Tax-Free Childcare Calculator
What is a tax free childcare calculator?
This tax free childcare calculator shows your 2026/27 government top-up: for every £8 you pay in, the state adds £2 — up to £2,000 per child per year (£4,000 if disabled). Enter your annual childcare spend to see your savings instantly. Each working parent normally needs minimum earnings, while neither can have adjusted net income over £100,000.
Read more
See your government Tax-Free Childcare top-up for 2026/27. Enter your annual childcare spend to see the £2-for-every-£8 bonus — up to £2,000 per child per year.
Many eligible families miss out because they don't realise they qualify. To be eligible, both parents must be working and earning at least 16 hours at minimum wage, but neither can earn more than £100,000. A common mistake is claiming Tax-Free Childcare while receiving Tax Credits or Universal Credit – you cannot have both.
Understanding how much Tax-Free Childcare you could receive helps you budget for nursery fees. Enter your childcare costs below to see your potential government top-up.
Based on the 2026/27 UK Tax-Free Childcare scheme. Calculation and caps reviewed: 1 October 2026.
How to use this tax free childcare calculator
Enter the registered childcare cost you expect to pay for each child. The tax free childcare calculator applies the 2026/27 £2 top-up for every £8 you contribute, checks each child's separate 3-month cap, and shows the government contribution and your net cost. Annual inputs assume funding spread evenly across four periods; use the period inputs for uneven funding. This estimates support assuming eligibility. Use costs left after funded childcare hours, because those hours can be combined with Tax-Free Childcare.
Tax Free Childcare calculator: 2026/27 rates and eligibility
2026/27 scheme rules — all conditions must be met to qualify.
| Rule | Detail |
|---|---|
| Child's age | Usually until the September after turning 11 (16 if eligible for disability support). Tax-Free Childcare has no 9-month minimum age. |
| Working status | Each parent normally works or is returning to work. Exceptions include some leave and caring circumstances. |
| Minimum earnings | Each parent aged 21+ normally expects at least £2,643.68 before tax over the next 3 months. Lower thresholds apply to younger parents and apprentices; some exceptions apply. |
| Maximum earnings | Neither parent has adjusted net income over £100,000/year. |
| Government top-up | £2 added per £8 deposited: 20% of the bill. Each child's cap is £500 every 3 months (£1,000 if disabled), up to £2,000/year (£4,000). |
| Cannot combine with | Universal Credit, Tax Credits, or employer childcare vouchers. |
Source: GOV.UK Tax-Free Childcare guidance. Verified 2026-10-01.
Your Childcare Details
Enter each child's eligible provider bill after funded hours, before Tax-Free Childcare. This estimates support assuming you qualify; it does not check eligibility.
Use this if account funding varies through the year.
How Tax-Free Childcare Works
A £250 eligible bill is funded by £200 from you and £50 from the government. The government pays 20% of the bill, which is a 25% top-up on your deposit.
Each child has a separate £500 limit every 3 months (£1,000 if eligible for the disability cap). Annual-only estimates assume funding is spread evenly over four periods. Periods follow your childcare account's entitlement dates, rather than calendar quarters.
For uneven costs, use the period inputs above. Confirm eligibility and account limits with GOV.UK.
Calculation and caps checked: 1 October 2026.
Government Contribution
Estimated Annual Government Top-Up
£2,000.00
Your estimate reaches the annual maximum.
Monthly Average Top-Up
£166.67
Effective Saving
20.0%
Your Real Cost
Separate Caps for Each Child
Maximum over four periods: £2,000.00.
Unused top-up allowance cannot be moved to another child or carried into a later period. Monthly figures are averages, not guaranteed monthly payments.
Worked example: £12,000 annual nursery bill
Suppose one child's registered nursery costs are £12,000 a year after funded hours, with account funding spread evenly across four entitlement periods. The uncapped top-up would be £2,400, but the standard annual limit is £2,000. You pay £10,000 into the childcare account, the government adds £2,000, and the full £12,000 bill is paid from the account.
That is an effective saving of 16.7% of this £12,000 bill, rather than 20%, because the annual cap has been reached. For costs of £10,000 or less per child, funded evenly across four periods, the government's contribution equals 20% of the total childcare payment.
Tax-Free Childcare vs Universal Credit — which is better?
You can't claim both. Universal Credit covers a higher percentage (up to 85%) and usually wins for lower earners. Tax-Free Childcare is simpler and pays up-front — better for middle and higher earners who don't qualify for UC. If in doubt, run the numbers on both.
| Tax-Free Childcare | Universal Credit childcare | |
|---|---|---|
| Government support | 20% of the eligible bill (£2 per £8 deposited) | Up to 85% of childcare costs reimbursed |
| Limits | £500 every 3 months per child (£1,000 if disabled); up to £2,000/year (£4,000) | Up to £1,071.09/month for 1 child, £1,836.16 for 2+ |
| Who can use it? | Eligible working parents; minimum earnings and other conditions apply | Lower-income households (UC-eligible) |
| Earnings ceiling | £100,000 per parent | Tapered — UC reduces as earnings rise |
| How it's paid | Government adds support to your childcare account when you deposit; pay the provider from that account | Reimbursed in arrears after receipts |
| Combine with free hours? | Yes — both work together | Yes — both work together |
Tax-Free Childcare — common questions
The £2 for Every £8 Rule
Tax-Free Childcare works by topping up your childcare payments. For every £8 you pay in, the government adds £2.
£8
You pay
+£2
Government adds
£10
Goes to childcare
This means the government effectively pays 20% of your childcare costs. You pay into a special childcare account, and they top it up automatically. You then use this account to pay your childcare provider directly.
Annual Caps Per Child
£2,000
Maximum top-up per child per year
(Covers up to £10,000 childcare)
£4,000
Maximum top-up for disabled children
(Covers up to £20,000 childcare)
Important: Each child has their own cap. If you have 2 children, your total maximum top-up is £4,000/year.
The limit is £500 every 3 months (£1,000 if disabled). Unused allowance cannot be carried to a later entitlement period or transferred to another child. Annual estimates assume funding across all four periods.
Incompatibility with Other Schemes
Tax-Free Childcare cannot be combined with some other childcare support schemes. If you're using one of these, you'll need to choose:
❌ Cannot Use Together
- Childcare vouchers (employer schemes)
- Universal Credit
- Tax Credits (Working Tax Credit/Child Tax Credit)
✓ Can Use Together
- 15 or 30 free childcare hours
- Child Benefit
- Other support only where the scheme rules allow it; childcare bursaries or grants can prevent eligibility
Tip: If you're currently on childcare vouchers, opening a Tax-Free Childcare account means your employer must stop issuing new vouchers, and you cannot rejoin the closed voucher scheme. You cannot keep taking new vouchers for one child while claiming Tax-Free Childcare for another — the choice applies to you as a parent. Vouchers already in your account do stay usable with your registered provider. Compare both before you switch.
Frequently Asked Questions
GOV.UK: Tax-Free Childcare rules and eligibility. Calculation and cap guidance checked: 1 October 2026.
Related Calculators
Childcare Cost Calculator
Estimate total childcare costs including free hours and all government support.
Calculate now →Take-Home Pay Calculator
Calculate your salary after tax to understand your childcare budget.
Calculate now →Salary Sacrifice Calculator
Compare with childcare vouchers if you're in an existing scheme.
Calculate now →What's Next?
Not sure which calculators you need?
Answer 7 quick questions and we'll show you exactly which UK costs apply to your situation. Takes under 60 seconds.