Edenred Creche: What the law says about childcare benefits

15 de July, 2024

The extra-salary benefits that companies give their employees are more useful and relevant the more flexible they are. That is, the more adaptable they are to employees’ needs and interests.

These needs and interests tend to vary depending on the stage of life employees are going through. For example, when they have young children, they can be expected to value childcare benefits, since the cost of crèches, nurseries and the like can represent a large slice of the family budget.

Find out how Edenred Creche can help companies consolidate their extra-salary benefits policy and maximize employees’ disposable income.

What is Edenred Creche?

The Edenred Creche is a social benefit that companies can grant to employees in order to help them cover the costs of childcare and education for children under the age of 7.

Edenred Creche is not a means of payment, but a social voucher, in that it aims to guarantee workers access to a certain product or service. In this case, access to services related to the childhood and education of children or dependents up to and including the age of 6.

What is the legal and fiscal framework for childcare benefits?

As it is a social benefit, Edenred Creche has a different legal and fiscal framework to cash payments. Decree-Law no. 26/99, of January 28th (amended by Law nº. 82- E/2014, of December 31st), establishes the conditions for issuing and allocating childcare vouchers.

One of the aspects that employers must ensure is the principle of universality: childcare vouchers have associated tax benefits for both the company and the employee, but only if they are granted to all eligible employees, i.e. all employees with children or dependents under the age of 7. If they are not awarded in accordance with this principle, the benefit is considered supplementary remuneration and the relevant taxes apply.

Ensuring this universal nature, childcare vouchers such as Edenred Creche have the following tax benefits:

• Company: total exemption from TSU and 40% increase in IRC;
• Employee: total exemption from TSU and IRS.

These tax advantages apply to any amount granted, as there are no legal limits on the amount granted to employees.

Where can Edenred Creche be used?

As it is a social benefit, and aims to ensure that the amount awarded is used only for the purpose for which it is intended, Edenred Creche can be used in a network of establishments with a contract with the social voucher issuer – in this case, Edenred.

As such, Edenred Creche can be used in more than 3,200 public and private establishments in Portugal: crèches, nurseries, lactariums, kindergartens and the like.

See the network of participating establishments here.

How does Edenred Creche work?

Edenred Creche is a 100% digital social voucher that works as follows:

1. Firstly, the company awards the Edenred Creche through the Client Portal, selecting the eligible employees.
2. Employees receive an email informing them that they have been granted this benefit and add it to their education wallet in the MyEdenred App.
3. You can then use your available balance to make payments at participating establishments. All they have to do is enter their details and select the respective establishment.
4. After confirmation via SMS token, the payment is automatically validated.

What are the advantages of Edenred Creche for companies and employees?

The provision of non-salary benefits, such as Edenred Creche, allows companies to improve their value proposition for employees. This has an impact on their motivation and, consequently, their productivity. Thus, the main advantages of this benefit for organizations are:

• Tax savings compared to the allocation of the same amount in cash (total exemption from TSU and 40% increase in IRC);
• Greater ability to attract and retain talent, as employees feel more satisfied and motivated;
• Simple allocation and management processes, with a low administrative burden;
• Guarantee of compliance through compliance with all legal and tax requirements, as well as security in the processing of employees’ personal data;
• Dedicated customer support line.

These advantages extend to the employees themselves:

• More disposable income for childhood expenses (total exemption from TSU and IRS);
• Improved well-being and quality of life for employees and their families, thanks to access to essential services;
• Secure, fast and 100% digital payments via the MyEdenred App;
• Access to the Discounts and Advantages Program, with exclusive discounts on more than 60 health and beauty brands, leisure, technology, energy, fuel, insurance and much more;
• Dedicated user support line.