Child Care Subsidy calculator
What child care actually costs you after the subsidy, including the hourly rate cap that makes the effective rate lower than the headline percentage.
Covers 2026-27 · rates as at 2026-07-01
Out of pocket per fortnight
Estimate$254.00
72.7% of your fee is covered, against a 77% headline rate
- Subsidy rate
- 77.06%
- Subsidy per fortnight
- $676.00
- Out of pocket a year
- $6,612.00
| Fee at 15.50 an hour | $930.00 |
|---|---|
| Hourly rate cap | $14.63 |
| Subsidy applies to | $14.63 |
| Subsidy received | $676.00 |
| You pay | $254.00 |
- Your fee of $15.50 exceeds the $14.63 cap, so the subsidy is a share of the cap and the whole excess is yours — the effective rate is 72.7%, not 77%.
- The subsidy falls 1 percentage point per $5,000 of family income, which is a real marginal cost on a second earner that no tax table shows.
At a $15.50 fee against a $14.63 cap, the subsidy is a share of $14.63 and the whole $0.87 excess is yours — so the effective rate is below the headline one.
Do you qualify
How this is calculated
The cap, not the fee, sets the subsidy
The subsidy applies to the lower of your fee and the hourly rate cap — $14.63 for centre-based care. A centre charging $15.50 means 87 cents an hour is entirely yours on top of your normal share.
subsidy = min(fee, cap) × hours × rateOne percentage point per $5,000
The rate starts at 90% up to $85,279 of family income and falls a point for every $5,000 above it, reaching zero at $535,279. On full-time care that taper is a real marginal cost on a second income.
rate = 90% − 1% × (income − $85,279) ÷ $5,000Younger children get more
The second and each younger child attract 30 percentage points more, capped at 95%. With two children the second is subsidised far more heavily than the first, which changes the calculus of returning to work.
Worked example: $150,000 family income, $15.50 an hour, 60 hours a fortnight
| Family income | $150,000 |
|---|---|
| Fee | $15.50 an hour |
| Hours | 60 a fortnight |
| Hourly cap | $14.63 |
|---|---|
| Excess | $0.87 an hour, all yours |
| Taper | 1% per $5,000 |
A second child at the same centre attracts 30 percentage points more subsidy, so the marginal cost of the second place is far lower than the first.
What this assumes
- Both parents meet the activity test or the guarantee applies.
- An approved care service claiming the subsidy directly.
- Up to 72 subsidised hours a fortnight.
- No additional Child Care Subsidy supplements.
Where this commonly goes wrong
- Five per cent of your subsidy is withheld through the year and reconciled after you lodge your tax return, so the fortnightly figure understates what you eventually receive.
- The subsidy is paid to the service, not to you, so a change in family income flows through as a change in your gap fee rather than a payment.
- Fees above the hourly cap are the fastest-growing part of the out-of-pocket cost, and a centre raising fees above the cap costs you the whole increase.
Questions
How much Child Care Subsidy will I get?
90% at a family income up to $85,279, falling one percentage point per $5,000 above that and reaching zero at $535,279. The rate applies to the lower of your fee and the $14.63 hourly cap.
What is the hourly rate cap?
$14.63 for centre-based care, $13.56 for family day care and $12.81 for outside school hours care. The subsidy applies to the lower of your fee and the cap, so any excess is entirely yours.
Why is my effective subsidy lower than my rate?
Because your fee exceeds the cap. At $15.50 an hour against a $14.63 cap, 87 cents an hour is unsubsidised, so the share of your actual fee covered is always below the headline percentage.
Do I get more for a second child?
Yes — 30 percentage points more for the second and each younger child, capped at 95%. That makes the marginal cost of a second place substantially lower than the first.
How many hours are subsidised?
Up to 72 hours a fortnight applies regardless of activity under the Three Day Guarantee, with more available depending on the hours the family works, studies or volunteers.
Why is 5% of my subsidy withheld?
To reduce overpayments where actual income turns out higher than estimated. It is reconciled after you lodge your tax return, so the annual figure you receive is higher than the fortnightly rate suggests.
Related tools
Sources
General estimate based on published ATO rates for the 2026-27. Not tax advice, and it does not consider your objectives, financial situation or needs. Confirm your position with the ATO or a registered tax agent.
T1