Childcare Costs & Free Hours Calculator (UK 2024)
Calculate total childcare costs, free hours entitlement, Tax-Free Childcare savings, and whether returning to work is financially worthwhile.
Childcare Costs Guide 2024
Free Childcare Hours 2026/27 England
Significant expansion of free childcare in England from April 2024: Under 2 years (from September 2024): 15 hours/week for working parents. 2-year-olds (from April 2024): 15 hours/week for working parents. 3 and 4 year olds: 15 hours/week (universal — all families). OR 30 hours/week for working parents. Eligibility for 30 hours (3-4 yr olds) and expanded 15 hours: both parents (or single parent) working and earning at least the equivalent of 16 hours at National Living Wage (~£9,518/year). Neith
Tax-Free Childcare
Tax-Free Childcare (TFC): government adds 20p for every 80p you pay. Maximum government contribution: £500 per quarter per child (£2,000/year). For disabled children: £1,000 per quarter (£4,000/year). Total maximum: £10,000/year into account (government tops up to £12,500). How it works: open a TFC account on childcarechoices.gov.uk. Pay into the account — government adds 20%. Pay your childcare provider from the account. Eligibility: same as 30 hours (both parents working, each earning 16+ hour
Universal Credit Childcare
If you receive Universal Credit: childcare costs element covers up to 85% of eligible childcare costs. Maximum: £950.92/month for one child, £1,630.15/month for two or more children (2026/27 rates). Must be working to qualify. Claim via your Universal Credit account. Unlike TFC, Universal Credit childcare support is not capped by earnings — it scales with actual costs up to the maximum. Important: claim Universal Credit childcare immediately once you start using childcare — it can only be backda
The Return-to-Work Calculation
The key question: does returning to work pay after childcare costs? Consider: gross salary if returning. Less: income tax and NI on increased earnings. Less: net childcare cost (gross minus free hours, TFC, UC childcare, employer vouchers). Add: salary sacrifice options (some employers offer childcare salary sacrifice for nannies — saves NI). The marginal calculation: if each extra £1 earned nets only 20-30p after tax and childcare, many parents find full-time return does not pay — part-time or
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