The workplace nursery scheme is often discussed from the perspective of parents and employers, both of whom stand to gain financially from the arrangement. However, nurseries themselves are also significant beneficiaries of this scheme, and understanding the nursery's role helps explain why the partnership model works so well for everyone involved.

What the Scheme Looks Like From a Nursery's Point of View

When a nursery enters into a partnership with an employer through the workplace nursery scheme, it gains access to a reliable stream of additional funding. The employer, as part of the formal partnership, makes a monthly financial contribution to the nursery. This contribution is typically a minimum of £150 per month per employee using the scheme, and can be higher depending on what the employer and nursery agree.

This income is distinct from nursery fees. It comes directly from the employer and represents compensation for the nursery's role in the partnership. For nurseries that partner with multiple employers or have a number of employees from the same employer using the scheme, this additional income can be very significant.

The Partnership Formalises the Relationship Between Nurseries and Employers

One of the most valuable aspects of the workplace nursery scheme for nurseries is that it creates a formal, documented relationship with local employers. This kind of partnership can open doors to broader engagement with the business community, stronger relationships with parents whose employers are invested in the nursery's success, and greater visibility for the nursery as a high quality setting.

The childcare salary sacrifice element of the scheme means that parents who use it are making a long term commitment to the nursery through a minimum 12 month contract. This provides the nursery with greater certainty around occupancy and income planning.

What HMRC Requires of the Nursery

For the scheme to qualify under HMRC rules, the nursery must be registered with OFSTED and must not be situated in a private dwelling. These are fundamental requirements that ensure the nursery is a legitimate and properly regulated childcare provider.

Beyond these basic conditions, the nursery needs to be willing to enter into a formal contract with the employer and to receive the employer's financial contribution as part of the arrangement. The nursery must also confirm the fee schedule for each participating parent at the start of the contract, as this forms the basis of the salary sacrifice calculation.

Nurseries That Do Not Currently Know About the Scheme

Many nurseries are not aware of the workplace nursery scheme or have only heard of it vaguely. If a parent registers for the scheme but their nursery is not yet familiar with it, specialists in this area will contact the nursery management directly to explain the benefit and establish the relationship.

This proactive outreach means that nurseries do not need to have prior knowledge of the scheme to participate. They simply need to be willing to engage with the process once it is explained to them. In most cases, when nurseries understand that the scheme brings them additional funding and does not create additional administrative burden on their end, they are receptive.

The Financial Contribution Explained

The employer's monthly contribution to the nursery is one of the defining features of the workplace nursery scheme. This contribution is typically recommended to be at least equal to the employer's NI saving on the salary sacrificed. From April 2025, with employer NI at 15%, this means the contribution grows in line with the employer's own savings from the scheme.

The minimum contribution is £150 per month, which equates to £1,800 per year per employee using the scheme. For a nursery with several employees from the same employer enrolled in the scheme, this additional income can make a meaningful difference to financial planning.

How to Get Your Nursery Involved

If you are a nursery manager or owner who is curious about partnering with employers through the workplace nursery scheme, the process is relatively straightforward. Specialists can explain the requirements, help establish partnerships with interested employers, and guide you through the contractual documentation needed to formalise the arrangement.

The scheme is open to nurseries across the UK, provided they meet the OFSTED registration requirement and are not operating out of a private dwelling. There is no geographic restriction on which employers and nurseries can partner.

Conclusion

The workplace nursery scheme delivers meaningful financial and relational benefits to nurseries as well as to parents and employers. Through the childcare salary sacrifice arrangement, nurseries gain reliable additional funding, formal employer partnerships, and greater long term planning certainty. For any nursery that has not yet explored this scheme, it represents a genuine opportunity to strengthen the business while supporting the families you serve.