Childcare Costs Calculator

The short answer

• Working parents in England get 30 funded hours a week, for 38 weeks a year, from the term after a child turns 9 months until they start school.
• Every 3 and 4-year-old gets 15 hours, whether or not the parents work.
• Tax-Free Childcare adds £2 for every £8 you pay, up to £2,000 a child a year.
• Universal Credit pays back 85% of costs, up to £1,071.09 a month for one child or £1,836.16 for two or more.
• You can have funded hours with either, but not Tax-Free Childcare and Universal Credit together.

Three kinds of help

Funded hours in England

Since September 2025, working parents in England can get 30 funded hours a week for children from 9 months old until they start reception. Every 3 and 4-year-old also gets 15 universal hours, and some 2-year-olds get 15 hours if the family gets certain benefits or is on a low income.

To count as working, each parent must expect to earn at least 16 hours a week at their minimum wage over the next three months (about £203 a week at the National Living Wage of £12.71), and neither can have adjusted net income over £100,000. You reconfirm every three months.

Tax-Free Childcare

You open an online childcare account and pay in. For every £8 you pay, the government adds £2, up to £500 every three months for each child (£2,000 a year), or £1,000 a quarter (£4,000 a year) for a disabled child. You then pay your registered provider from the account. To get the full £2,000 you need to spend £8,000 a year on a child’s childcare, after funded hours.

It is for children up to 11, or 16 if disabled, and has the same work and £100,000 income tests as the 30 hours. You cannot get it while you or your partner claim Universal Credit.

Universal Credit childcare

If you get Universal Credit and you work (any amount, and both partners in a couple), Universal Credit includes 85% of your childcare costs, up to £1,071.09 a month for one child or £1,836.16 for two or more in 2026/27. You report what you paid each month with proof, and the DWP can now pay upfront costs such as a deposit or the first month’s fees before you start work.

Because Universal Credit is tapered as your earnings rise, the childcare element can be paid even on fairly good earnings when childcare costs are high. Try the Universal Credit calculator with your costs included.

Tax-Free Childcare or Universal Credit?

If you are entitled to Universal Credit, its 85% usually beats Tax-Free Childcare’s 20% by a wide margin. But if your income is close to the point where Universal Credit stops, you might get only a small award, and Tax-Free Childcare could be worth more. Work out both: the calculator shows each side by side. You can switch from one to the other, but you must close your Tax-Free Childcare account when you claim Universal Credit.

Worked examples

On Universal Credit, the same family would get £4,641 back and pay £819 a year.

With Universal Credit instead of Tax-Free Childcare, 85% of £11,985 is £10,187, leaving £1,798 to pay.

Before 9 months

There are no funded hours for babies under 9 months, so this is often the most expensive time. Full-time nursery for a baby at £8.50 an hour for 50 hours a week over 51 weeks costs £21,675. Tax-Free Childcare takes off at most £2,000, leaving £19,675; Universal Credit can pay up to £12,853 a year for one child. Many parents time the return to work with the funded hours, or use shared parental leave to cover the gap.

School-age children

Once a child is in school there are no funded hours, but breakfast clubs, after-school clubs, holiday clubs and childminders can all be paid through Tax-Free Childcare (until 11) or Universal Credit (until 16), as long as they are registered. Free breakfast clubs are being rolled out in state primary schools in England from 2025, which can cut the cost of early starts.

Extras and hidden costs

Funded hours are meant to be free, but providers can charge for meals, nappies, trips and activities, as long as these are voluntary or you can bring your own. Ask for a written breakdown. Other costs to plan for:

• registration fees and deposits, often a month’s fees;
• fees for bank holidays and closure days in some settings;
• late collection charges;
• the summer holidays, when term-time funding stops.

Workplace schemes and older vouchers

Employer childcare vouchers closed to new joiners in October 2018. If you still get them, you can keep them as long as you stay with the same employer, but you cannot have them alongside Tax-Free Childcare. For basic-rate taxpayers with one child, Tax-Free Childcare is usually worth more; compare before you switch, as you cannot go back. Some employers also run workplace nurseries, which can be a tax-free benefit.

Scotland, Wales and Northern Ireland

Tax-Free Childcare and Universal Credit are UK-wide, but funded hours differ. Scotland gives 1,140 funded hours a year to all 3 and 4-year-olds and eligible 2-year-olds. Wales offers funded hours to 3 and 4-year-olds of working parents through the Childcare Offer, and Flying Start in some areas. Northern Ireland is introducing its own childcare subsidy. The calculator uses England’s rules.

When to apply

1. By 31 AugustChild starts in September

   Get your funded hours code and give it to your provider.

2. By 31 DecemberChild starts in January

   Codes must be issued before the term starts.

3. By 31 MarchChild starts in April

   Apply up to 16 weeks before your child turns 9 months.

4. Every 3 monthsReconfirm

   For working-parent hours and Tax-Free Childcare.

Nurseries, childminders and nannies

The kind of care you choose affects both the price and the help you can get. Funded hours, Tax-Free Childcare and Universal Credit childcare all need a registered provider.

• Day nurseries are usually open 8am to 6pm all year and often the most expensive per hour for under-2s, because staff ratios are higher for babies.
• Childminders look after a small group in their own home and are often more flexible on hours. Registered childminders can offer funded hours.
• Pre-schools and school nurseries often run in term time only and may offer funded hours with few or no extra charges.
• Nannies work in your home. They can be paid through Tax-Free Childcare or Universal Credit only if they are registered with Ofsted (on the voluntary register), and you become their employer.

Separated parents and couples

The work test for funded hours and Tax-Free Childcare applies to every parent in the household. If you live with a partner, both of you must meet it, unless one is unable to work because of illness, disability or caring and gets certain benefits. Separated parents each apply for their own childcare account, based on their own household, and can both pay into a child’s account up to the same overall limit.

For Universal Credit, a couple must both be in work to get the childcare element, unless one partner cannot work for one of the same reasons.

Ways to bring the bill down

• Ask how your provider charges for funded hours: stretched over the year or term time only, and what the extras cost.
• Compare a mix of care, such as a childminder for early starts and a pre-school for funded hours.
• Use holiday clubs run by schools or councils, which are often cheaper than private ones, and check the Holiday Activities and Food programme for children on free school meals.
• If you work for a large employer, ask about workplace nurseries or flexible hours that cut the hours of care you need.

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