Childcare Costs Calculator

Universal Credit pays back 85% of registered childcare, up to a monthly cap, with no minimum number of hours you have to work. That is generous on paper and awkward in practice, because it is reimbursement rather than funding.

You pay the provider first, report the cost in the right assessment period, and receive the money in that period's payment, up to five weeks later. This calculator shows what comes back, what you have to find yourself, and how much of your bill sits above the cap and will never be reimbursed.

Because the cap sits on the reimbursement, not on the bill. Universal Credit pays 85% of registered childcare, so the £1,071.09 cap for one child is reached on a monthly bill of £1,260.11, and the £1,836.16 cap for two or more is reached at £2,160.19. Below those points an extra pound of childcare costs you 15p net. Above them it costs you the whole pound, because nothing further comes back. That is the most useful figure on this page when you are choosing between providers, or between four days a week and five. Notice too that the cap for two or more children is not double the cap for one. It falls £306.02 a month short of it, so the second child brings noticeably less headroom than the first did.

Very possibly not, and the error runs in the direction that costs you money. The caps have been uprated in each of the last 4 rate years, and they also rose part way through the year on 28 June 2023, which is why the 2023/24 step is the large one. A page written for 2023/24 quotes £950.92 for one child against the 2026/27 figure of £1,071.09, a difference of £120.17 a month or £1,442.04 across a year. For two or more children the same comparison is £1,630.15 against £1,836.16. The caps apply per assessment period, so what governs your claim is the cap in force for the period the cost falls in, not the one that applied when you signed the contract with the provider.

Later than the bill, and how much later depends on where in your assessment period you pay. Report the cost as soon as you have paid it: it has to be reported within the assessment period you paid it in, or the one immediately after, and later than that you may not get it back at all. The reimbursement is then added to that period's award, and the award is paid 7 days after the period ends. So an invoice paid on the first day of a period waits close to a full month plus that week, while the same invoice paid on the last day waits about a week. The amount does not change, only the wait. If you can choose your billing date, one late in your assessment period returns the money to you faster, so it is worth knowing your period dates before you set up the direct debit.

Yes, and this is where the headline percentage and your actual number part company. The childcare element is added to your maximum Universal Credit alongside the standard allowance and the child element, and the taper is applied to the whole award. Earnings above your work allowance therefore reduce the childcare money at the same 55p in the pound as everything else, and a household earning enough for the award to reach nil gets none of it back even though the bill is entirely real. The flip side is worth knowing. Because the element raises your maximum Universal Credit, it also raises the earnings at which the award runs out, so claiming childcare keeps you on Universal Credit further up the pay scale. And everyone eligible for it is responsible for a child, which means everyone eligible for it has a work allowance.