diff --git a/.gitignore b/.gitignore
index b08db0e..f276527 100644
--- a/.gitignore
+++ b/.gitignore
@@ -7,3 +7,6 @@
 
 # Output of the go coverage tool, specifically when used with LiteIDE
 *.out
+
+# kaniko base image cache files
+sha256:*
diff --git a/Dockerfile.test b/Dockerfile.test
index 201b146..094f1e7 100644
--- a/Dockerfile.test
+++ b/Dockerfile.test
@@ -2,4 +2,4 @@ FROM alpine:3.8
 
 RUN apk add --update git
 
-ENTRYPOINT [ "/usr/bin/plugin.sh" ]
+RUN apk add --update jq
diff --git a/README.md b/README.md
index f09134e..cf3a7d8 100644
--- a/README.md
+++ b/README.md
@@ -7,3 +7,36 @@ A thin shim-wrapper around the official [Google Kaniko](https://cloud.google.com
 ```bash
 docker run -it --rm -w /src -v $PWD:/src -e DOCKER_USERNAME=${DOCKER_USERNAME} -e DOCKER_PASSWORD=${DOCKER_PASSWORD} -e PLUGIN_REPO=banzaicloud/kaniko-plugin-test -e PLUGIN_TAGS=test -e PLUGIN_DOCKERFILE=Dockerfile.test banzaicloud/kaniko-plugin
 ```
+
+## Test that caching works
+
+Start a Docker registry at 127.0.0.1:5000:
+
+```bash
+docker run -d -p 5000:5000 --restart always --name registry --hostname registry.local registry:2
+```
+
+Add the following lines to plugin.sh's final command and build a new image from it:
+
+```diff
++    --cache=true \
++    --cache-repo=127.0.0.1:5000/${PLUGIN_REPO} \
+```
+
+```bash
+docker build -t banzaicloud/kaniko-plugin .
+```
+
+
+Warm up the alpine image to the cache:
+
+```bash
+docker run -v $PWD:/cache gcr.io/kaniko-project/warmer:latest --image=alpine:3.8
+```
+
+
+Run the builder on the host network to be able to access the registry:
+
+```bash
+docker run --net=host -it --rm -w /src -v $PWD:/cache -v $PWD:/src -e DOCKER_USERNAME=${DOCKER_USERNAME} -e DOCKER_PASSWORD=${DOCKER_PASSWORD} -e PLUGIN_REPO=banzaicloud/kaniko-plugin-test -e PLUGIN_TAGS=test -e PLUGIN_DOCKERFILE=Dockerfile.test banzaicloud/kaniko-plugin
+```