For most parents, going back to work after having a baby involves a calculation that nobody really helps you do properly. Gross salary minus tax minus childcare — does anything actually come out the other side? The answer is almost always yes, and usually by more than you think, once you factor in the support you're entitled to.
Is it worth going back to work? It's framed as a financial question but it rarely gets a financial answer. Friends say "you'll basically be working to pay the nursery." Articles list childcare costs without mentioning the support available. The result is that a lot of parents — particularly mothers — either delay returning longer than they need to, reduce their hours more than they want to, or go back to work with no idea they're leaving thousands of pounds on the table.
This guide works through the actual numbers. What childcare costs. What support exists. How to calculate what you'll actually take home. And the things that change the calculation significantly that most parents don't know about.
Nursery costs vary enormously by region. As a rough guide for a full-time place (50 hours/week):
London: £1,800–£2,500/month. South East: £1,200–£1,800/month. Midlands and North: £800–£1,200/month. Rural areas: £700–£1,000/month.
These are gross costs before any government support. The number that matters for your decision is what you pay after entitlements — which for most working parents is significantly lower.
This is where most parents undersell their position. The childcare support system has three main layers that can work together:
If your child is aged 9 months or over and both parents are working, you're entitled to 30 hours of government-funded childcare per week for 38 weeks of the year. At London nursery rates of £14/hr, that's worth £7,980 per year. In the Midlands at £8/hr, it's £4,560 per year.
These hours cover term time. Most nurseries either spread them over 52 weeks (giving you roughly 22 hours/week year-round) or run them at full 30 hours for 38 weeks with you paying full cost in the holidays.
If your child is under 9 months when you return, the free hours don't apply yet — but they kick in from the term after they turn 9 months. Apply early, as nursery places fill up fast.
On top of free hours, Tax-Free Childcare gives you 20p for every 80p you pay into your childcare account — up to £2,000 per year per child. This applies to any paid childcare costs after your free hours are used. If you're paying for 20 extra hours a week on top of free hours, that's meaningful money back every quarter.
You can't use Tax-Free Childcare if you're on Universal Credit — but if you're not on UC and both parents work and earn under £100,000, you almost certainly qualify.
If you are on Universal Credit, you can claim back 85% of registered childcare costs — up to £1,071.09/month for one child. This is often worth significantly more than Tax-Free Childcare for families on lower incomes with high childcare costs. The two cannot be combined.
Maternity leave counts as working. If you're still on maternity leave when you start arranging childcare, you still qualify for the 30 free hours and Tax-Free Childcare as long as you intend to return to work. You can apply from when your baby is 23 weeks old — don't wait until you're back at your desk.
Your salary before tax. If you're returning part-time, use your part-time salary.
Use HMRC's tax calculator at gov.uk/estimate-income-tax. Don't forget student loan repayments if applicable.
Gross nursery cost minus free hours value minus Tax-Free Childcare top-up. Our tool calculates this for your specific situation.
What remains is your net financial gain from working. For most parents earning above minimum wage this is positive — often substantially.
Career progression, pension contributions, professional identity, and the long-term salary trajectory from staying in work all matter and don't show up in monthly take-home calculations.
Many parents assume part-time is financially safer. It's often not. The 30 free hours are fixed regardless of how many days you work — so a parent working 3 days gets the same free hours as one working 5. The childcare cost per working day is therefore higher part-time, and the salary gain lower. This doesn't mean part-time is wrong — for many families the balance of work and family time is the right one — but going part-time to save money sometimes achieves the opposite.
3 days per week
Part-time return
Lower salary, same free hours entitlement, higher childcare cost per working day, less career progression.
5 days per week
Full-time return
Higher salary, same free hours entitlement spread further, lower childcare cost as proportion of earnings, better pension and career position.
Staying out of work to avoid childcare costs has a long-term cost that doesn't show up in monthly budgets. Every year out of work is a year without pension contributions, without salary progression, and potentially without National Insurance credits. A parent who takes an extra year out to avoid £800/month in childcare costs might sacrifice £3,000–£5,000 in future pension income over their lifetime.
Child Benefit also matters here. The parent who isn't working should be claiming Child Benefit — it provides National Insurance credits that protect State Pension entitlement. If neither parent is claiming because the higher earner is over £80,000, the non-working parent is missing out on NI credits every year. Claim the benefit and opt out of payments — you keep the credits without the tax charge.
At least 8 weeks before your return date, apply for the 30 free hours through HMRC's Childcare Service. You need a code to give your nursery and they need it before they can hold a funded place. Set up a Tax-Free Childcare account at the same time if you're eligible — it takes 20 minutes and the government tops up your account from day one.
If you're returning to a salary between £60,000 and £100,000 — or your partner earns in that range — check the Child Benefit position and whether pension contributions would change the calculation for you. The numbers can be surprisingly significant.
Book your nursery place early. In most areas, popular nurseries have waiting lists of 6–12 months for younger babies. If you know your return date, start looking at nurseries as soon as possible — ideally before the baby arrives. The free hours place needs to be confirmed with your nursery before your HMRC code is issued.
Our tool calculates your free childcare hours, Tax-Free Childcare, Child Benefit and more — based on your salary, your child's age, and your working situation.
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