Childcare Fees Above the Hourly Cap
When your childcare provider charges more than the government's hourly fee cap, you pay the difference. This can significantly impact your weekly childcare costs.
Understanding the Gap
Your out-of-pocket costs consist of two parts:
- The regular gap: The portion of the capped fee not covered by CCS
- The above-cap amount: The full difference between your provider's fee and the cap
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A Worked Example
Let's say:
- Your provider charges $18/hour
- The hourly cap is $14.63 (CBDC, under school age)
- Your CCS percentage is 80%
Calculation per hour:
- Amount above cap: $18 - $14.63 = $3.37 (you pay this in full)
- CCS applies to: $14.63
- Subsidy received: $14.63 × 80% = $11.70
- Regular gap: $14.63 - $11.70 = $2.93
Total out of pocket per hour: $3.37 + $2.93 = $6.30
If your child attends 40 hours per week, that's $252 out of pocket instead of $117.20 if fees were at the cap.
Strategies to Consider
- Ask your provider for a fee breakdown to understand their hourly rate
- Compare fees across different providers in your area — switching centres may reduce your gap
- Factor in the above-cap amount when budgeting for childcare
- Use our CCS calculator to see how above-cap fees affect your weekly costs
To understand how the cap is set, see our guide on what the hourly cap is and why it matters. You can also compare your fees to the average childcare cost in Australia.
Key Takeaways
- Fees above the hourly cap are not subsidised at all
- This can add significantly to your weekly costs
- The above-cap amount comes entirely out of your pocket
- Knowing your provider's hourly rate helps you budget accurately
Frequently Asked Questions
Why do some centres charge above the cap?
Providers set their own fees based on their costs, location, staff ratios, and the services they offer. Premium services may charge more than the cap.
Is it worth switching to a cheaper provider?
This depends on many factors including quality, location, and availability. The financial difference may be significant, but quality of care is also important.
How can I find out if my fees are above the cap?
Divide your daily fee by the hours of care provided to get an approximate hourly rate. Compare this to the caps listed for your service type.
This is general guidance only. Report all changes (income, relationship, care arrangements) promptly via myGov. For personalised advice, contact Services Australia at 136 150 or visit servicesaustralia.gov.au/child-care-subsidy.
Hourly caps are indexed annually. For 2025-26: $14.63 (centre-based day care under school age), $13.56 (family day care), and lower for outside school hours care. Check current rates at servicesaustralia.gov.au/child-care-subsidy/rates.