Fostering Allowances
Understand what fostering allowances could mean in real life.
Fostering allowances are one of the things we’re asked about most. Fostering can change a child’s life, but it should also work for your household. That’s why we’re committed to transparency about the practical financial detail: how much do foster parents typically receive? What do foster care payments cover? How does tax relief work in practice, and how do allowances compare with PAYE take-home pay?
Last updated: 23 September 2026 · Figures based on Compass Fostering’s 2026/27 fee schedule and current HMRC/GOV.UK guidance.
How much do foster parents get paid?
No single fostering allowance exists. The amount you receive depends on various factors including how many children are currently in your care, the needs of the children individually, the type of fostering you are able to offer as well as your own experience and expertise. With Compass, our foster parents typically receive between £430 and £800 per child, per week.
At a glance
£430–£800per child, per week
The exact amount will vary depending on the type of fostering you can provide and the needs of the child or young person in your care.
Standard fostering
£434 – £465.50per child, per week
Everyday family fostering — a child lives as part of your household whilst decisions are made about their future. Standard fostering allowances vary by age.
Therapeutic fostering
£668.50per child, per week
Therapeutic fostering provides a higher level of therapeutic support, with additional structure, consistency and trauma-informed care.
Parent & Child fostering
£791per child, per week
In Parent & Child fostering, a parent and baby or young child live with you while you support the parent to care for their child and develop their parenting skills.
These figures are illustrative only. Your actual fostering allowance may be higher or lower depending on fostering type, the needs of the child or young person and the individual fostering arrangement.
Your fostering payments
What do our foster care payments cover?
Fostering payments help cover the costs of caring for a child whilst also recognising the time, skill and commitment it takes to be a foster parent. They also contribute towards household expenses.
Your fostering payment is made up of
For you
A professional fee for you
This recognises all the hard work, dedication and time involved in being a foster parent.
For the child
A living allowance for the child
This contributes towards the day-to-day expenses of caring for the child or young person living in your home.
Making fostering possible
Fostering is about providing children with stability, opportunities and care. Your fostering allowance supports the practical costs of caring whilst recognising the time, skill and commitment you bring. It’s part of making fostering sustainable for your household.
Beyond the weekly allowance
Other financial support and benefits
Your fostering allowance sits alongside other support designed to make fostering sustainable and to help you feel supported in the role.
Paid respite
Time to recharge
All Compass foster parents are entitled to an annual respite allowance, with qualified carers ready to step in when you need a breather.
While You Wait
Support even before you begin
Our Support Payments provide a crucial financial bridge whilst you’re waiting to receive your first foster child.
Benefits & support
Beyond the allowance
Compass foster parents can access additional benefits including Blue Light Care Membership, training, reward schemes and 24/7 support.
Refer a friend
Earn up to £4,000
If you already foster with Compass, you can receive additional referral payments by recommending someone who goes on to foster with us.
How tax relief works for foster parents
Qualifying Care Relief (QCR) is the tax relief HMRC gives foster parents. It creates a tax-free amount for fostering by combining a fixed amount for the fostering household with a weekly amount for each child or young person in your care.
These figures apply to fostering receipts rather than wages or other household income. Your own tax position depends on your circumstances.
Fixed amount for the fostering household
£20,440per fostering household, per year
Weekly relief — child under 11
£435for each qualifying week
Weekly relief — age 11 or older
£515for each qualifying week
Compass Fostering fee schedule, FY 2026/27
GOV.UK — Tax arrangements for foster parents
HMRC — Qualifying Care Relief
GOV.UK — Tax arrangements for foster parents
HMRC — Qualifying Care Relief
Want to talk through fostering allowances?
Our team can talk you through the allowances available with Compass and answer any questions about the financial side of fostering.
Yes, you’ll be self-employed — here’s exactly what that means in practice
This can be unfamiliar if you’re used to PAYE employment. Here’s the process step by step, with the relevant GOV.UK guidance for each stage.
1
Register with HMRC as self-employed
Free, done online, usually once you start receiving payments. Register for Self Assessment on GOV.UK — Compass’s finance team can point you to the right form.
2
You’ll get a Unique Taxpayer Reference (UTR)
Your personal tax ID for Self Assessment — it arrives by post soon after you register.
3
File a Self Assessment return every year
Even if you owe nothing because your income is under the QCR threshold — you still declare it. See Self Assessment tax returns on GOV.UK for the full process.
Deadline: 31 January, online
4
National Insurance is usually voluntary
Most fostering income falls below the threshold that makes NI compulsory — but you can opt to pay voluntary Class 2 contributions to protect your State Pension. You may also qualify for automatic National Insurance credits.
5
Already have a PAYE job? It sits alongside it
Your fostering allowance is declared through Self Assessment alongside any PAYE income — you don’t have to leave employment to foster. See how fostering affects benefits and tax credits on GOV.UK.
A note on tax: Compass Fostering isn’t a tax adviser. This information is general guidance, not personal tax or financial advice. If you’re unsure how fostering could affect your circumstances, speak to HMRC or a qualified tax adviser or accountant.
“I’d tell them not to be put off by the words ‘self-employed’. It really isn’t as difficult as you might imagine.”
Cathy, Compass foster parent
Read Cathy’s story on going self-employed →
How fostering allowances compare with PAYE take-home pay
These examples compare an illustrative annual fostering allowance with a gross PAYE salary that could leave someone with a similar take-home amount after Income Tax and National Insurance.
Julie
Standard fostering allowance
Illustrative example
£23,114per year
Tax-free
Your actual allowance may be higher or lower than the amount above.
PAYE salary for similar take-home
≈ £27,214illustrative gross salary for comparison
Gross, taxable
Karen & Imran
Therapeutic fostering allowance
Illustrative example
£34,762per year
Tax-free
Your actual allowance may be higher or lower than the amount above.
PAYE salary for similar take-home
≈ £43,392illustrative gross salary for comparison
Gross, taxable
Adam & Dan
Parent & Child fostering allowance
Illustrative example
£41,132per year
Tax-free
Your actual allowance may be higher or lower than the amount above.
PAYE salary for similar take-home
≈ £52,715illustrative gross salary for comparison
Gross, taxable
PAYE comparisons are based on 2026/27 Income Tax and National Insurance thresholds for a single applicant with no other income. They are illustrative comparisons only and are not personal tax or financial advice.
Could fostering be your next step?
Tax & self-employment quick answers
Do I have to pay National Insurance?
Usually not compulsorily — most fostering income falls below the threshold. You can pay Class 2 voluntarily to protect your State Pension and other entitlements.
Does respite (short-break) care count for tax relief too?
Yes — respite payments are Qualifying Care Relief income in the same way as a full-time fostering arrangement. They count towards your total fostering receipts for the year, against the same QCR amount.
Will fostering income affect my benefits or tax credits?
Fostering allowances are generally disregarded for means-tested benefits like Housing Benefit and Universal Credit. Jobseeker’s Allowance is the main exception. See Claiming benefits on GOV.UK.
How does income from another job affect the tax I pay on fostering?
Qualifying Care Relief is worked out against your fostering receipts, so salary from another job does not reduce the QCR amount itself. PAYE earnings are taxed in the normal way. If your fostering receipts are above your QCR amount, the resulting taxable fostering profit is added to your other taxable income, so your overall income can affect the rate of tax you pay. The PAYE comparison examples on this page assume a single applicant with no other income. See HMRC’s QCR guidance.
What happens if fostering income is higher than the Qualifying Care Relief (QCR) amount?
Under QCR’s simplified method, the difference between your fostering receipts and your QCR amount is treated as taxable fostering profit. Your wider taxable income can then affect the rate of tax you pay. HMRC also allows a profit method in some circumstances. Read HMRC’s QCR guidance.
Can foster parents claim expenses when they’re self-employed?
If you use QCR’s simplified method, you do not separately deduct expenses or capital allowances. If your fostering receipts are above your QCR amount, HMRC also allows a profit method, where allowable expenses and capital allowances can be deducted instead — but you cannot use QCR and the profit method for the same calculation. See HMRC Helpsheet HS236.
Do I need an accountant?
Most foster parents don’t. HMRC’s HS236 helpsheet and Compass’s finance team cover the vast majority of situations.
Figures shown: 2026/27 tax year · Last checked: 23 September 2026.
Sources used on this page:
- Compass Fostering fee schedule, FY 2026/27
- Compass Fostering — Types of fostering
- Compass Fostering — Foster care training
- GOV.UK — Minimum weekly fostering allowances
- GOV.UK — Tax arrangements for foster parents
- GOV.UK — Claiming benefits whilst fostering
- HMRC Helpsheet HS236 — Qualifying Care Relief
- HMRC BIM52765 — QCR rate tables
- GOV.UK — Register for Self Assessment
- GOV.UK — Self Assessment tax returns
- GOV.UK — Voluntary National Insurance
- GOV.UK — National Insurance credits
- GOV.UK — New State Pension
- GOV.UK — Income Tax rates & Personal Allowance
- GOV.UK — National Insurance rates