Tax-Free Childcare Calculator

Parents who each earn at least the equivalent of 16 hours a week at minimum wage, and under £100,000, can get a 20% top-up on childcare costs.

Updated 2026-10-03 · 2026/27 HMRC rates

Government top-up£1,600You pay £6,400 · for every £8 you pay in, the government adds £2

Your result is ready

Key facts

The personal allowance stays at £12,570 in 2026/27 and is reduced by £1 for every £2 of adjusted net income over £100,000, so it is gone entirely at £125,140 (HMRC income tax rates and allowances).
In England, Wales and Northern Ireland, 2026/27 income tax is 20% on the first £37,700 of taxable income, 40% up to £125,140 and 45% above that (HMRC rates and thresholds for employers 2026 to 2027).
Scotland has six bands in 2026/27: 19% starter on the first £3,967 of taxable income, 20% basic to £16,956, 21% intermediate to £31,092, 42% higher to £62,430, 45% advanced to £125,140 and 48% top above that (HMRC rates and thresholds for employers 2026 to 2027).
Budget 2025 extended the freeze on income tax thresholds and the equivalent employee and self-employed National Insurance thresholds for a further three years, from April 2028 to April 2031 (HM Treasury Budget 2025).
Employees pay Class 1 National Insurance at 8% on earnings between £12,570 and £50,270 a year and 2% above that in 2026/27 (HMRC rates and thresholds for employers 2026 to 2027).
Employers pay 15% National Insurance on earnings above the £5,000 secondary threshold, and eligible employers can claim an Employment Allowance of £10,500 (HMRC rates and thresholds for employers 2026 to 2027).
Self-employed people pay Class 4 National Insurance at 6% on profits between £12,570 and £50,270 and 2% above that; voluntary Class 2 costs £3.65 a week if profits are below £7,105 (GOV.UK self-employed National Insurance rates).
Dividend tax rose by 2 percentage points from April 2026: the basic rate is now 10.75% and the higher rate 35.75%, while the additional rate stays at 39.35% and the dividend allowance stays at £500 (GOV.UK tax on dividends).

Child benefit tax charge

How the Tax-Free Childcare top-up works

You open an online childcare account and pay money in. For every £8 you deposit the government adds £2, a 20% top-up on the total, and you pay your provider from the account. The cap is £500 per child every three months (£2,000 a year), or £1,000 a quarter (£4,000 a year) for a disabled child.

To reach the full £2,000 top-up you need to spend £10,000 a year on childcare for that child, of which you pay £8,000. The limit is quarterly, so a large summer holiday club bill can hit the £500 cap even if other quarters are well below it.

Annual childcare bill	You pay	Government top-up	Disabled child top-up
£2,500	£2,000	£500	£500
£5,000	£4,000	£1,000	£1,000
£10,000	£8,000	£2,000	£2,000
£15,000	£13,000	£2,000	£3,000

Who is eligible

You and your partner, if you have one, must each expect to earn at least the National Minimum Wage or National Living Wage for 16 hours a week on average over the next three months. From April 2026 that means at least:

£2,643.68 over three months (£203.36 a week) if you are aged 21 and over.
£2,256.80 over three months (£173.60 a week) if you are aged 18 to 20.
£1,664.00 over three months (£128.00 a week) if you are under 18 or an apprentice.
Neither of you can have expected adjusted net income over £100,000 for the tax year. One partner going over the limit stops the claim for both.
Your child must normally live with you and be 11 or under. Eligibility ends on 1 September after their 11th birthday, or 1 September after their 16th birthday if they are disabled.
The self-employed qualify too, and newly self-employed people do not need to meet the earnings test in their first 12 months.

Using your account

The provider must be approved: registered childminders, nurseries, nannies, after-school and holiday clubs, registered schools and home care workers from a registered agency. You can also pay for extras such as meals and trips when the provider supplies them.

You must sign in every three months to reconfirm your details. If you miss it, top-ups stop until you reconfirm.

Tax-Free Childcare and other support

You cannot get Tax-Free Childcare while claiming Universal Credit. Wait for a decision on your Tax-Free Childcare application before you cancel a Universal Credit claim, and use the government childcare calculator to see which is worth more. Universal Credit childcare usually suits lower earners because it can reimburse a larger share of costs.

If you or your partner get employer childcare vouchers, they must be stopped within 90 days of applying for Tax-Free Childcare. In England, free childcare hours for children aged 9 months to 4 years can be used alongside Tax-Free Childcare to pay for extra hours.

Worked example: two children

A couple pays £9,000 a year for a nursery place for their 3-year-old and £3,000 for after-school and holiday clubs for their 8-year-old. The top-up is 20% of each child’s costs: £1,800 for the nursery place and £600 for the clubs, a total of £2,400. Each child has its own account and its own cap, so one child’s unused allowance cannot be moved to the other.

In practice the nursery bill would be paid quarterly, so the family should check whether any quarter’s costs exceed ${g(T.taxFreeChildcare.maxPerChild / 4 / T.taxFreeChildcare.topUpRate)} per child, the level at which the ${g(T.taxFreeChildcare.maxPerChild / 4)} quarterly cap is reached.

Frequently asked questions

Can I get Tax-Free Childcare and Universal Credit?

No — you must choose one or the other for childcare costs.

I am employed and self-employed – which income counts?

You can use just your self-employed income if that would make you eligible, for example if your average self-employed earnings over the tax year are higher than what you expect to earn as an employee over the next three months.

Can I use Tax-Free Childcare for a nanny?

Yes, if the nanny is registered with Ofsted or the relevant regulator, or with a registered childcare agency.

What happens if my income goes over £100,000 during the year?

Eligibility is based on your expected adjusted net income for the year. Personal pension contributions or Gift Aid can bring adjusted net income back under the limit.

Do I get Tax-Free Childcare while on maternity leave?

Usually yes. Maternity, paternity, adoption and shared parental leave all count as being in work for eligibility.

Can I use Tax-Free Childcare for holiday clubs?

Yes, if the holiday club is a registered provider signed up to the scheme. After-school and breakfast clubs also qualify.

How much do I need to earn to qualify if I am over 21?

At least £2,643.68 over the next three months, which is 16 hours a week at the National Living Wage of £12.71.

Sources

Figures are taken from official government publications and were last reviewed on 2026-10-03.