How the Workplace
Nursery Scheme works.
A government-backed salary sacrifice arrangement. YellowNest handles every step — from payroll integration to monthly nursery payments — so your HR team has nothing to manage.
You sign a simple partnership agreement
We send you a standard employer agreement covering the scheme rules, our service terms, and your HMRC obligations. Most employers sign within a day. No legal costs, no lengthy procurement process.
YellowNest integrates with your payroll
Our team works directly with your payroll provider to configure the salary sacrifice deduction. We support all major UK systems — Sage, Xero, ADP, IRIS, BrightPay. Typical integration time: one working day.
We communicate the benefit to your employees
YellowNest sends branded communications to your team, explains the savings, and manages every employee's enrolment, nursery verification, and salary sacrifice agreement. HR does nothing.
Payroll deductions run automatically each month
Each enrolled employee's gross salary is reduced by their nursery fee amount. Your payroll software applies the deduction. Both the employee and employer pay less National Insurance as a result.
YellowNest pays the nurseries directly
We collect the sacrificed amounts and pay each partner nursery on the agreed date every month — guaranteed. No late payments, no chasing invoices, no reconciliation work for your finance team.
You receive quarterly compliance reports
Each quarter we send you a full summary: total amounts sacrificed, NI saved, HMRC reporting status, and enrolled employee numbers. Everything you need for your own records and tax filings.
Your business saves too
Every pound your employees sacrifice reduces your employer National Insurance bill at 13.8%. For a team of 10 parents each sacrificing £1,200/month, that is over £19,000 saved per year — before any service fee.
YellowNest charges a fee to the employee, not the employer. Your direct cost to run the scheme is zero. The NI saving is pure benefit to your business from day one of the first payroll run.
Parents consistently rate childcare support as their most valued workplace benefit. Offering the scheme measurably improves retention among employees with young children — the most difficult and expensive to replace.
HMRC compliance — handled entirely by us
We meet the Workplace Nursery Benefit rules
HMRC requires the employer to have a genuine financial or management interest in the nursery. YellowNest structures every arrangement to meet this requirement through our partnership model — no grey areas.
Salary sacrifice agreements are legally valid
Every enrolled employee signs a legally valid salary sacrifice agreement prepared by YellowNest. These are retained on file and available for HMRC inspection at any time during our engagement.
We monitor regulatory changes proactively
HMRC guidance on salary sacrifice evolves. Our compliance team tracks every update and adjusts our documentation and processes accordingly. You are notified if anything affects your arrangements.
P11D and payroll reporting covered
Salary sacrifice correctly reduces the figures reported on employees' P60s and P11Ds. YellowNest provides the employer with all necessary figures at year-end to ensure accurate payroll reporting.
Ready to offer this to your team?
Book a free 30-minute demo. We'll walk through the scheme and send you a personalised NI savings estimate — no commitment required.