Child Care Subsidy Calculator

How the Child Care Subsidy actually works

The Child Care Subsidy (CCS) is a federal government payment that reduces what you pay for approved child care. It's not a lump sum that lands in your bank account, it's paid directly to your provider as a percentage of your fees, up to an hourly cap the government sets for each type of care. Two things decide your result: the income test, which sets your subsidy percentage (a higher combined family income means a lower CCS rate), and the activity test, which sets how many hours of subsidised care you're entitled to per fortnight. Both are assessed by Services Australia through myGov. To be eligible at all, you generally need to be an Australian resident, have a child under 13 who isn't yet in secondary school, and use an approved child care service.

2026-27 CCS income thresholds and subsidy percentage

Your CCS percentage is based on your and your partner's combined annual income, not your individual salary. For the 2026-27 financial year, families on $88,520 or less get the maximum 90% rate. Above that, the rate tapers down by 1 percentage point for every $5,000 of income, reaching 0% once combined income hits $538,520. This calculator models that taper as a smooth, continuous line rather than rounding your income down to the nearest $5,000 step, so your real assessed rate from Services Australia may land a fraction of a percentage point differently.

These thresholds are indexed each 1 July, so the exact dollar figures shift slightly every financial year. Always check your current CCS percentage on myGov before budgeting around it, this calculator is for planning, not a replacement for your actual assessment.

The activity test: how many hours are subsidised

From 5 January 2026, the old tiered activity test was replaced for most families by the "3 Day Guarantee". Every CCS-eligible family is now entitled to a baseline of 72 subsidised hours per fortnight, roughly three standard days a week, regardless of how much you work, study or look for work, and it applied automatically to existing recipients. A higher entitlement of 100 hours a fortnight is available if you and your partner each do more than 48 hours a fortnight of recognised activity (paid work, self-employment, approved study or training, volunteering, or actively looking for work), if you have a valid exemption, or if your child is Aboriginal or Torres Strait Islander. This calculator doesn't work out your activity test entitlement for you, it's informational context only, so enter the hours of care you actually plan to use and check your own entitlement on myGov.

Higher CCS for two or more children under 5 in care

If you have more than one CCS-eligible child aged five or under in approved care at the same time, the younger child (or children) can get a boosted rate, up to 95%, on top of your income-tested rate, while the eldest of those children is generally assessed at your standard rate. The children don't need to attend the same service, and the boost is applied automatically once Services Australia can see both are in care, there's no separate application. The income cutoff for this higher rate is set well above the standard CCS ceiling and, like every other CCS figure, is indexed annually, so check the current threshold on myGov rather than relying on a number here. This calculator only estimates a single child, so if this applies to your family, your real household subsidy for the younger child is likely higher than what's shown above.

Why your subsidy percentage isn't the same as your savings: the hourly rate cap

This is the part that trips people up most. CCS only applies to the lower of your actual hourly fee or the government's hourly rate cap for your type of care. If your provider charges above the cap, you pay that entire difference yourself, on top of whatever percentage isn't subsidised on the capped amount.

These are the 2026-27 caps this calculator uses. In reality, Services Australia sets slightly different caps depending on your child's age within some care types, and also publishes a separate cap for in-home care, none of which is modelled here for simplicity. Caps are indexed by CPI each year, so always confirm the current figures for your provider's care type on myGov.

Worked example: $120,000 income, centre-based care

Say a family has a combined income of $120,000, one child under 5 in centre-based day care, uses 4 days a week at 8 hours a day, and their centre charges $150 a day, or $18.75 an hour.

Income above the floor is $120,000 minus $88,520, or $31,480. Dividing that by $5,000 gives roughly 6.3 percentage points of reduction, taking the CCS rate from 90% down to about 83.7%. Because the fee of $18.75 an hour is above the $15.19 cap, the subsidy is only calculated on the capped amount, so despite an 83.7% subsidy rate, this family still pays close to $386 a fortnight out of pocket. Run your own numbers, hours and care type through the calculator above for a figure that actually matches your situation. If you want a way to plan for a cost like this alongside the rest of your household spending, our guide to building a family budget covers sinking funds for lumpy costs like this one.

Common misconceptions

"My subsidy percentage applies to my full fee." Not quite, your CCS percentage applies to the lower of your actual fee or the hourly rate cap. Any amount above the cap is yours to cover in full, before the percentage even comes into it.

"I need to meet the activity test to get any CCS at all." That used to be closer to true, but it isn't the full picture any more. Since the 3 Day Guarantee started on 5 January 2026, every eligible family gets at least 72 subsidised hours a fortnight regardless of work or study hours. The general eligibility rules, residency, an approved service, your child's age, still apply on top of that.

"CCS and ACCS are the same thing." They're different payments. Standard CCS is the income-tested subsidy this calculator estimates. Additional Child Care Subsidy (ACCS) is a separate, targeted top-up for families facing temporary financial hardship, grandparent carers, families transitioning to work, or children at risk, it isn't modelled here. If your household budget is feeling the squeeze from childcare costs generally, it's worth reading our step-by-step guide to budgeting and building a small emergency fund for the weeks fees creep above what you've planned for.