Employer-Sponsored Childcare Stipends Explained — Employee Childcare Benefits 101

Many organizations considering childcare benefits are interested in just how employer-sponsored childcare stipends work.

Even if you ultimately decide to go a different route for your childcare benefits program, this will be a useful exercise to help determine whether stipends may be right for you and your employees.

What are childcare stipends?

Childcare stipends are essentially employer-provided subsidies intended to help cover employee childcare costs. They can be designed to pay for full or partial costs of your employees’ childcare expenses.

While a childcare stipend is certainly not required as part of your childcare benefits package, it is appreciated very much by working families and also quite effective for organizations to increase retention, boost productivity, and improve recruitment. These aspects have helped childcare stipend offerings become more prevalent of late.

Whether opting for a full or partial childcare stipend, the program is straightforward to grasp and can be implemented quickly for your working parents to start leveraging these game-changing benefits for their families.

Setting up childcare stipends for success

When setting up childcare stipends for your organization, the first step is to determine the amount you want to contribute to cover each family’s childcare needs. This dollar amount can be per month or per year, whichever works best for you as the employer as well as your employees. Stipends can simply be applied directly to childcare costs or used as a reimbursement after care has been provided.

Your working parents can use their stipends on a variety of childcare options, such as daycares, babysitters, nannies, preschools, and tutors. The applications for childcare stipends span from school-age kids to infants and toddlers.

The flexibility of a childcare stipend makes it an incredibly valuable tool and practical benefit for families needing all types of care.

Did someone say tax credits?

In addition to the advantages we’ve already outlined, employees supported with childcare stipends report feeling less stressed and more focused at work. This makes a lot of sense, since parents who have crossed childcare off their list of concerns have more mental bandwidth to devote to their employers.

The benefits of offering childcare stipends don’t just end there, however. When you help pay for employees’ childcare, you can take advantage of available tax credits. You may be eligible for up to $150,000 in federal tax credits!

WeeCare can perform an analysis to calculate how much money in tax credits your organization can receive, if you’re interested in getting that insight. For some lucky employers, crunching the numbers reveals that a childcare benefits program with stipends will pay for itself, and then some.

As you evaluate the childcare benefit options available, consider whether a stipend program is the right choice for the working families at your organization. We are here to help at any point of the decision-making process and support you along the way.

We’re always around and reachable at benefits@weecare.co or by visiting WeeCare.co.

WeeCare was founded in 2017 and has become a leader in the childcare technology and employee childcare benefits spaces, building the largest network of childcare providers in the United States. The company is making strides in solving the childcare crisis by providing employers and families access to affordable, high-quality childcare while supporting childcare providers in operating sustainable businesses through a technology-based marketplace.

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