Tax-Free Childcare 2026/27 · Updated October 2026
Tax-Free Childcare calculator
Check whether you can get Tax-Free Childcare, see how much the government adds to your childcare bill, and compare it with Universal Credit.
Estimates only. HMRC confirms your eligibility when you apply. Sources: GOV.UK Tax-Free Childcare, NICSS.
How Tax-Free Childcare works
Tax-Free Childcare is a government scheme for working parents across the UK. You open an online childcare account, pay money in, and the government adds £2 for every £8 you pay. You then use the account to pay your registered childcare provider.
Government top-up
£2 for every £8 you pay in, on childcare costs up to £10,000 a year per child.
A year per child
Up to £500 every 3 months. Rises to £4,000 a year (£1,000 every 3 months) for a disabled child.
Child’s age
Until 1 September after your child turns 11, or 16 if they are disabled.
How to calculate Tax-Free Childcare
1. Find your childcare bill
A nursery charges £1,000 a month for one child.
2. Pay in 80%
You pay £800 into your childcare account.
3. The government adds 20%
The government adds £200, so £1,000 goes to your nursery. Over 3 months that is a £600 bill top-up, but the limit is £500, so you pay the extra £100 yourself.
Who can get Tax-Free Childcare?
- You and your partner, if you have one, are working, including self-employed, or on sick, annual, maternity, paternity or adoption leave.
- Each of you expects to earn at least £2,644 over the next 3 months if aged 21 or over. This is lower if you are under 21 or an apprentice.
- Neither of you expects adjusted net income over £100,000 in the tax year.
- You are not getting Universal Credit, tax credits or childcare vouchers.
- Your child usually lives with you and is aged 11 or under, or 16 or under if disabled.
Tax-Free Childcare, Universal Credit and free childcare compared
| Scheme | What you get | Limit | Use with others? |
|---|---|---|---|
| Tax-Free Childcare | 20% top-up | £2,000 a year per child | Yes, with funded hours |
| Universal Credit childcare | 85% of costs back | £1,071.09 a month for one child, £1,836.16 for two or more | Yes, with funded hours. Not with Tax-Free Childcare |
| Funded hours (England) | Up to 30 free hours a week, 38 weeks a year | Children aged 9 months to 4 | Yes, with either scheme |
Assumptions behind the calculator
- Costs are the same every month, and you pay all of them through your childcare account.
- The top-up is 20% of your bill, up to £2,000 a year per child, or £4,000 if disabled. In practice the limit applies every 3 months.
- Minimum earnings use the National Living Wage of £12.71 for 16 hours a week over 13 weeks.
- In Northern Ireland, the 15% subsidy is taken off before the top-up, up to £203 a month per child.
- Universal Credit is shown as 85% of your costs, up to the 2026/27 monthly limits. Your actual Universal Credit also depends on your income and circumstances.
Frequently asked questions about Tax-Free Childcare
How do I calculate Tax-Free Childcare?
Take your childcare bill and multiply it by 20%. That is the government top-up. You pay the other 80% into your account. For example, on a £1,000 bill you pay in £800 and the government adds £200. The top-up is capped at £500 every 3 months per child, or £1,000 if your child is disabled.
How much can I get from Tax-Free Childcare?
Up to £2,000 a year for each child, or £4,000 a year if your child is disabled. This is paid as up to £500 every 3 months per child, or £1,000 for a disabled child.
Who is eligible for Tax-Free Childcare?
Working parents of children aged 11 or under, or 16 or under if disabled. Each parent must expect to earn at least £2,644 over the next 3 months if aged 21 or over, and no parent can expect adjusted net income over £100,000. You cannot get it while you, or your partner, are getting Universal Credit.
Is Tax-Free Childcare better than Universal Credit?
Universal Credit can pay back up to 85% of childcare costs, compared with 20% from Tax-Free Childcare, so it is usually worth more if you can claim it. You cannot get both, so check which gives you more before applying.
Can I use Tax-Free Childcare with 30 hours free childcare?
Yes. You apply for both through the same childcare account. You can use Tax-Free Childcare to pay for hours and extras that your funded hours do not cover.
What can I pay for with Tax-Free Childcare?
Any registered childcare, including nurseries, childminders, nannies, after-school clubs and holiday clubs, as long as the provider is signed up to Tax-Free Childcare.
Is there a daycare tax calculator in the UK?
There is no tax relief on daycare or nursery fees in the UK. Instead, Tax-Free Childcare adds 20% to what you pay, which works like basic-rate tax relief. This calculator shows how much that is worth to you.
Can self-employed parents get Tax-Free Childcare?
Yes, if you meet the same rules. If you started your business in the last 12 months, you do not need to meet the minimum earnings rule.
Do I get the money back if I do not use it?
You can withdraw money you paid in, but the government top-up on that money is taken back. If you close your account, any remaining top-up returns to the government.