Tax-Free Childcare & free hours calculator
Tax-Free Childcare adds 20% on top of what a parent pays into a childcare account, up to £2,000 a child a year (£4,000 if disabled), under gov.uk's Tax-Free Childcare rules. This calculator estimates the monthly bill once the funded free hours and the top-up are both applied.
You have reached the £2,000 a year top-up cap, so extra spending above that gets no 20% boost.
How do free hours and Tax-Free Childcare fit together?
Childcare help in England comes from two schemes that most parents use at once. The funded hours cut the number of hours billed, but only during the 38 term-time weeks, under gov.uk's free childcare entitlement rules. Tax-Free Childcare then takes 20% off whatever is still paid, which covers the extra hours, plus meals and top-up charges that free hours do not cover, under gov.uk's Tax-Free Childcare page. This tool applies the free hours first, then the top-up on the remainder, because that is the order the money actually works in.
The top-up has a ceiling. The government adds at most £2,000 a child each year, rising to £4,000 if the child is disabled. Once that has been reached, further spending gets no boost, so very large bills see a smaller percentage of help overall.
Does this apply outside England?
Tax-Free Childcare is a United Kingdom wide scheme, but the funded hours are not. The free hours modelled here are the England entitlement. mygov.scot states plainly that "There are different childcare schemes in England, Wales and Northern Ireland", and each nation runs its own.
Scotland has Funded Early Learning and Childcare, offered through local councils, which also work with private nurseries and childminders. Wales has the Childcare Offer for Wales, run by the Welsh Government with local authorities. Northern Ireland has the Pre-School Education Programme, run by the Education Authority. The eligibility rules and the way each is structured differ from England, so a parent outside England should check their own nation's scheme rather than rely on the free hours figure here.
What would a family pay on an example bill?
Take 40 hours a week at £7 an hour with the full 30 free hours. Over the year that is 2,080 paid hours, and the free hours cover 1,140 of them, leaving 940 chargeable hours worth £6,580. The 20% top-up on that is £1,316, well under the £2,000 cap. The parent's own share is an estimated £5,264 a year, about £439 a month, against a headline bill of £1,213. In the holidays the free hours stop, so those weeks cost more unless the nursery stretches the entitlement across the year.
Common questions
How does the 20% Tax-Free Childcare top-up work?
For every £8 you pay into your childcare account the government adds £2, which is a 20% top-up on what you spend. The most it will add is £2,000 a child each year, or £4,000 if the child is disabled. To get the full £2,000 you would pay in £8,000 across the year.
Can I use Tax-Free Childcare and the free hours together?
Yes. The free hours cover part of the nursery week, and Tax-Free Childcare gives you 20% off whatever you still pay for the extra hours, meals or top-up fees. This tool applies the free hours first, then the 20% top-up on the remainder.
Why is my nursery bill higher in the school holidays?
Funded free hours are term-time only, which is 38 weeks a year. Some nurseries let you stretch the same total hours across all 52 weeks at fewer hours a week. If you use full-time care all year, the holiday weeks have no free hours and cost more.
When can my child get 30 free hours?
From September 2025 the expanded entitlement reaches children from 9 months old, as long as the eligibility rules on earnings are met. Younger babies and higher earners may get fewer hours or none, so check your entitlement on gov.uk before you rely on it.
Does Tax-Free Childcare affect Universal Credit?
You cannot claim Tax-Free Childcare and the Universal Credit childcare element at the same time. Universal Credit can refund a larger share for lower earners, so it is worth comparing both rather than assuming the top-up is best.
How do free hours and Tax-Free Childcare fit together?
Free hours reduce the hours billed during the 38 term-time weeks, and Tax-Free Childcare then adds a 20% top-up on whatever is still paid, up to £2,000 a child a year. This calculator applies the free hours first and the top-up on the remainder, which is the order gov.uk describes the schemes working in.
What would a family pay on an example bill?
At 40 hours a week, £7 an hour, with 30 free hours used, the chargeable hours after free hours come to about £6,580 a year. The 20% top-up brings roughly £1,316 back, leaving an estimated cost of about £439 a month against a headline bill of £1,213.
Sources & Rate Verification
Rates verified against official statutory guidance on 6 September 2026.