Why Did My Childcare Fees Go Up?

Got a fee increase email from your childcare centre?

The daily fee is only part of the story.

What matters is your new gap fee: what you actually pay after Child Care Subsidy.

And that number is not always obvious from the fee notice. A $10 daily fee rise might be partly softened by CCS. Or it might feel close to the full increase if your centre's hourly fee is already above the government hourly cap.

The fee notice tells you what the centre charges.

It does not tell you what your family will actually pay.

Use the free Child Care Subsidy calculator to enter your new daily fee and estimate your updated weekly out-of-pocket cost.

Tip: start by changing only one thing: the daily fee. Keep your income, activity hours and days in care the same. That shows the impact of the fee rise itself.

Why childcare fees are going up

There usually is not one single reason childcare fees increase.

Centres are dealing with higher staffing costs, rent, food, insurance, compliance, utilities and general operating costs. Some are normal business pressures. Some are linked to broader policy changes across the early childhood sector.

The frustrating part for families is that all of this eventually turns into one very practical question:

What does this do to our weekly bill?

1. Educator wages are increasing

Early childhood educators should be paid properly. That part should not be controversial.

The Australian Government's Worker Retention Payment is funding a 15% wage increase for eligible early childhood education and care workers over two years. It supports a 10% increase from December 2024, an additional 5% from December 2025, and runs through to 30 November 2026. Services receiving the payment must pass it on to eligible workers. (education.gov.au)

That is good news for educators.

The problem is not the wage rise.

The problem is that childcare is labour-heavy, and families are still left trying to decode how sector cost changes flow through to their own bill.

Your fee rise may also include rent, food, insurance, compliance or other operating costs.

It is usually a mix.

2. Some fee rises are limited, but your bill can still change

Some fee rises are limited under the Worker Retention Payment rules, but that does not mean every family's bill is protected.

The Department of Education says services receiving the payment have fee-growth limits, including 4.4% for the first year and 4.2% for the second year of the program. The cap for the final period to 30 November 2026 is still to be determined. (education.gov.au)

That is designed to help stop the funded wage rise being simply passed straight on to families through higher fees.

But it does not mean every centre's fees are frozen.

And it does not mean every cost is covered.

Your centre may mention this in its fee increase notice, but many families will simply see the final daily fee rather than the policy detail behind it.

For families, the hard part is that all of those behind-the-scenes costs eventually become one number on the invoice.

3. The CCS hourly cap can make the increase feel worse

This is the bit many families are never properly shown.

Child Care Subsidy does not simply apply your CCS percentage to whatever your centre charges.

The government only subsidises fees up to the relevant hourly rate cap.

For 2026–27 (confirmed from 6 July 2026), the Centre Based Day Care hourly rate cap for children below school age is $15.19 per hour. The Department of Education says hourly rate caps and income thresholds are adjusted annually based on CPI. (education.gov.au)

If your centre charges more than that, the amount above the cap is not subsidised.

You pay that part yourself.

This is why the hourly cap matters so much.

If your centre's hourly fee is below the cap, CCS may soften part of the increase.

If your centre's hourly fee is already above the cap, more of any future increase can land directly on you.

The more your centre charges above the hourly cap, the more the fee increase can feel like it is landing straight on your family.

Example: why your gap fee can jump

Say your centre charges:

In this example, CCS is calculated on $15.19 per hour, not the full $16.50.

The extra $1.87 per hour is above the cap.

Across a 10-hour day, that is $18.70 per day sitting outside the subsidised amount.

So even if you have a decent CCS percentage, part of your childcare fee may already be landing fully on you.

That is why a fee increase can feel bigger than expected.

Want the actual number? Enter your centre's new daily fee in the free CCS calculator and compare your updated weekly gap.

4. Your CCS percentage can stay the same while your bill goes up

This is one of the most annoying parts of the system.

Your CCS percentage might not change at all.

But your weekly gap fee can still increase because:

• the daily fee went up
• the hourly fee moved further above the cap
• your session length affects the hourly calculation
• your number of booked days changed
• your withholding amount changed
• your income estimate changed
• your activity hours changed

So when a centre says "fees are going up by $X per day", that is not the same as saying "your family will pay $X more per day".

You need to run the actual CCS calculation.

Why two families at the same centre can pay different gap fees

Two families can receive the same fee increase notice and have completely different outcomes.

That is because CCS depends on household circumstances, including:

• combined family income
• activity test hours
• type of care
• session length
• number of children in care
• child age
• whether the hourly cap is being exceeded
• withholding percentage
• whether the higher CCS rate applies for a second or younger child under 6

One family might have most of the increase partly softened by CCS.

Another family might be paying more above the cap and feel the rise much more directly.

Same centre.

Same fee increase.

Different family result.

What to check when your childcare fees increase

When your centre sends a new fee schedule, do not just look at the daily fee.

Check the actual weekly impact.

You should update:

1. Your old and new daily fee
2. Your session hours
3. Your number of days per week
4. Your household income estimate
5. Your activity hours
6. Your withholding percentage
7. Whether the higher CCS rate applies for a second or younger child under 6

Then compare the new result with what you were paying before.

That gives you the number that actually matters: your new weekly out-of-pocket cost.

A fee rise can change more than your childcare bill

This is the part families are usually left to work out alone.

A higher childcare fee can affect more than your weekly invoice.

It can change whether an extra work day is worth it, especially if the extra income also changes your CCS rate, tax position or Family Tax Benefit.

That is why childcare decisions can feel so frustrating.

You are not just choosing care days.

You are trying to work out the household maths behind work, income, subsidy, tax and family costs.

Recalculate your new childcare gap fee

If your centre has sent a fee increase notice, enter the new daily fee into the free CCS calculator.

You can check:

• your CCS percentage
• your weekly out-of-pocket cost
• whether the hourly cap affects you
• your estimated annual childcare cost
• how much CCS may be withheld
• whether your income estimate may need updating

CCSChecker is independent. It is not affiliated with Services Australia, Centrelink or any childcare provider.

The calculator gives an estimate only. Your final CCS entitlement is assessed by Services Australia.

Trying to decide if an extra childcare day is worth it?

This is where the "4th day problem" shows up.

An extra work day might increase your income.

But it can also:

• increase childcare costs
• reduce your CCS percentage if your income rises enough to affect your CCS rate
• affect Family Tax Benefit
• change your tax position
• leave you with less extra money than expected

That is why looking at the childcare invoice alone is not enough.

If you are choosing between 3, 4 and 5 days, you need more than a single weekly fee estimate.

Premium lets you compare 3, 4 and 5 day scenarios side by side, including childcare costs, income changes and the broader household impact.

It is designed for the real question families ask:

If we add another childcare day, what do we actually keep?

Quick FAQ

Why did my childcare centre increase fees?

Usually because the centre's costs have increased. That may include educator wages, rent, food, insurance, utilities, compliance, administration, staffing and other operating costs.

Should I ask my centre why fees went up?

Yes. Your centre should be able to explain the main reasons for the fee increase.

But even with that explanation, you still need to calculate your own gap fee, because every family's CCS result is different.

Does CCS cover childcare fee increases?

Sometimes partly, but not always. CCS is limited by the hourly rate cap. If your centre charges above the cap, the amount above the cap is not subsidised.

Why did my centre fee go up when the government says childcare is subsidised?

Because "subsidised" does not mean "covered".

CCS only pays a percentage of eligible fees, and only up to the hourly rate cap. If your centre charges above the cap, or if your CCS percentage is lower because of your income or activity hours, more of the cost sits with you.

What is the 2026–27 CCS hourly cap?

For Centre Based Day Care for children below school age, the 2026–27 hourly rate cap is $15.19 per hour (confirmed from 6 July 2026). (education.gov.au)

Why did my gap fee go up if my CCS percentage stayed the same?

Because your CCS percentage is only one part of the calculation. The daily fee, session length, hourly cap, booked days and withholding settings can all change your weekly gap.

Will my gap fee rise by the same amount as the daily fee increase?

Not necessarily.

If CCS applies to part of the increase, your gap fee increase may be smaller than the daily fee rise.

But if much of your fee already sits above the hourly cap, the increase may feel close to the full amount.

Should I update my income estimate when fees go up?

A fee increase does not automatically mean your income estimate has changed.

But it is a good time to check your estimate. If your income estimate is too low, you may receive too much CCS during the year and have to repay some after balancing.