Child Care Subsidy Calculator 2026: Estimate Your Out-of-Pocket Costs
Calculate your 2026 Child Care Subsidy entitlement with our guide. Covers CCS percentages by income, activity test hours, hourly fee caps, and worked examples for every income bracket.
How to Calculate Your Child Care Subsidy
Your Child Care Subsidy (CCS) amount depends on three factors working together: your combined family income (which sets the subsidy percentage), the activity test (which sets maximum subsidised hours), and the hourly fee cap (which limits what the government will subsidise per hour). To calculate your actual out-of-pocket cost, multiply your provider's hourly fee (or the fee cap, whichever is lower) by your CCS percentage to get the subsidy per hour. Then subtract the subsidy from the actual hourly fee to get your gap cost per hour. Multiply by the number of hours of care used per fortnight for your total fortnightly out-of-pocket cost. This calculation is done automatically by Centrelink, but understanding it helps you compare providers and estimate costs before enrolling.
2025-26 CCS Percentages by Family Income
The CCS percentage decreases as your combined family income rises. For the 2025-26 financial year: families earning up to $80,000 receive 90% (the maximum). From $80,001 to $175,000, the percentage tapers down — at $100,000 you get roughly 82%, at $120,000 roughly 74%, at $140,000 roughly 66%, and at $160,000 roughly 56%. From $175,001 to $250,000, the taper steepens — at $200,000 you receive about 50%, and at $250,000 about 30%. From $250,001 to $350,000, further reduction occurs, and above $530,000 there is zero entitlement. Importantly, since July 2023, families with multiple children aged 5 or under in care receive higher CCS percentages for second and subsequent children — up to 30 percentage points higher, meaning some families could receive up to 95% subsidy for additional children.
Activity Test: How Many Hours You Can Claim
The activity test determines the maximum number of subsidised child care hours per fortnight. Both parents' (or the single parent's) recognised activity levels are assessed, and the lower of the two sets the cap. For 8 to 16 hours of recognised activity per fortnight, you can claim up to 36 subsidised hours. For 16 to 48 hours of activity, up to 72 hours. For more than 48 hours, up to 100 hours per fortnight. Recognised activities include paid employment, self-employment, approved study or training, volunteering, looking for work, and running a business. If your combined family income is $80,000 or less per year, you are exempt from the activity test and automatically receive at least 36 hours per fortnight. This ensures low-income families have guaranteed access to early learning regardless of workforce participation.
Hourly Fee Caps Explained
The government does not subsidise unlimited child care fees — it sets hourly fee caps that limit the amount on which CCS is calculated. For 2025-26, the caps are approximately $13.73 per hour for centre-based day care (long day care), $12.41 for family day care, $13.19 for outside school hours care (OSHC), and $34.46 per family for in-home care. If your provider charges more than the cap, CCS is only calculated on the capped amount, and you pay the full excess. For example, if your centre charges $15.50 per hour and the cap is $13.73, and your CCS rate is 75%, the government pays 75% of $13.73 ($10.30), leaving you to pay $3.43 on the capped portion plus $1.77 above the cap — totalling $5.20 per hour out of pocket instead of the $3.88 you might expect from a simple 25% gap calculation.
Worked Example: Two-Income Family
Sarah and James have a combined income of $150,000 and two children in long day care. Their centre charges $14.00 per hour. At $150,000, their CCS rate is approximately 62%. Both parents work full-time (more than 48 hours per fortnight), qualifying for 100 subsidised hours per child. The fee cap is $13.73, so CCS applies to $13.73 per hour. Subsidy per hour per child: $13.73 x 62% = $8.51. Out-of-pocket per hour per child: $14.00 - $8.51 = $5.49. For each child using 50 hours per week (100 per fortnight), the fortnightly gap is $549 per child, or $1,098 for two children. Annually (50 weeks), the family pays approximately $27,450 out of pocket. However, because their second child is under 6, they receive a higher CCS rate of approximately 92% for that child, reducing the second child's gap to approximately $1.36 per hour or $136 per fortnight — saving over $10,000 per year.
Avoiding CCS Debts at Reconciliation
CCS is paid based on your estimated family income during the year, but after you lodge your tax returns, Services Australia reconciles your actual income against your estimate. If your actual income was higher than estimated, your CCS rate was too high and you will owe a debt. If it was lower, you receive a top-up. To avoid large debts, update your income estimate through myGov whenever your circumstances change — new job, pay rise, bonus, overtime increase, rental income changes, or investment gains should all trigger an update. It is safer to slightly overestimate your income (resulting in a small top-up at reconciliation) than to underestimate. Both parents must lodge their tax returns by the lodgement deadline for reconciliation to occur. If either parent does not lodge and does not confirm they are not required to lodge, you may have to repay all CCS received for the financial year.
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General information and estimates only — not financial, tax, or legal advice. Always verify with Services Australia.
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