What is Tax-Free Childcare?

Tax-Free Childcare is a government scheme where for every £8 you pay into a childcare account, the government adds £2 (up to £500 per quarter per child).

Can Tax-Free Childcare be used alongside other government childcare support?

Tax-Free Childcare cannot be combined with the childcare element of Working Tax Credit, Child Tax Credit, or the childcare cost support within Universal Credit — you must choose whichever delivers the greater saving. Legacy employer childcare vouchers, closed to new members since October 2018, also cannot be combined with Tax-Free Childcare. The funded hours entitlement for three and four year olds is separate and can be used alongside Tax-Free Childcare, reducing your paid-for hours before the government top-up is applied.

Childcare Cost Calculator UK

Useful next calculations

Check the gain from returning to workCombine take-home pay with childcare, travel, pension and potential support.
Build a parental-leave timelineMap twelve months of leave pay, household costs, return pay and childcare.

When to use this calculator

When you need a fast estimate before making a bigger decision.
When you want to compare a few scenarios using the same assumptions.
When you need a clearer starting point before using a detailed quote or formal document.
When you want to sanity-check a figure you have seen elsewhere.

A worked example

These are the example figures the calculator opens with.

A worked example
Input	Value
Hours Per Week	40
Hourly Rate (£)	£8
Weeks Per Year	48
Free Funded Hours Per Week	15

For those figures the calculator returns:

Annual cost: £9,600.00
Monthly: £800.00
Tax-Free Childcare saving: £1,920.00
Net annual: £7,680.00

How to read your results

Tax-Free Childcare Saving

Review this figure alongside your gross income so you can understand deductions before the tax year closes. It is a planning estimate, not a filed return.

Method & assumptions

This calculator estimates weekly, monthly, and annual childcare costs based on the number of sessions or hours required and the hourly or daily rate charged by your provider. You can apply free funded hours entitlements to see the net cost after government support. It also estimates potential Tax-Free Childcare savings based on the government's 20% top-up rule, subject to the annual £2,000 cap per child.

The calculator assumes standard term-time funded hours and does not account for holiday surcharges, registration fees, or meal charges that some providers levy separately. Eligibility for funded hours and Tax-Free Childcare depends on individual circumstances. Always confirm entitlement with your local authority or on the Childcare Choices government website.

Common mistakes

Using optimistic assumptions without testing a more cautious scenario.
Comparing outputs from different tools without checking that the inputs match.
Treating the result as a final quote instead of a planning estimate.
Rounding inputs too aggressively.

What to do next

Try at least one more scenario so you can compare a realistic range.
Use the related calculators below to cross-check the decision from another angle.
Write down the key outputs from your best scenarios before you decide.
If the result surprises you, change one input at a time to isolate the driver.

Questions people ask

In England, eligible working parents can get 30 funded hours a week over 38 weeks from the term after their child turns 9 months (from September 2025). All 3 and 4 year olds get 15 universal hours a week in term time. Use the Free Childcare Hours calculator to apply 38-week or stretched 52-week hours before costing paid sessions here.