Working parents in England can get 30 hours a week of funded childcare for 38 weeks a year from the time a child is nine months old until they start school, and Tax-Free Childcare adds £2 for every £8 paid into a childcare account, up to £2,000 a year per child or £4,000 for a disabled child. Both schemes use the same test: each parent must expect to earn at least the minimum wage for 16 hours a week, which is £2,643.68 over three months for anyone aged 21 or over, and neither can have adjusted net income above £100,000. Together they can cut a full-time nursery bill by more than half.
The two schemes
| Funded hours for working parents | Tax-Free Childcare | |
|---|---|---|
| Child’s age | 9 months until starting school | 11 or under, 16 or under if disabled |
| What you get | 30 hours a week for 38 weeks, or fewer hours over more weeks | 20% of what you pay, up to £500 a quarter per child, £1,000 if disabled |
| Annual value | 1,140 funded hours a year | up to £2,000 a child, £4,000 if disabled |
| Earnings test | each parent at least 16 hours a week at minimum wage, under £100,000 adjusted net income | same |
| Where | England only | England, Scotland, Wales and Northern Ireland |
| Reconfirm | every three months | every three months |
The 30 hours are for providers that accept the funding, and many charge for meals, nappies or extra hours outside the funded pattern; those charges can be paid through a Tax-Free Childcare account and attract the 20% top-up. Every three and four year old in England also receives a universal 15 hours a week for 38 weeks regardless of parents’ work, and some two year olds in families on benefits receive 15 hours through a separate scheme.
The earnings test
| Parent’s age | Minimum expected earnings over the next three months |
|---|---|
| 21 and over | £2,643.68 |
| 18 to 20 | £2,256.80 |
| Under 18 or an apprentice | £1,664.00 |
The figures are 16 hours a week at the relevant minimum wage rate, and the test looks forward at expected earnings rather than back at payslips, so a parent starting a job qualifies at once. Both parents in a couple must pass, unless one is on certain benefits or unable to work, and a parent who has been self-employed for under twelve months is exempt from the earnings floor. Income at the top end is tested per parent on adjusted net income, which is total taxable income after pension contributions and Gift Aid: a couple each earning £95,000 qualifies while a household with one earner on £101,000 does not, although a pension contribution that brings the figure below £100,000 restores the entitlement. Our guide to the £100,000 threshold explains the adjustment.
What it saves
| Childcare used | Full cost a year | Funded hours saving | Tax-Free Childcare top-up | What you pay a year | A month |
|---|---|---|---|---|---|
| 40 hours a week at £7 an hour, child under 9 months | £14,560 | £0 | £2,000, capped | £12,560 | £1,047 |
| 40 hours at £7, with 15 funded hours | £14,560 | £3,990 | £2,000, capped | £8,570 | £714 |
| 40 hours at £7, with 30 funded hours | £14,560 | £7,980 | £1,316 | £5,264 | £439 |
| 25 hours at £6.50, no funded hours | £8,450 | £0 | £1,690 | £6,760 | £563 |
| 50 hours at £9, no funded hours | £23,400 | £0 | £2,000, capped | £21,400 | £1,783 |
| 50 hours at £9, disabled child | £23,400 | £0 | £4,000, capped | £19,400 | £1,617 |
| 50 hours at £9, with 30 funded hours | £23,400 | £10,260 | £2,000, capped | £11,140 | £928 |
The funded hours apply for 38 weeks, so a child in nursery for 52 weeks a year still pays full price for 14 of them unless the provider stretches the entitlement to fewer hours over more weeks. The cap on Tax-Free Childcare bites at £10,000 of paid costs a year, £833 a month, which many full-time nursery places in cities exceed. The Tax-Free Childcare calculator runs your own hours, rate and funded entitlement, and the cost of a child calculator sets childcare against the other costs of the early years.
Tax-Free Childcare or Universal Credit
Parents on Universal Credit cannot use Tax-Free Childcare; the Universal Credit childcare element instead repays 85% of costs up to a monthly cap, which is usually worth more to lower earners. Opening a Tax-Free Childcare account ends a Universal Credit claim, so families near the boundary should compare before applying. Childcare vouchers from an employer, closed to new entrants since 2018, also cannot be combined with Tax-Free Childcare; existing voucher users can switch but not switch back. Our Universal Credit rates guide covers the childcare element.
How the funded hours start
The funded hours begin in the term after the child reaches the qualifying age, with terms starting on 1 January, 1 April and 1 September. A code from the government’s childcare service must be obtained before the term starts and reconfirmed every three months; applications open when the child is 23 weeks old. Missing the deadline means waiting until the following term, which for a child born in early September can mean four months of full fees.
Common questions
How many free childcare hours can working parents get? 30 hours a week for 38 weeks a year for children from 9 months until they start school in England, provided both parents meet the earnings test. Some providers stretch the hours over more weeks.
How much is Tax-Free Childcare worth? The government adds £2 for every £8 paid in, up to £500 every three months per child, which is £2,000 a year, or £1,000 a quarter and £4,000 a year for a disabled child.
What do I have to earn? At least 16 hours a week at the minimum wage on average over the next three months: £2,643.68 for a parent aged 21 or over. Each parent’s adjusted net income must be under £100,000.
Can I get 30 hours and Tax-Free Childcare together? Yes. The funded hours reduce the bill and Tax-Free Childcare tops up what remains, including charges for extras.
Can I use Tax-Free Childcare on Universal Credit? No. Applying for Tax-Free Childcare ends the Universal Credit claim. The Universal Credit childcare element repays 85% of costs and is usually better for lower earners.
When do the funded hours start? The term after the child reaches the qualifying age, starting 1 January, 1 April or 1 September, with a valid code obtained before the term begins.
Information, not financial advice. Entitlements and thresholds are the published 2026/27 rules on gov.uk: free childcare if you are working and gov.uk: Tax-Free Childcare; worked figures are from the site’s calculator using illustrative hourly rates. Provider charges and stretched offers vary, so check with your setting before acting on them.