Tax-Free Childcare calculator
Tax-Free Childcare pays 20% of your childcare bill: for every £8 you pay into your childcare account the government adds £2. The top-up is capped at £500 every 3 months per child (£2,000 a year), or £1,000 (£4,000 a year) for a disabled child, so it covers bills up to £2,500 a quarter in full.
Example: a £1,200 monthly bill
£500 every 3 months
You pay £3,100 and the government adds £500 on a £3,600 quarterly bill.
Your bill is over £2,500 a quarter, so the top-up is capped at £500.
The working
- Bill for 3 months
- £1,200 × 3 = £3,600
- 20% top-up
- £3,600 × 20% = £720
- Capped at
- £500 every 3 months
- Government adds
- £500 every 3 months
- You pay in
- £3,600 − £500 = £3,100
- A month
- you £1,033.33, government £166.67
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Next steps
Assumptions
- One child. Each child has their own cap; add them up for siblings.
- The bill is what you pay after any funded hours. Tax-Free Childcare can also pay for extras the nursery supplies, such as meals and nappies.
- You must reconfirm your details every 3 months, and cannot claim while getting Universal Credit or childcare vouchers.
- Monthly figures are a third of the quarter, rounded to the penny.
Questions parents ask
How much can I get from Tax-Free Childcare?
20% of your bill, up to £500 every 3 months per child (£2,000 a year), or £1,000 every 3 months (£4,000 a year) if your child is disabled.
Can I use Tax-Free Childcare with 30 funded hours?
Yes. Use it for the hours you pay for on top of the funded hours and for extras the nursery provides.
Does the cap reset every quarter?
Yes, it works in 3-month entitlement periods. Unused top-up in one period does not roll over to the next, although money you have paid in stays in the account.
Who cannot get Tax-Free Childcare?
Families where either parent expects adjusted net income over £100,000, families claiming Universal Credit or childcare vouchers, and parents not working or earning below the minimum (with some exceptions for carers and people on certain benefits).
Sources
- Tax-Free Childcare checked 11 November 2026
By The Toddly editorial team · Rules checked 11 November 2026