Tax-Free Childcare Calculator
Your Tax-Free Childcare top-up: what you pay in and the 20% the government adds, the £2,000 / £4,000 per-child caps, monthly saving, a comparison with childcare vouchers, the £100,000 cliff warning and how it stacks with funded hours.
| Eligibility | — |
|---|---|
| Annual childcare cost | — |
| You pay into the account | — |
| Government top-up | — |
| Cap check (£2,000 / £4,000 per child per year) | — |
| Saving per month | — |
| Tax-Free Childcare vs childcare vouchers | — |
| £100,000 cliff warning | — |
| Funded hours on top | — |
In short
Tax-Free Childcare adds £2 for every £8 you pay into an online childcare account — a 20% top-up worth up to £2,000 a year per child under 12 (£4,000 for a disabled child under 17), paid quarterly up to £500. Both parents must earn at least about £2,700 a quarter and each have adjusted net income under £100,000; it cannot be combined with Universal Credit childcare or vouchers but stacks with 15/30 funded hours, and a pension contribution that keeps income under £100,000 preserves both.
Who this is for: UK working parents paying for nursery, childminders or wraparound care.
Tax-Free Childcare in brief
- What you get: for every £8 you pay into the account the government adds £2 — 20% off childcare costs, up to £2,000 a year per child under 12 (£4,000 per disabled child under 17).
- Who qualifies: working parents (both, if a couple) earning at least the equivalent of 16 hours a week at minimum wage (about £2,700 a quarter) and each under £100,000 of adjusted net income. Not with Universal Credit or vouchers.
- The cliff: one parent at £100,001 loses the top-up and the 30 funded hours — potentially £10,000+ a year. Pension contributions and Gift Aid reduce adjusted net income.
- Stacking: combine with 15/30 funded hours (England), or the equivalent Scottish, Welsh and NI schemes, and use TFC for wraparound and holiday care.
- Vouchers: the old scheme (closed 2018) saves tax and NI on up to £243 a month per parent — better for one child with modest costs; TFC is better for larger bills.
See also: UK Child Benefit & High Income Charge Calculator, UK Take-Home Pay Calculator 2026/27.
Assumptions
- Top-up = 20% of annual cost, capped at £2,000 (£4,000 disabled) per child; you pay the remaining 80%.
- Eligibility: both parents meet the earnings test and are under £100,000 adjusted net income; not on Universal Credit childcare or vouchers.
- Voucher comparison: voucher amount × 12 × 28% (basic) or 42% (higher).
Worked example
Annual cost £10,800. You pay in £8,640 and the government adds 20% = £2,160 — but the cap is £2,000 per child, so the top-up is £2,000 (£500 a quarter) and you pay £8,800. That is about £167 a month saved. Both incomes are well under £100,000. Compared with old-style vouchers (£243 a month saving a basic-rate taxpayer about £816 a year), Tax-Free Childcare is clearly better here.
Frequently asked questions
How much is Tax-Free Childcare worth?
20% of childcare costs, up to £2,000 a year per child (£500 a quarter) or £4,000 for a disabled child.
Who is eligible for Tax-Free Childcare?
Working parents — both if a couple — each earning at least about £2,700 a quarter and under £100,000 adjusted net income, with children under 12 (17 if disabled), not claiming Universal Credit childcare or vouchers.
Can I use Tax-Free Childcare with 30 hours free childcare?
Yes — the two schemes stack; TFC pays for hours beyond the funded entitlement and for holiday care.
What if I earn just over £100,000?
You lose both TFC and the funded hours. A pension contribution or Gift Aid donation that brings adjusted net income under £100,000 restores them — often worth far more than it costs.
Can the self-employed use Tax-Free Childcare?
Yes — self-employed parents qualify on the same earnings test, with a 12-month start-up period in which the minimum does not apply.
Can grandparents pay into the account?
Yes — anyone can pay in, and the government top-up applies to all deposits up to the cap.
Related calculators
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