Workplace Nursery Benefit (TEDS)

These pages reproduce internal policy documents, which may change from time to time and which apply to UK employees only.

Where there is a difference between these pages and the policy documents on Confluence, the policy documents shall prevail.

TEDS Premier, Workplace Nursery Benefit

We recognise the increasing costs of childcare, and with many of you being parents or legal guardians, we want to support you and enable you to return to work after having children.

TED’s Premier is an alternative to the government Tax Free Childcare program, through which parents can save up to 40% on nursery fees. This benefit allows employees to avail of a tax benefit usually only extended to those that work in companies who have onsite nurseries.

It’s a HMRC friendly salary sacrifice scheme where you can obtain personal tax relief and National Insurance tax relief on 100% of nursery fees.

How does this work?

If your child has a place at a workplace nursery, then you will not have to pay any Income Tax or National Insurance Contributions (NICs) on this benefit. This means that your full childcare bill is exempt from Tax and National Insurance Contributions and hence your savings might be up to 40%. It is provided through a salary sacrifice scheme, whereby you exchange part of your salary for the childcare cost amount. This is then paid to the workplace nursery and you save the amount of tax and National Insurance.

iwoca saves on employers’ National Insurance Contributions and those savings are instead paid to the nursery as a fee so that it can qualify as an iwoca workplace nursery.

An example of the possible savings for a 40% tax payer is:

Monthly nursery cost = £1500

Per month through TEDS = £829

Total saving = £671

To qualify for the TEDS Premier salary sacrifice scheme, you must meet the eligibility criteria:

You can qualify as a child’s mother or father, either one or both may claim, including Legal Guardian.

Be in employment.

You must have ‘parental responsibility’ under law for your child.

Have an eligible child.

The nursery must be registered. TEDS Premier is welcomed by a large number of nursery providers.

If you are a lower paid worker, you must first ensure that you will benefit from TEDS Premier – find out about Working Family Tax Credits and check with HMRC or Personnel Department to see if they are affected before enrolling.

FAQ’s

How will I know if TEDS Premier is better value than the government childcare scheme?

When you complete the Parents Questionnaire, TEDS will then provide you with an estimate of what you can save via their scheme and the government scheme so you can always compare which might be the better option for you.

My 3 year old is going to qualify for 30 hours of free childcare - can I combine those savings with the TEDS benefit?

Yes, as long as your nursery fees don’t fall below the minimum £250 threshold per month.

How are nursery fees paid?

Your employer will pay your full nursery fees on your behalf on the first working day of each month and you will take a salary sacrifice within the same month’s payroll.

What if my nursery isn’t registered to the scheme?

There is a list with registered nurseries, but if there's a nursery parents would like to send their children to which isn’t on the list, iwoca encourages them to ask the nursery to sign up to TED’s. All the nursery is required to do is to fill out a form to sign up, which is easily done.

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