Tax-Free Childcare Calculator (2026/27)

Get the government to pay 25% of your childcare

Childcare is one of the biggest costs a working family faces, often rivalling the mortgage. Tax-Free Childcare is the government scheme that takes some of the sting out of it - for every £8 you pay into a special online account, the government adds £2, a 25% top-up, up to generous annual limits. Yet a surprising number of eligible families either don't claim it or don't realise how much it's worth.

This calculator shows exactly how much free money you could get based on what you spend, so you can see the benefit in pounds rather than percentages.

How Tax-Free Childcare works

You open an online childcare account through the government, and for every £8 you deposit, the state tops it up with £2. You then use the account to pay your registered childcare provider - nursery, childminder, after-school club, holiday camp and so on. The top-up is capped at £500 every three months (£2,000 a year) per child, or £1,000 every three months (£4,000 a year) for a disabled child.

So to get the maximum top-up for one child, you'd pay in £8,000 over the year and the government would add £2,000. This calculator lets you enter your actual childcare cost - monthly or quarterly - and shows the top-up and your total childcare budget once the government's contribution is added. Full eligibility detail is on GOV.UK's Tax-Free Childcare page.

Who is eligible?

The scheme is aimed at working families. Broadly, you and your partner (if you have one) each need to be working and expecting to earn at least the equivalent of 16 hours a week at minimum wage, but neither of you can earn over £100,000 a year - cross that line and you lose the whole entitlement, which is one reason high earners watch their adjusted net income carefully. The child must be 11 or under (16 or under if disabled).

There are special provisions for the self-employed and those on parental or sick leave. Because the rules have edges, it's worth confirming your eligibility directly with the government before relying on it.

How it compares to the alternatives

Tax-Free Childcare replaced the old employer childcare voucher scheme for new entrants, and you generally can't use both at once. It also can't be combined with the childcare element of Universal Credit - you have to choose whichever leaves you better off. For many working families not on Universal Credit, Tax-Free Childcare is the obvious win.

It also sits alongside the free childcare hours available to working parents of young children, and you can usually use both together: the free hours cover a chunk of the cost, and Tax-Free Childcare helps with the rest. Running the numbers for your own situation is the only way to be sure, which is what this tool is for.

The £100,000 trap

One of the most important things to understand is the £100,000 income limit. If either parent's adjusted net income exceeds £100,000, the whole family loses Tax-Free Childcare - there's no taper, it's a cliff edge. This combines brutally with the loss of the Personal Allowance, which also tapers away between £100,000 and £125,140, creating an effective marginal tax rate north of 60% in that band.

Parents near £100,000 can sometimes restore both their allowance and their childcare entitlement by making pension contributions or salary sacrifice, which reduce adjusted net income. Our Salary Sacrifice Calculator and Pension Tax Relief Calculator show how that works, and the Income Tax Calculator illustrates the 60% trap itself.

A worked example

Imagine your nursery costs £900 a month for one child. Over a year that's £10,800. The 25% top-up would be £2,700 - but it's capped at £2,000 per child per year, so you'd receive the full £2,000 and pay the rest yourself. If instead your costs were £600 a month (£7,200 a year), the 25% top-up of £1,800 is under the cap, so you'd get the whole £1,800.

The calculator handles the cap automatically and flags when you've hit it, so you can see at a glance whether you're getting the maximum benefit.

Making childcare costs work with your budget

Childcare is rarely the only big number in a young family's budget. Once you know your real childcare cost after the top-up, it's worth looking at the household finances as a whole. Our Budget Planner helps you map income against outgoings, the Take-Home Pay Calculator shows what each parent actually brings home, and if one parent is considering reducing hours, the Pro-Rata Salary Calculator shows the effect on pay.

Families also shouldn't overlook Child Benefit - and the High Income Child Benefit Charge that can claw it back - which our Child Benefit Tax Calculator explains.

The bottom line

Tax-Free Childcare is, for eligible families, close to free money - a 25% government top-up on a cost you're paying anyway. The two things to get right are claiming it in the first place and keeping an eye on the £100,000 income limit, which can be managed with pension planning. Enter your childcare cost above to see your top-up and total budget, then use the rest of the TaxFly toolkit to fit it into your wider family finances.

Free childcare hours vs Tax-Free Childcare

Families often confuse the two main forms of childcare support, but they're separate and can usually be used together. The free childcare hours scheme gives working parents of younger children a number of funded hours per week during term time (with the offer having expanded in stages). Tax-Free Childcare is the 25% top-up on what you pay, covered by this calculator.

In practice many families use the free hours to cover part of their nursery bill and Tax-Free Childcare to help with the rest, plus holiday and wraparound care. What you generally can't do is combine Tax-Free Childcare with the childcare element of Universal Credit, or with old-style employer childcare vouchers - you pick whichever leaves you better off. Because the right answer depends on your income and costs, it's worth modelling both.

How to claim and keep it running

You apply online through the government's childcare service and, once approved, pay money into your childcare account whenever you like; the top-up is added automatically. One thing that trips families up is reconfirmation - you have to confirm your details are still correct every three months to keep the account active, and missing that can pause your top-ups. Set a recurring reminder so it never lapses.

You can pay in irregularly too: if your costs spike over the summer holidays, you can front-load deposits (up to the quarterly cap) to capture more top-up. The official process and eligibility checker are on GOV.UK's get Tax-Free Childcare page.

Protecting your eligibility near £100,000

Because the scheme disappears entirely if either parent's adjusted net income tops £100,000, parents earning near that figure have a strong incentive to manage it. Pension contributions and salary sacrifice both reduce adjusted net income, and can bring you back under £100,000 - restoring not just Tax-Free Childcare but also part of your Personal Allowance, which tapers in the same income band.

The combined effect can be an effective tax saving well over 60% on income in that range, making pension contributions extraordinarily efficient for affected parents. Model the impact with our Pension Tax Relief Calculator and Salary Sacrifice Calculator, and see the underlying tax trap in the Income Tax Calculator.

Fitting childcare into the family budget

Even with a 25% top-up, childcare is a major outgoing, and it's worth looking at it in the context of both parents' take-home pay. Sometimes the "second income after childcare" maths is closer than it first appears - though pension contributions, career progression and the value of staying in work usually tip the balance towards working.

Use our Take-Home Pay Calculator to see what each parent nets, the Pro-Rata Salary Calculator if one of you is considering fewer hours, and the Budget Planner to map it all against your outgoings. And don't overlook Child Benefit, which adds up over the years.

The bottom line on Tax-Free Childcare

Tax-Free Childcare is one of the most valuable forms of support a working family can claim, yet it's routinely overlooked or misunderstood. The headline is simple: the government adds 25% to what you pay, up to £2,000 a year per child (£4,000 if your child is disabled). For a family already spending thousands on nursery or childminder fees, that's a substantial, recurring saving on a cost you can't avoid.

The two pitfalls to watch are the £100,000 income cliff-edge, which removes the benefit entirely and can often be managed with pension contributions, and the quarterly reconfirmation that keeps your account active. Beyond that, it's worth checking each year whether Tax-Free Childcare or another form of support (such as Universal Credit's childcare element) leaves you better off, since you can't use both.

Use the calculator above to see your top-up in pounds rather than abstract percentages, pair it with the free childcare hours where you qualify, and fold the net cost into your wider family budget. Done well, it can knock hundreds or even thousands off your annual childcare bill - money far better in your pocket than left unclaimed.