A £99,000 salary does not automatically put you below the childcare income limit. A bonus, taxable benefits, interest or other taxable income can change the answer. The number to check is expected adjusted net income for the tax year, for each parent separately.
This guide focuses on England's Free Childcare for Working Parents. Tax-Free Childcare is a separate scheme. Other UK nations have different funded-childcare provision.
What is the £100k childcare limit?
GOV.UK says you will not qualify for England's working-parent scheme if you or your partner expects adjusted net income over £100,000 in the current tax year. It is not a combined household-income cap. There are also conditions about working, minimum earnings, your child's age and immigration status.
An income figure below the cap is therefore necessary for many families, but it does not prove eligibility by itself.
Salary is not adjusted net income
HMRC defines adjusted net income as total taxable income before Personal Allowances, less certain tax reliefs. Taxable employment income is part of it. So can be savings interest, dividends, rental income and other taxable income.
Certain pension contributions and Gift Aid donations can reduce the figure. The treatment depends on how a contribution is made. A relief-at-source pension contribution, for example, is deducted at its grossed-up amount. Do not deduct the same contribution twice or assume every payroll pension arrangement works in the same way.
Two examples without a promised saving
Example A: a parent has £99,000 taxable employment income and £2,000 other taxable income. With no relevant deductions, adjusted net income is £101,000. A salary below £100,000 has not kept the parent below the eligibility cap.
Example B: a parent has £105,000 taxable income and makes a £4,000 net contribution to a relief-at-source pension. With £1,000 basic-rate tax relief, the gross contribution is £5,000. If that is the only relevant adjustment, adjusted net income is £100,000.
These are simplified illustrations, not recommendations to make a payment. Check the current eligibility rules, timing, contribution method, pension allowances and your ability to lock money away. Both parents and all other conditions still need checking.
The threshold rule says over £100,000. A calculation landing exactly on the limit leaves no margin for income you have missed or underestimated.
Which childcare support is affected?
For eligible working parents in England, children aged nine months to four years can receive 30 funded hours a week for 38 weeks of the year. Age, term-start dates and other scheme conditions matter.
Tax-Free Childcare adds £2 for every £8 you pay in, up to the scheme's quarterly cap. It has its own eligibility conditions, including the £100,000 expected adjusted-net-income limit.
Universal 15 hours for three- and four-year-olds in England is different from the working-parent entitlement. Losing eligibility for the working-parent scheme does not mean every family loses every form of childcare support.
The financial effect is not a fixed £10,000. It depends on your child's age, childcare use, provider and the support your family would otherwise receive.
Check before a bonus or pay rise
- Estimate each parent's taxable income for the current tax year, including expected bonuses and other income.
- Identify the adjustments that apply, including the correct treatment of pension contributions and Gift Aid.
- Check both the upper income limit and the separate working/minimum-earnings conditions.
- Check your child's age, relevant term dates and your childcare account's reconfirmation date.
- If a pension payment is being considered, check allowances and access restrictions first. Take advice if your circumstances are complicated.
Use GOV.UK and HMRC as the rules reference. Calculators are illustrations, not eligibility decisions.
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General information, not personal financial or tax advice. Rules checked on 30 September 2026; use the official sources for the current position.