Transparency
How we calculate savings.
Our methodology, worked examples for the rest of the UK and for Scotland, and the evidence behind Halo Pay.
Methodology
How the calculator works.
Halo Pay lets an employee meet part of their nursery fees from pre-tax salary, which lowers their taxable pay. Our calculator models that change using the income-tax bands that apply where the employee lives and the current employee NI rates, and assumes the employer arrangement qualifies under the workplace nursery exemption (Section 318 ITEPA 2003).
Income tax in Scotland uses different bands from the rest of the UK. We always apply the right bands for the employee, and we work the saving out band by band on the reduction in taxable pay — never at a single headline rate.
Assumptions
What the figures assume.
- 1
The participating employee has a signed Halo Pay agreement with their employer.
- 2
The employer’s payroll processes the Halo Pay arrangement for the relevant pay period.
- 3
Tax and NIC rates used are those in force for the 2026/27 tax year. We update the figures when HMRC or the Scottish Government publishes changes.
- 4
Income tax is worked out on the right bands for where the employee lives — Scottish taxpayers are on the Scottish bands, everyone else on the rest-of-UK bands.
- 5
No other salary changes (for example, pension changes) materially affect the calculation.
- 6
The employer meets the conditions of the workplace nursery exemption (Section 318 ITEPA 2003).
Worked examples
The same family, two sets of tax bands.
Both examples take a £35,000 salary and £1,200 a month of nursery fees (£14,400 a year met through Halo Pay). Because Scotland has its own income-tax bands, the income-tax part of the saving is worked out differently — so the totals differ.
Rest of the UK
England, Wales & Northern Ireland
Basic-rate band (20% income tax, 8% employee NI)
On these figures the £14,400 reduction in taxable pay sits wholly within the basic-rate income-tax band and the main NI band, so the saving works out at 20% income tax plus 8% employee NI across the full amount.
Scotland
Scottish income-tax bands apply
Worked out across the Scottish starter, basic & intermediate bands
Scotland has its own income-tax bands, so the same £14,400 reduction is worked out band by band — across the intermediate (21%), basic (20%) and starter (19%) rates — rather than at one flat rate. Employee NI is UK-wide, so that part is the same. This is why a single-rate shortcut gives the wrong answer for a Scottish taxpayer.
These are illustrative examples for the 2026/27 tax year. Actual savings depend on salary, where the employee lives, the income-tax bands that apply, and nursery costs.
Governance
Independent review.
An independent review of Halo’s structure under the workplace nursery exemption has been completed by a qualified tax advisory firm. The review considered all four conditions of Section 318 ITEPA 2003, including the partnership requirements for financing and management. Documentation is available on request — contact compliance@halobenefits.co.uk.
Records
Documentation we hold.
- Dated independent tax opinion on the Halo Pay structure
- Calculator methodology and archived sample calculations
- Employer onboarding and governance documentation
- Family Circle records and minutes
- Payroll records retention policy
To request documentation, email compliance@halobenefits.co.uk.
This is not tax advice. Actual savings depend on your circumstances, employer participation, and nursery costs.
Want to see what it could mean for your team?
Talk to our team and we’ll walk you through the numbers for your people.