What income figure should I use for my CCS estimate?

Use your expected combined family Adjusted Taxable Income (ATI) for the full financial year. ATI includes taxable income, reportable fringe benefits, reportable employer super contributions above the minimum, and certain other adjustments. It is not the same as your gross salary or the taxable income on your last tax return. When in doubt, estimate slightly higher to avoid overpayment.

How often should I update my CCS income estimate?

Update your estimate whenever your expected annual income changes significantly — pay rise, bonus, job change, return from leave, or investment income. At minimum, review it at the start of each financial year. Centrelink does not automatically know about income changes, so the estimate you have on file is the one they use for your CCS calculation until you change it.

What if my income is variable or I do not know my annual figure?

Use the best estimate you can based on your current situation. If your income is variable, consider using the previous year's ATI as a starting point and adjusting upward if you expect to earn more. You can update your estimate as often as needed during the year as your income picture becomes clearer. A slightly higher estimate is safer than a lower one — it reduces the risk of a debt, though you may receive a top-up at balancing if your actual income was lower.

How Your Income Estimate Determines Your CCS Rate

4 min read Updated 13 June 2026

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Child Care Subsidy doesn't wait until the end of the year to know your real income. During the year, it's paid based on the estimate you give Centrelink. That estimate sets your CCS percentage — and getting it wrong is the most common cause of balancing debts.

Run the CCS Calculator

Your estimate sets your rate — not your actual income

CCS is income-tested. The higher your combined family income, the lower your subsidy percentage. But Centrelink can't know your actual income until after you've lodged your tax return, so they use an estimate you provide.

This means two families with similar incomes can receive very different CCS amounts during the year — simply because one updated their estimate and one didn't.

For 2026–27 (confirmed from 6 July 2026):

Combined family ATI	CCS rate
Up to $88,520	90%
$88,521 – $538,519	Reduces 1% per $5,000
$538,520 or more	0%

See CCS income thresholds and steps for the full taper table.

What counts as income for CCS?

CCS uses Adjusted Taxable Income (ATI) — not just wages. ATI can be higher than your take-home pay because it includes things salary packaging doesn't reduce and investment income you might not think of as "income."

ATI includes:

Wages and salary
Business income (including sole traders)
Investment income — dividends, rental income, interest
Reportable fringe benefits (salary packaging, EV novated leases)
Reportable employer super contributions
Capital gains on assets sold during the year
Some tax-free government payments

Both partners' ATI is combined for CCS purposes.

If you're unsure what to include, see adjusted taxable income explained.

What happens when the estimate is wrong

Underestimate (your income was higher than estimated): You received more CCS during the year than you were entitled to. At balancing, Centrelink recovers the overpayment. The size of the debt depends on how far off the estimate was and for how long.

Overestimate (your income was lower than estimated): You received less CCS during the year than you were entitled to. Centrelink pays you a top-up at balancing. Most families in this situation are pleased — but they've had less money during the year than they needed.

The 5% withholding Centrelink holds back each week acts as a buffer against small underestimates. For larger discrepancies, it often isn't enough.

When to update your estimate

Update when:

You or your partner start or leave a job
You receive a significant pay rise, bonus or commission
You expect investment income or a capital gain
Your partner's situation changes
You receive a redundancy or leave payout
You start or stop salary packaging

There's no limit on how often you can update. Changes take effect from the start of the next CCS fortnight after Centrelink processes the update — they don't apply retrospectively.

For the mechanics of how updates flow through the system, see how to update your CCS income estimate.

The practical upshot

Your income estimate is the single biggest lever on your weekly childcare gap. A $10,000 underestimate at the $120,000 mark costs roughly 2 percentage points of CCS — about $6/day for a typical family. Across a full year, that adds up.

Getting the estimate right during the year is better than waiting for balancing to sort it out.

See how income changes affect your estimate →

This is general guidance only. CCS is assessed by Services Australia based on your actual Adjusted Taxable Income after the year ends. For personalised advice, contact Services Australia on 136 150 or visit servicesaustralia.gov.au/child-care-subsidy.