does salary sacrifice save me money?
Childcare vouchers are exempt from tax and national insurance so by entering into the scheme you can save up to 42% of the voucher value.
Is there a minimum and maximum amount that I can sacrifice?
The maximum is £55 per week or £243 per month for a standard-rate tax payer, £28 per week or £124 per month for a higher-rate tax payer and £22 per week or £97 per month for an additional-rate tax payer. The minimum voucher value is £5 per week or per month.
Will the voucher value be classed as a benefit in kind?
No, unless your employer pays the voucher value in addition to your salary and you receive the maximum voucher value. The voucher value in excess of the maximum per week will be classed as a benefit in kind.
Can both parents join the scheme?
Yes, both parents are entitled to receive up to the maximum voucher value per month in childcare vouchers, which means savings, can be as high as £1,866 per annum.
How are childcarers paid?
Childcarers are paid through a secure BACs transfer directly into their bank account from Apple Childcare Vouchers. Whether the employee has requested automatic payments, internet payments or paper vouchers the actual payment method is the same for each account option.
Can I use my vouchers for more than one childcarer?
Yes, the childcare vouchers can be used for any registered childcare provider. All you need to do is ensure that the childcare provider registers with Apple Childcare Vouchers.
Will salary sacrifice affect pay rises, overtime and bonuses?
When entering into a salary sacrifice scheme you are agreeing to reduce your salary and therefore any benefits that are linked to salary may be affected. However an employer usually makes considerations for this and ensures that all salary related benefits are based on your notional salary (your reduced salary plus your voucher value). If your employer has done this, then pay rises, overtime and bonuses will not be affected.
Will salary sacrifice affect my maternity pay and can I continue with the scheme while I am on maternity leave?
Statutory Maternity Pay (SMP) is calculated on your average earnings over a period of time before your maternity leave starts, therefore if you use vouchers during this period your entitlement to SMP will be reduced. If you receive enhanced maternity pay from your employer then the effects on using Apple Childcare Vouchers will depend on how your employer calculates maternity pay. In both cases your employer will be able to advise.
If you are receiving enhanced maternity pay you can continue in the scheme as long as you are not reducing your salary below the national minimum wage. If you are only in receipt of SMP you cannot continue the scheme through salary sacrifice as you cannot reduce a statutory payment, however your employer may provide the vouchers in addition to SMP. For more information please contact your employer.
Will salary sacrifice affect any mortgage offer?
Employers will generally provide you with a reference based on your combined reduced salary and salary sacrifice voucher value (notional salary).
Will salary sacrifice affect my state pension?
Your state pension should not be affected as long as you pay the minimum requirement for national insurance contributions. Your local tax office will be able will be able to provide you with more information.
Will salary sacrifice affect my company pension scheme?
Your employer may have made arrangements to ensure pensionable salary is based on your notional salary and not your reduced salary. If your employer has made this arrangement then you pension will not be affected, however if they have not then your pension contribution may decrease and your eventual pension entitlement may be affected. Your Pension Administrator or your employer will be able to provide you with more information.
Will salary sacrifice affect my tax credits?
Working Tax Credits are calculated on your total taxable income; therefore as you are reducing your salary in exchange for childcare vouchers your working tax credits entitlement could be increased.
However, as you are receiving childcare vouchers from your employer you are paying less for your childcare provision and this may have an impact and lower the amount you can claim in the childcare element of WTC.
If you are receiving the childcare element of WTC, you must inform the HMRC that you are now receiving childcare vouchers.
Each individual’s circumstances are different. In order to help you decide if you will be better off using childcare vouchers please visit the HMRC calculator: www.hmrc.gov.uk/calcs/ccin.htm