Childcare is expensive. The average cost for a day of childcare depends on different factors, and that cost goes up with each additional child. But how much does it cost?
The numbers may seem daunting, but it is essential to understand that there are ways you can save on childcare through tax credits and subsidies.
In addition, some states offer financial assistance programs or other benefits such as free or reduced-priced services that make childcare more affordable!
In this post, we will try to help understand how much childcare costs.
Childcare and Education
Formal childcare costs in Australia vary from state to state and provider to provider.
A long daycare centre would charge between AUD 70 and 185 per day. In contrast, a family daycare centre (home-based early childhood education) costs between AUD 7.5-16.8 per hour, depending on location and services offered.
Hiring a live-in nanny would cost a parent between AUD 17 and 25 per hour, while a live-out nanny would cost AUD 17-35 plus the agency's fee. A trained au pair would cost AUD 200-300 per week + agency fee.
On the education front, the average cost of schooling in Australia is higher than in Germany or New Zealand but much lower than in the UK. For example, getting a child into preschool would cost between AUD 45-80 per day.
Overall, education from Prep to Year 12 through a public school can cost on average AUD 66,000. However, schooling at a private establishment would cost a lot more – about AUD 475,000.
These figures would include tuition fees and expenses for transport, clothing and extracurricular activities.
Schooling costs are slightly lower for regional Australia – AUD 50,641 for public schools and AUD 347,572 for private schools. However, Sydney and Melbourne are the most expensive places in Australia for children's education, and Hobart is the cheapest.
How Much Does Child Care Cost?
We have sourced some information from the Australian Bureau of Statistics (ABS), which will hopefully give you a little more information about what prices to expect as you look for care.
Every three years, the ABS conducts a nationwide Child Care Survey that presents information about the use and demand for child care for children aged 0-12 years.
The last survey was completed in 2017, and the findings provide valuable information on average child care costs across Australia.
It is worth pointing out that the costs reported here are the net prices to parents after the Child Care Benefit and the Child Care Rebate were taken into account.
The ABS survey showed that in 2017, more than 1.8 million children (49 per cent) aged up to 12 years usually attended some care, whether formal or informal.
As with previous survey years, long daycare was the most commonly used formal care, followed by before or after school care programs.
Grandparents were the most popular type of informal care.
For most children who usually attended formal care, the mean cost after subsidies was $110.50 per week and the mean number of hours attended was 16.
The Department of Education also produces a regular update of child care use and costs called the Early Childhood and Child Care in Summary.
The last available report from the June quarter of 2017 shows the average hourly child care cost across all services was $8.90, and fees vary across service types from a low of $7.20 per hour for outside school hours care to a high of $10.25 per hour for occasional care.
Which Factors Increase Cost?
The best way to determine the cost of child care in your area is to contact a few services and chat with them directly.
Think about whether you would prefer to have everything provided for your child or whether you would prefer to send your child off each day with nappies and food.
This decision alone will help you determine the best type of child care for your family and will directly affect the cost.
When comparing costs, it is also essential to consider peripheral expenses, such as the price of travelling to and from the child care service in terms of petrol, public transport and convenience.
These factors can considerably affect the total price you end up paying for your child care.
The Cost Of Child Care For Your Family Depends On:
- what type of child care you use
- how many days a week your child needs care
- how many children you have in care
- whether you can get government assistance with child care costs.
Child care costs can vary across services. For example, costs might depend on whether services:
- charge fees for days children are away
- charge fees and are closed for public holidays
- supply things like meals and nappies.
The Average Child Care Costs
Childcare Costs By Location
According to the Productivity Commission report, the median weekly cost of full-time care in 2018 was $480, or $400 for family daycare.
That increased 2.8% from the year before---, and the inflation rate was only 1.8%.
Based on the report, the average weekly costs of full-time childcare in 2018 by state and territory.
Note that figures do not take into account any child care subsidies available at the time.
State Average cost per week
South Australia $458
Western Australia $475
Residents of the ACT were the worst off, with an average of $560 per week, while Queenslanders pay the least at $417 per week.
The data also showed that those with lower incomes were disproportionately affected, with $1 of every $12 in disposable income going towards childcare fees.
Childcare Costs By Type Of Care
Parents are desperately in need of child care; in fact, nearly one in six parents with kids younger than school age said they could use more weekly child care hours.
Of those, one-third needed the extra hours because of work.
The type of childcare services can also have an impact on cost. According to the Early Childhood and Child Care, in Summary, published by the Department of Education and Training, certain kinds of childcare are more expensive than others.
Occasional care is the most costly, and outside school hours care tends to be the least. The average hourly fee for all service types was $9.25.
These are the available figures before subsidies, from the quarter to June 2018.
Child Care Service Type Average hourly fee
Long day care $9.60
Family day care and in-home Care $8.95
Occasional care $10.60
Outside school hours care $7.50
We were spending my whole income on daycare" and "the cost of childcare makes it pointless to work" are comments one often finds circulating in online parents' groups.
The cost of childcare continues to be a significant barrier for women returning to work --in Brisbane, parents with two children could be forking out as much as $35,000 a year, after subsidies.
Costings were worked out before government subsidies kicked in and were powered by a database of 23,000 childcare providers, updated constantly. The cost of childcare is high, particularly when you get to two children.
Many discussions on mums' groups about whether it is worth returning to work when it could cost them more than their salary or income.
A lot of people are crunching the numbers to see what is most cost-effective.
The average cost of childcare in Australia was estimated at $106.39 each day before subsidies.
We have found what has impacted the cost of childcare is the price of land or the cost of leasing property for childcare services. In affluent suburbs, the charge is usually higher.
Across south-east Queensland, the most expensive postcodes for daycare centres were all in Brisbane, the priciest being the CBD, which was $129.15 each day.
But Queensland's capital city was still remarkably cheaper for a day of childcare compared with the Sydney CBD ($158.98) and the Melbourne CBD ($142.99).
Ascot and Hamilton, Queensland's wealthiest suburbs, came in 23rd place, cheaper than outer-city suburbs such as Brookfield and Kedron.
Top 10 Most Expensive
- Brisbane CBD - $129.15
- Milton/Paddington - $122.92
- Balmoral/Bulimba/Hawthorne - $121
- Sinnamon Park/Seventeen Mile Rocks - $119.22
- Fortitude Valley/Bowen Hills - $119.14
- Annerley/Fairfield - $118.51
- Chapel Hill/Kenmore/Brookfield - $117.50
- Tarragindi/Holland Park - $116.25
- Kangaroo Point/East Brisbane - $115
- Greenslopes - $114.29
Twenty-nine south-east Queensland postcodes came in above the national average of $106.39, while 129 postcodes were below the national average.
All postcodes on both the Sunshine and Gold Coasts were below the national average, except for Noosa Heads, where an average day of daycare costs $109.17.
Top 10 Cheapest
- Bethania - $75
- Bracalba/Wamuran - $79
- Redbank Plains -$79.42
- Woodridge/Logan Central - $81.06
- Petrie -$82.06
- Bundamba - $82.30
- Bald Hills - $83.08
- Alexandra Hills- $83.17
- Blackbutt/Fernvale -$83.81
- Boronia Heights - $85.06
If you're interested in a child care service, it's best to contact the service directly to ask about fees. If you can get government assistance, your child care costs could be much lower than the fees you're quoted.
The Impact Of Childcare Subsidies
However, there is a bright spot in this cloud---the data was collected before implementing the current Child Care Subsidy, which took effect on 1 July 2018 and replaced the previous Child Care Benefit and Child Care Rebate entitlements.
The Government has since put $9.2 billion into early childhood education and care, primarily in subsidies.
Many parents may now be eligible for this means-tested subsidy, which helps with the cost of childcare fees.
To estimate how much your family may be eligible for, use the Government's online Payment and Service Finder.
Subsidies can make a significant difference in making childcare affordable and practical for Australian families. In its most recent Childhood Education and Care survey in 2017, the ABS found that 49.3% of children aged 0 to 12 years usually attended some form of formal or informal care.
It also found that children attended care for a mean of 16 hours per week.
The mean cost after the subsidies available at the time was $110.50 per week. That was up from $74.30 per week in 2011, with fees adjusted for inflation.
The Early Childhood and Child Care In Summary report show that the out-of-pocket costs for childcare before subsidies depended on the family's income, among other factors:
- 29.1% of weekly disposable income for families with a gross income of $35,000 per year
- 9.5% of weekly disposable income for families with a gross income of $215,000 per year
After subsidies were taken into account, out-of-pocket costs were as follows:
- 8% of weekly disposable income for families with a gross income of $35,000 per year
- 4.7% of weekly disposable income for families with a gross income of $215,000 per year
Childcare can be complicated for many families because it's not always easy to quantify its cost.
You'll also have to consider the distance you travel to get to the child care, both in terms of what it costs to get there and the time it takes.
For that reason, it's often ideal to find a childcare centre in your local area.
Types Of Government Assistance With Child Care Costs
Depending on your situation, you might be able to get one or both of these forms of Australian Government assistance with child care costs:
- Child Care Subsidy
- Additional Child Care Subsidy.
- Child Care Subsidy
If you're eligible, the Australian Government pays the Child Care Subsidy directly to your approved child care service to reduce the fees you pay.
Approved Child Care Services
The Australian Government approves the following types of services. You must use one of these types of services to get the Child Care Subsidy:
- centre-based daycare, including extended daycare and occasional daycare
- family daycare
- outside school hours care, including vacation care
- in-home care.
The Australian Government pays different maximum hourly rates to these different types of approved services. You also have to meet some additional conditions to get payments for in-home care fees.
Who Can Get The Child Care Subsidy?
You can get the Child Care Subsidy if you are:
- responsible for paying child care costs for a child for whom you care at least two nights a fortnight or 14% of the time
- An Australian resident or your partner is (there are some exemptions).
Your child must be:
- immunised or catching up with immunisations (there are some exemptions)
- not attending secondary school unless you can prove your child needs supervision.
If your child attends secondary school, you might be able to claim the Child Care Subsidy if your child is under 13 years, or your child is 14-18 years and has a disability.
You can get the Child Care Subsidy if you're a parent, step-parent, foster parent, grandparent or kinship carer.
Additional Child Care Subsidy
The Additional Child Care Subsidy provides extra help with child care costs for some carers who can also get the Child Care Subsidy.
It's important to remember that child care costs vary from provider to provider and from state to state, and the Government does not regulate them.
Most providers charge a minimum daily rate or an hourly rate. Some service fees may include food and nappies, while others, such as family daycare, require parents to provide everything.
It's also helpful to remember that these are the prices before the Child Care Subsidy has been considered.
This subsidy, introduced in July 2018 to replace the Child Care Benefit and Child Care Rebate, reduces the cost of care to eligible families.
You can get the Additional Child Care Subsidy if you're a grandparent or great-grandparent with at least 65% care of your grandchildren.
If you're a step-grandparent or grandparent of adopted children, you're also eligible. However, you must also be getting income support like the Age Pension.
How Much Child Care Subsidy Can You Get?
The amount of subsidy you can get depends on:
- the type of child care you use
- your child's age
- your family's income
- The things you and your partner do while your child is in care – for example, how long each of you spends working, looking for work, or studying.
If you're not sure how the Australian Government can help your family with child care costs, you can call the Department of Human Services on 136 150.
You can also visit the Department of Human Services – Assistance with child care fees or use the Centrelink Payment and Service Finder.
Transitioning To Work
You can get the Additional Child Care Subsidy if your family income is below a certain amount and you're also studying, looking for a job, working or training.
Under most circumstances, you must have an active job plan. You must also be getting one of these payments:
- Parenting Payment
- Newstart Allowance
- Disability Support Pension
- Youth Allowance
- Carer Payment
- Special Benefit (in certain circumstances)
- Farm Household Allowance
- a means-tested ABSTUDY payment.
As with many other countries, education is cheaper for domestic students than for international students. They can also apply for many government loans and scholarships, which are not always open to international students, bringing their costs down even further.
Overall, the average child care cost for one child in 2020 was $612/week for a nanny (up from $565/week in 2019), $340/week for a child care or day care center (up from $182/week) and $300/week for a family care center (up from $177/week).
There's also liability insurance and licensing fees, but by far the biggest cost is labor, almost 80% of Imprints Cares' budget. Wages among child care providers are generally low — about $11 or $12 an hour, Heck said — but they add up for child care centers because the work is labor intensive.
Relevant childcare costs are calculated by aggregating the average weekly childcare costs for each child for whom charges are incurred and rounding them up to the nearest whole pound. It is important only to include costs that the claimant actually incurs and pays for.