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    Tax-Free Childcare Calculator UK 2026/27

    Childcare Details

    Enter the annual cost for one child

    Disabled children receive up to £4,000 per year (double the standard amount)

    Enter your childcare costs to see government contribution

    How Tax-Free Childcare Works in 2026/27

    Tax-Free Childcare is a UK government scheme that helps working families with childcare costs. For every £8 you pay into your Tax-Free Childcare account, the government automatically adds £2 - giving you a 20% discount on childcare expenses. Our calculator shows exactly how much you can save based on your childcare costs and number of children.

    The scheme provides up to £2,000 per child per year in government contributions (£500 per quarter), or up to £4,000 per year (£1,000 per quarter) for children with disabilities. This financial support helps working parents afford quality registered childcare, making it easier to balance work and family commitments. Use our calculator above to see your potential savings.

    Who Can Use Tax-Free Childcare?

    To be eligible for Tax-Free Childcare, both you and your partner (if you have one) must be working and each earning at least the equivalent of 16 hours per week at the National Minimum or Living Wage. For 2026/27, this means approximately £195.36 per week or £10,159 per year. Crucially, neither parent can earn more than £100,000 per year in adjusted net income.

    Self-employed parents can absolutely use the scheme. You need to expect to earn the minimum income threshold over the coming three months. If you've been self-employed for less than twelve months, you may be exempt from the minimum income requirement in your first year. You can use our Self-Employed Tax Calculator to check your taxable income and ensure you meet the eligibility criteria.

    Your children must be aged 11 or under (or 16 or under if disabled) and you cannot claim Tax-Free Childcare if you're receiving Tax Credits, Universal Credit's childcare element, or childcare vouchers through an employer scheme. If you're claiming Universal Credit but not the childcare element, you're still ineligible - the schemes are completely mutually exclusive. Check the official GOV.UK guidance for full eligibility details.

    How to Calculate Your Tax-Free Childcare Savings

    Our Tax-Free Childcare calculator uses the official government formula to show your exact savings. The government contributes £2 for every £8 you pay into your childcare account, which works out to a 20% top-up on your contributions. For example, if your nursery costs £800 per month (£9,600 per year), you pay £7,680 and the government adds £1,920, giving you the full £9,600 to pay your provider.

    The maximum government contribution is £2,000 per child per year. This means if your childcare costs £10,000 or more annually for one child, you'll receive the maximum £2,000 contribution. If your costs are lower - say £6,000 per year - you'll receive 20% of that amount (£1,200). For disabled children, the limits double: up to £4,000 per year in government contributions based on childcare costs up to £20,000.

    If you have multiple children, each child gets their own contribution limit. Two children with standard eligibility means up to £4,000 total in government contributions per year (£2,000 per child). Three children means up to £6,000 total. Our calculator automatically works out the combined saving for all your children, plus shows quarterly breakdowns since the scheme operates on three-month cycles.

    Tax-Free Childcare vs Universal Credit

    The most important decision many families face is choosing between Tax-Free Childcare and Universal Credit's childcare costs element. These are mutually exclusive - you cannot claim both. Universal Credit reimburses up to 85% of childcare costs with maximum monthly limits of £1,031.88 for one child or £1,768.94 for two or more children. For many low to moderate income families, Universal Credit provides more generous support than Tax-Free Childcare.

    Consider a family paying £800 per month (£9,600 per year) in childcare. Under Tax-Free Childcare, they receive £1,920 in government contributions (20% of costs). Under Universal Credit, assuming they claim the full 85% reimbursement, they could receive up to £8,160 (85% of £9,600, within the monthly caps). That's a difference of over £6,000 per year in favor of Universal Credit.

    However, Universal Credit is means-tested. If your household income is too high, you won't qualify for Universal Credit at all, making Tax-Free Childcare your only option for government childcare support. Before making any changes, use the official Childcare Choices calculator on GOV.UK to see which scheme provides more support for your specific circumstances.

    Using Tax-Free Childcare with Free Childcare Hours

    Tax-Free Childcare works alongside the government's funded childcare hours schemes. England offers 15 hours per week of free childcare for all three and four-year-olds, with 30 hours available for working parents. The scheme expanded from September 2024 to include 15 hours for eligible two-year-olds, and from September 2025, working parents can access 30 hours for children from nine months old.

    You can use Tax-Free Childcare to pay for hours beyond your free entitlement. Many parents use their 30 free hours during term time for core nursery hours (typically 9am-3pm), then use Tax-Free Childcare to cover wraparound care before 9am and after 3pm, holiday clubs during school breaks, and any additional hours when the free entitlement doesn't match their working pattern. The free hours don't cover meals, nappies, trips, or other extras - Tax-Free Childcare can fund these additional costs.

    How the Quarterly System Works

    Tax-Free Childcare operates on a quarterly cycle. Contribution limits refresh every three months, meaning you can receive up to £500 in government top-ups per quarter for each standard child (£1,000 for disabled children). If you don't use the full £500 in one quarter, you cannot carry unused entitlement forward - each quarter starts fresh with the full limit available.

    Every three months, you must reconfirm your eligibility by logging into your account and answering questions about your work status, income, and circumstances. HMRC sends email reminders when your reconfirmation date approaches. If you miss the reconfirmation deadline, the government stops adding the 20% top-up to your payments until you complete the overdue reconfirmation. Your account stays open and you can still use money already in it, but new payments won't receive government contributions.

    Applying for Tax-Free Childcare

    Applying happens entirely online through the Childcare Choices website at GOV.UK. You'll need your National Insurance number, partner's National Insurance number (if applicable), and details about your employment or self-employment. Self-employed applicants need their Unique Taxpayer Reference (UTR) from Self Assessment registration. The application takes approximately 20 minutes.

    Once approved, you receive a code for each child. Give this code to your childcare provider so they can confirm they're registered to receive Tax-Free Childcare payments. You can then start paying money into your account and the government automatically adds the 20% contribution. Most registered nurseries, childminders, after-school clubs, and holiday clubs have signed up to the scheme. For more information on income thresholds and tax planning, see our Income Tax Calculator.

    What Happens If You Earn Over £100,000?

    If either parent's adjusted net income exceeds £100,000 during a tax year, you become ineligible for Tax-Free Childcare. HMRC will stop providing top-ups from the date your income crossed the threshold and may reclaim contributions made during the ineligible period. High earners approaching £100,000 should track their income carefully and consider making pension contributions or Gift Aid donations to reduce adjusted net income below the threshold.

    Adjusted net income is your total taxable income minus certain deductions like pension contributions and Gift Aid donations, but before tax is deducted. A parent earning £105,000 who contributes £6,000 to their pension would have an adjusted net income of £99,000, maintaining Tax-Free Childcare eligibility. Check our Pension Relief Calculator to see how pension contributions affect both your tax position and Tax-Free Childcare eligibility.

    Further Information and Resources

    For official information about Tax-Free Childcare, visit GOV.UK Tax-Free Childcare. The MoneyHelper website provides independent guidance on childcare costs and comparing different support schemes.

    If you need help with childcare costs, the Tax-Free Childcare helpline is available on 0300 123 4097 (Monday to Friday, 8am to 6pm). For broader questions about balancing work and family finances, Working Families offers free expert advice and resources for working parents navigating childcare, flexible working, and parental rights.

    Related Tax Calculators

    Childcare eligibility depends on income and deductions, so these calculators help test the income side of the rules. use the income tax calculator to estimate adjusted take-home pay, use the pension tax relief calculator to see how contributions affect income and use the student loan repayment calculator for payroll deductions.

    Income Tax
    Calculate PAYE take-home pay
    National Insurance
    Employee & employer NI contributions
    Student Loan
    Plan 1, 2, 4 & postgraduate

    Frequently Asked Questions

    What is Tax-Free Childcare and how does it work?+
    Tax-Free Childcare is a UK government scheme where for every £8 you pay into a dedicated childcare account, the government adds £2 (a 25% top-up). You can receive up to £2,000 per child per year (or £4,000 for disabled children). It's available for working parents whose children are under 12 (or under 17 if disabled).
    How much can I save with Tax-Free Childcare?+
    You can receive up to £2,000 per child per year in government contributions (£500 per quarter). For a disabled child, the maximum is £4,000 per year (£1,000 per quarter). If you spend £10,000 annually on childcare, you'll receive the maximum £2,000 government top-up.
    Am I eligible for Tax-Free Childcare?+
    You're eligible if: both you and your partner are working and each earn at least £195.36 per week; neither earn over £100,000 per year; your child is under 12 (or under 17 if disabled); you're not receiving Tax Credits, Universal Credit, or childcare vouchers; and your childcare provider is registered.
    Can I use Tax-Free Childcare if I'm self-employed?+
    Yes, self-employed parents can use Tax-Free Childcare. You must earn at least £195.36 per week (approximately £10,159 per year) but not more than £100,000 per year. If you've been self-employed for less than 12 months, you may be exempt from the minimum income requirement in your first year.
    Can I use Tax-Free Childcare with Universal Credit?+
    No, Tax-Free Childcare and Universal Credit are mutually exclusive. If you open a Tax-Free Childcare account while claiming Universal Credit, you'll lose ALL your Universal Credit payments. Universal Credit's childcare element covers up to 85% of costs (max £1,031.88 per month for one child), which is often more generous for low-income families.
    How often do I receive the government top-up?+
    The Tax-Free Childcare account operates quarterly. You can pay money in at any time, but the maximum contribution limits refresh every three months. You can receive up to £500 in government contributions per quarter for standard children (£2,000 per year). You must reconfirm your eligibility every three months.
    Can I use Tax-Free Childcare alongside the 30 free hours?+
    Yes, you can use Tax-Free Childcare together with the government's funded childcare hours (15 or 30 hours). Tax-Free Childcare helps you pay for additional hours beyond the free entitlement, or for costs not covered by the free hours such as meals, trips, or wraparound care.
    What happens if I go over the £100,000 income threshold?+
    If either you or your partner earn more than £100,000, you become ineligible. HMRC will stop providing top-ups and may reclaim any government contributions made during that period. You should inform HMRC immediately if your income exceeds £100,000.
    How is Tax-Free Childcare different from childcare vouchers?+
    Childcare vouchers (employer-supported childcare) were closed to new applicants in October 2018. Vouchers work through salary sacrifice and save income tax and National Insurance. Tax-Free Childcare provides a direct 20% government top-up. For most families, Tax-Free Childcare offers better value.
    What childcare providers can I pay with Tax-Free Childcare?+
    You can use Tax-Free Childcare to pay registered childcare providers including: nurseries, childminders, after-school clubs, holiday clubs, and home care workers registered with Ofsted or equivalent. The provider must have signed up to Tax-Free Childcare. You cannot use it for informal care from family members.
    Do both parents need to apply for Tax-Free Childcare?+
    No, only one parent needs to apply and manage the account. However, both parents must meet the eligibility criteria: both must be working and earning between the minimum (£195.36 per week) and maximum (£100,000 per year) thresholds.
    What happens if I stop working or my circumstances change?+
    You must inform HMRC immediately if your circumstances change. If you become ineligible, HMRC will stop providing top-ups and may ask you to repay any government contributions received during the ineligible period. You can keep your account and money in it to use for childcare.