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Tax Free Childcare

Using this tax free childcare calculator, you can work out if you are eligible for tax free childcare. Once you have done that, be sure to check our 15/30 hours free childcare calculator as families that are eligible for tax free childcare, are likely eligible for free/funded hours too (depending on the age of their child). In combination, tax free childcare and funded hours can save you £1,000s per year.

For the higher earners, go to our explainer page on adjusted net income to help you work out if one or both of you had an adjusted net income of over £100k per year.

Once you've registered for your account, it can be difficult to know how much to actually top us, so use our top up calculator to help you optimise this!

More Information

It isn't truly tax free childcare!

The tax part of tax free childcare assumes that you are a basic rate tax payer, and also ignores national insurance, or student loans (if you have them). For people that are higher rate tax payers or have student loans to pay, this won't feel like tax free childcare. It's best to ignore the name and focus on the fact that the govenment wants to pay 20% of your childcare bill (up to a limit, see the calculator above).

It isn't compatible with all other schemes

Tax free childcare eligibility normally means you are also eligible for 15/30 hours of funded childcare, depending on the age of your child. If you are claiming Universal Credit or Tax Credits, then the childcare support you can get is likely better than tax free childcare, and you can't claim both at once. Increasingly few parents will have access to childcare vouchers which closed to new applicants in 2018, but if you think you might be better off with tax free childcare use our childcare vouchers calculator to compare.

It is possible to use it for a wide range of childcare

If you have pre-school aged children, then tax free childcare can help significantly with your bill. However, it is still available for school aged children, whether it's holiday clubs, wrap around childcare or breakfast/after school clubs. The childcare you are using simply has to be registered with the scheme; so ensure you ask your provider!

You are limited to a certain amount each quarter

There is a £500 top up cap (non-transferable)* each quarter for non-disabled children (£1,000 for disabled children) so if your bills will be seasonal, it may be worth topping up more in months when you use less childcare to get maximal savings for the months where you need more. Since the tax free childcare amount has been fixed since it was introduced in Autumn 2015, inflation means that more and more childcare bills exceed the monthly amount that would fully optimise the limits; £833.33 per month. If your bills are higher than this, using this calculator may help you to ensure you receive your full £500 per three months.

*If you don't use your full £500 in a three month entitlement period, it doesn't carry over to the next.

The government top up isn't instant!

Ensure you don't wait until the day your invoice is due to top up your account. It normally takes a few hours, or even up to 24 hours for the government top up to show up. If you've used our top-up calculator to work out exactly how much you need to top up, you can always schedule your payment to your provider for the following day knowing that the government top up will be there in time.