Tax-Free Childcare Calculator, 2026/27

How this is calculated

Tax-Free Childcare works by the government adding £2 for every £8 a parent pays into a dedicated childcare account, an effective 20% top-up, up to a cap of £2,000 a year per child, or £4,000 for a child with a disability. This calculator works backwards from your expected total childcare cost to show how much of that the top-up will cover, capped where the cost is high enough to reach the maximum.

The money in the account can be used to pay registered childcare providers, including nurseries, childminders and after-school clubs, and any unused balance can be withdrawn, though the government top-up portion is then returned.

Because the cap is per child rather than per family, a family with two or three qualifying children can claim the top-up on each of them separately, which is not reflected in this single-child calculation.

Eligibility for directors and the self-employed

Both employed and self-employed parents can claim, provided each expects to earn at least the equivalent of 16 hours a week at the National Living Wage over the coming three months. Newly self-employed people, including new company directors, get an exemption from this minimum income test for their first year of trading.

Crucially, if either parent's individual income is expected to exceed £100,000 in the tax year, including salary, dividends, bonuses and most other taxable income, neither parent can use Tax-Free Childcare at all, which is a hard cliff-edge rather than a taper.

Choosing between Tax-Free Childcare and other support

Tax-Free Childcare cannot be claimed alongside Universal Credit childcare costs or employer-provided childcare vouchers for the same child, so families need to compare which scheme gives the better outcome, particularly if already receiving vouchers from an employer scheme that closed to new joiners some years ago.

Families should also check eligibility for free childcare hours schemes, which run alongside Tax-Free Childcare and are not affected by it, and can be combined for the same child.

How much top-up can I get through Tax-Free Childcare?

The government adds £2 for every £8 you pay in, up to a maximum top-up of £2,000 a year per child, doubled for a child with a disability.

Can self-employed directors claim Tax-Free Childcare?

Yes, provided expected income meets the minimum threshold, equivalent to 16 hours a week at the National Living Wage, and neither parent's income exceeds £100,000 in the tax year; newly self-employed people get a one-year exemption from the minimum income test.

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

You lose eligibility entirely for that tax year, since this is a hard limit rather than a taper, so directors close to the threshold should plan salary and dividend levels carefully if relying on the scheme.

Can I use Tax-Free Childcare and childcare vouchers together?

No, you must choose one scheme per family. If you are already in an employer voucher scheme, it is worth comparing the value of both before switching, since vouchers may still suit some higher earners better in certain circumstances.