# How does Tax-Free Childcare work? | Clever Mum > For every £8 you pay into a Tax-Free Childcare account, the government adds £2 — up to £2,000 free per child per year (£4,000 if your child is disabled). Both * [ Home ](/) * › [ Mum Answers ](/answers) * › How does Tax-Free Childcare work? Money & Rights # How does Tax-Free Childcare work? Quick answer — How does Tax-Free Childcare work? For every £8 you pay into a Tax-Free Childcare account, the government adds £2 — up to £2,000 free per child per year (£4,000 if your child is disabled). Both parents generally need to be working and each earning under £100,000 a year. It covers registered nurseries, childminders and holiday clubs, but you can't use it alongside Universal Credit's childcare element or old-style childcare vouchers — check which pays you more before switching. ## The mechanics You open a Tax-Free Childcare account via gov.uk, pay money in, and the government tops it up by 25% (£2 for every £8, capped at £500 every 3 months per child, or £1,000 if disabled — totalling up to £2,000 or £4,000 a year). The account pays registered childcare providers directly. ## Eligibility, briefly Broadly: both parents (or the sole parent in a single-parent household) need to be working and expecting to earn at least the equivalent of 16 hours a week at National Minimum Wage, and neither can be earning over £100,000 adjusted net income. Self-employed parents, including those in their first year of trading, have specific rules — check gov.uk for the detail relevant to your situation. ## The mutual-exclusivity trap You cannot use Tax-Free Childcare **at the same time** as the Universal Credit childcare costs element or (now-closed to new joiners) employer childcare vouchers — you choose one route. For many families receiving Universal Credit, the UC childcare element (reimbursing up to 85% of costs) is worth significantly more than the Tax-Free Childcare top-up, so it's genuinely worth comparing both before applying, not just taking whichever you hear about first. Our [childcare funding tools hub](/family/childcare-funding-uk-tools-15-30-hours) covers how this stacks with funded hours. **Go deeper:** [UK childcare funding tools](/family/childcare-funding-uk-tools-15-30-hours/) ## More Money & Rights questions * [Is Child Benefit worth claiming if I earn over the threshold?](/answers/is-child-benefit-worth-claiming/) * [How much paternity leave do partners get in the UK?](/answers/partner-paternity-leave-uk/) * [How do free childcare hours work in England?](/answers/free-childcare-hours-uk/) * [How do I reconfirm free childcare hours every 3 months?](/answers/childcare-reconfirm-checklist-uk/) * [What is the Sure Start Maternity Grant?](/answers/sure-start-maternity-grant/) [Browse every question we answer →](/answers/) Health answers describe NHS guidance and are not medical advice — for anything urgent, call 111 (or 999 in an emergency). Spotted something out of date? Email [editors@clevermum.co.uk](mailto:editors@clevermum.co.uk).