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How do childcare costs and extra work affect your family?

Start with the childcare fee, then apply the estimated CCS rate, hourly cap and subsidised hours. For a work decision, compare the resulting childcare gap with the added income after estimated tax. These short answers use current 2026–27 settings and show the numbers before the caveats.

Last updated 11 August 2026 · official settings checked against Services Australia, the Department of Education and the ATO

How does Child Care Subsidy work in Australia?

CCS reduces the childcare fee your family pays. Your percentage depends mainly on family adjusted taxable income, while the dollar subsidy also depends on the session fee, government hourly cap and available subsidised hours. Eligible second and younger children aged 5 or under may receive a higher rate.

Illustrative example: At $120,000 family ATI, the estimated standard rate is 83.7%. Three 10-hour days at $120 each produce $360 in weekly fees, about $301.32 in CCS and a $58.68 weekly gap, before the usual 5% withholding.

Calculate your childcare gap · Services Australia income rates

Is another workday worth it after childcare?

Another workday is worthwhile in cash terms when the extra income after estimated tax is greater than the increase in childcare gap. The answer can go backwards when extra care, fewer subsidised hours or a lower CCS percentage cost more than the added take-home pay.

Illustrative example: One $60,000 full-time salary moving from 3 to 4 days adds $9,510 a year after estimated tax. With a $120,000 partner income and one child attending 12-hour sessions at $180 a day, the childcare gap rises by $10,033.92. The family is $523.92 a year worse off before other work costs.

Compare your workdays · Legislated 2026–27 resident tax rates

Why might my CCS percentage not apply to the full childcare fee?

CCS applies to the lower of the service's hourly fee or the government hourly cap, and only within the family's subsidised hours. In 2026–27, the centre-based cap for a child below school age is $15.19 an hour. Any fee above that cap remains in the family gap.

Illustrative example: A $180 fee for a 10-hour session equals $18 an hour. The standard CCS percentage can apply to no more than $15.19 an hour, so $28.10 of that daily fee sits above the cap before the family's subsidised percentage is applied.

Department of Education CCS settings

What does the 3 Day Guarantee mean for childcare costs?

The 3 Day Guarantee gives every CCS-eligible family at least 72 subsidised hours per child each fortnight from 5 January 2026. It does not make 3 days free, guarantee a childcare place or remove the family gap. Eligible families can receive 100 hours in specified circumstances.

Illustrative example: Three 12-hour sessions a week use exactly 72 hours a fortnight. A fourth 12-hour session takes the total to 96 hours, leaving 24 hours outside a 72-hour entitlement. The family's CCS percentage and hourly cap still apply to the first 72 hours.

Department of Education 3 Day Guarantee

Examples were verified against the ParentMath calculation engine on 11 August 2026. Educational estimates only. Services Australia determines actual CCS eligibility and entitlement.