Early years teachers' pay grant methodology: April 2026 to March 2027
Published 8 July 2026
Applies to England
© Crown copyright 2026
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This publication is available at https://www.gov.uk/government/publications/early-years-teachers-pay-grant-eytpg-grant-for-2026-to-2027/early-years-teachers-pay-grant-methodology-april-2026-to-march-2027
Introduction
This document sets out the methodology for the early years teachers’ pay grant (EYTPG).
From September 2026 to the end of the financial year 2026 to 2027, we are distributing £18 million of additional funding to local authorities through the EYTPG to support eligible early years provision with increased teachers’ pay costs.
The EYTPG will provide additional funding in respect of public sector early years provision for the following settings:
- schools (maintained and academies)
- governor-run academies and maintained nursery schools
Paying the grant
We will pay the grant to local authorities in October 2026. This payment is separate to the entitlements funding rates announced in December 2025. As such, local authorities are not expected to amend their local funding formulae.
Local authorities will receive one payment to cover the period between September 2026 and March 2027.
Funding rates
For the EYTPG, the approach to distribution of funding has been developed in line with previous grants. As with both the early years core entitlements funding and previous early years grants, EYTPG funding will be distributed at local authority level.
There will be a separate annual base rate per part-time equivalent (PTE) for each age group:
- under 2’s
- 2-year-olds
- 3-and-4-year-olds
The PTE data sources used to calculate the annual base rates are as follows:
| Data | Source |
|---|---|
| 3 to 4-year-old (universal and additional hours) | January 2025 schools census, January 2025 early years census - governor-run settings only |
| Early learning for 2-year-olds (EL2) (formerly referred to as FRAS) | January 2025 schools census, January 2025 early years census - governor-run settings only |
| 2-year-old working parent | Autumn 2025 schools census, January 2025 early years census - governor-run settings only |
| Under 2’s working parent | Autumn 2025 schools census, January 2025 early years census - governor-run settings only |
The PTEs for 2-year-old working parent and under 2’s working parent from the January 2025 early years census for governor-run settings have been increased in line with the overall increase in PTEs for these entitlements from spring to autumn 2025 to account for increases in entitlements.
The EYTPG annual base rates for each age group are calculated in the following way:
- First, we derive the notional annual funding available, derived from the £18 million of funding available for the September 2026 to March 2027 period on a pro-rata basis.
- Next, we calculate the percentage of the notional annual funding available for each age group using the PTE data described below and the relevant 2026 to 2027 dedicated schools grant (DSG) average hourly funding rates.
- The notional annual funding is then apportioned by these percentages to derive the notional annual funding for each age group.
- Next, we calculate the area cost adjustment (ACA) weighted PTEs for each local authority by multiplying their PTEs by their ACA factor.
- Finally, we calculate the annual base rates for each age group by dividing the notional annual funding available for each age group by the total of all local authorities ACA weighted PTEs for each age group. The base rates used in the calculation of local authority level rates are unrounded but are presented here rounded to the nearest pound.
These annual base rates are as follows:
- £60 for 3 and 4-year-olds
- £79 for 2-year-olds
- £106 for under 2’s
The annual base rates will be multiplied by the ACA and rounded to the nearest pound to provide each local authority their own annual rate per PTE per age group. These local authority annual rates will then be used in the subsequent allocations, subject to a pro-rating as described in allocations. We have published rates tables detailing the EYTPG annual rates for each local authority.
For this grant, we have used the schools ACA rather than the early years ACA. The early years ACA is influenced by private, voluntary and independent (PVI) providers premises related costs, whereas this grant provides additional funding to school-based settings only. Full detail of the schools ACA can be found in the 2026 to 2027 technical note. Where a local authority area is subject to more than one ACA rate, we utilise the weighted average ACA as used for schools’ growth funding.
Allocations
Local authority allocations will be allocated using PTE data from the January 2026 school census. Local authority allocations will be subject to a pro-rating of 25/38ths to reflect that this funding covers the period of September 2026 to March 2027. This proportion is used because the autumn and spring terms comprise 25 weeks compared to a full year’s funding covering 38 weeks.
We will pay the EYTPG to local authorities in a single payment in October 2026, to cover the 2026 to 2027 financial year. This allocation will not be adjusted.
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