How Much Could You Save on Nursery Fees in 2026?

Nursery fees are one of the biggest costs many working families face. As 2026 approaches, parents are understandably looking for ways to ease the pressure without cutting back on the quality of care their children receive. The good news is that there is a legitimate, HMRC-recognised way to save on nursery fees that many parents have never heard of: the workplace nursery benefit.

In this article we explain how the benefit works, who it suits, and roughly how much you could keep in your pocket. We also point you towards a quick calculator so you can see your own estimate in a couple of minutes.

How the workplace nursery benefit works

The workplace nursery benefit lets you pay your nursery fees from your salary before income tax and National Insurance are taken off. This is set out under Section 318 of the Income Tax (Earnings and Pensions) Act 2003. Because the money comes out of your gross pay rather than your take-home pay, you are not taxed on the portion you spend on childcare.

The size of the saving depends on the rate of tax you pay. Basic-rate taxpayers typically save around 28%, while higher-rate taxpayers can save up to 47%. These figures are estimates, and your own saving will depend on your personal circumstances, your salary, and your nursery's fees. The principle stays the same though: less of your income goes to tax, and more of it goes towards your child's care.

What could this mean for your 2026 budget?

For families paying a few hundred pounds a month, the savings can add up quickly across a year. If your nursery costs run into the thousands annually, the difference made by paying from pre-tax salary can be significant. Rather than guess, it is worth running your own numbers so you can plan your 2026 budget with confidence. See

Once you have your estimate, you can weigh it against your current arrangement and decide what works best for your family. Remember that the figure is a guide, not a guarantee, and it is always sensible to consider your own situation.

Things to keep in mind

It is important to know that the workplace nursery benefit and Tax-Free Childcare are mutually exclusive. You cannot use both at the same time, so it pays to compare the two and choose the option that gives your family the better outcome. For many families, particularly higher-rate taxpayers with larger nursery bills, the workplace nursery benefit comes out ahead, but this is not true for everyone.

Kinsail is the UK's only zero-fee workplace nursery benefit provider. We charge parents no fee at all, so the savings you see are the savings you keep.

Getting started in 2026

If you would like to save on nursery fees in the year ahead, the first step is to use the calculator above to see your estimated saving. From there, you can talk to your employer about offering the benefit, or get in touch with us to find out how to set things up. With a little planning now, you could enter 2026 keeping much more of your hard-earned salary, while your child carries on at the nursery you trust.