The CCS percentage may fall
For 2026–27, the standard rate generally falls by one percentage point for each $5,000 of family income above $88,520. A pay rise can therefore move both tax and CCS.
How does a salary increase change the childcare maths?
A salary increase can raise take-home pay while also increasing family adjusted taxable income and reducing the CCS percentage. Compare both movements together. The useful number is the change in household income after estimated tax and childcare, with the same care pattern used on each side of the comparison.
Test a new salaryA $10,000 full-time pay rise adds $4,990.72 after tax and childcare
One parent works four days and their partner earns $80,000. Raising the full-time salary from $80,000 to $90,000 increases actual employment income by $8,000. With one child in four $150 sessions, the estimated CCS rate falls from 78.9% to 77.3% and the annual childcare gap rises by $449.28.
The household can still finish ahead
In this example, the extra after-tax employment income exceeds the higher childcare gap. The result will differ with salary, partner income, hours, fees and the number of children in care.
Quick answers
Pay-rise questions
Can a pay rise reduce Child Care Subsidy?
Yes. A higher family ATI can reduce the CCS percentage, although the family may still finish ahead overall.
Should I update my family income estimate after a pay rise?
Keep the full-year family income estimate current so the CCS paid during the year better reflects expected income.
Income thresholds checked 11 September 2026 against Services Australia. Tax rates checked against the legislated 2026–27 resident rates. Example verified against calculator.mjs.