Children and childcare
Tax-Free Childcare calculator: what the government adds to your bill
Enter the monthly nursery or club bill and the number of children; the top-up and the cap follow.
Checked by Radif Partners · Editorial policy · How we calculate
Tax-Free Childcare pays 20% of an approved childcare bill: for every £8 you put into an online childcare account, the government adds £2, up to £500 every three months for each child, or £2,000 a year. For a disabled child the cap doubles to £1,000 a quarter and £4,000 a year. The cap is reached when a quarter’s bill hits £2,500, so most full-time nursery places use the whole top-up. A child qualifies until the September after their 11th birthday, or 16th if disabled. Each parent must expect to earn at least £2,643.68 over the next three months if aged 21 or over, and neither can expect adjusted net income above £100,000. The scheme cannot be combined with Universal Credit or employer childcare vouchers. The calculator takes your monthly bill, the number of children and how many are disabled, and returns the quarterly top-up and the year’s total.
Government top-up a year
£2,000
£500.00 a quarter; you pay in £2,200.00
| Bill for 3 months | £2,700.00 |
| Top-up (£2 for every £8 you pay in) | £500.00 |
| Quarterly cap for your children | £500 |
Each parent must expect to earn at least £2,643.68 over the next 3 months (21 or over) and no more than £100,000 adjusted net income. You cannot get Tax-Free Childcare and Universal Credit childcare costs together.
A worked example
A nursery charges £1,100 a month for a two-year-old, or £3,300 a quarter. Tax-Free Childcare would cover 20% of that, £660, but the top-up stops at £500, so the parents pay £2,800 into the account and receive £500 each quarter: £2,000 over the year. The same family with a second child at an after-school club would have a second, separate £500 allowance. A bill of £833 a month or less per child gets the full 20%.
Who can open an account
You, and your partner if you live together, must be working, self-employed, on sick, annual or parental leave, or about to start a job. Each must expect to earn at least £2,643.68 over the next three months at 21 or over (£2,256.80 at 18 to 20, £1,664.00 for under-18s and apprentices), which is 16 hours a week at the minimum wage. The self-employed in their first year are exempt from the minimum. A partner who is not working can still qualify through Carer’s Allowance or certain incapacity benefits. The full eligibility rules are on GOV.UK.
The provider must be registered or approved, such as a nursery, childminder, registered nanny, school or holiday club, and signed up to the scheme. Money paid in usually appears within one working day, with the top-up added at the same moment.
Keeping it going
Sign in every 3 months to confirm your details, or the top-up stops. If you are on Universal Credit, compare the two options first: Universal Credit childcare costs can be worth more on lower earnings. Parents of children aged 9 months to 4 in England should also check the 30 hours of free childcare, which uses the same account.