Childcare Gap Fee Calculator — Australia 2026-27
Calculate the true childcare gap fee — the portion of your provider's daily fee above the CCS hourly rate cap ($15.19/hr for CBDC in 2026-27). See your actual daily out-of-pocket cost, effective CCS subsidy rate on the full fee, and annual gap fee impact. Covers CBDC, FDC, OSHC, and in-home care.
Working out the real cost of childcare after subsidies.
Gap fee = provider daily fee − (CCS hourly cap × session hours). The cap is $15.19/hr for CBDC, $14.08/hr for FDC, $13.30/hr for OSHC in 2026-27.
How Australian childcare gap fees are calculated
The 'gap fee' is the amount parents pay directly after Child Care Subsidy. Understanding how CCS interacts with daily/hourly fees reveals exactly what you'll pay out-of-pocket.
Gap fee formula
Gap fee = Total fee - CCS. CCS = min(hourly fee, CCS cap) × CCS rate × session hours. Hours above cap are 100% gap.
Why the hourly cap matters
CCS is calculated as a percentage of the cap, NOT your actual fee. At $18/hr centre fee vs the $15.19 CBDC cap: CCS covers 70% of $15.19 = $10.63/hr. You pay $18 - $10.63 = $7.37/hr out of pocket.
Session vs hourly pricing
Most Australian centres charge daily session rates (e.g. $160/day for 10-hour session = $16/hr). CCS recalculates based on hourly cap and actual hours. Shorter attendance may mean higher per-hour cost.
Weekly example
Child in CBDC 3 days/week at $160/day (10-hour sessions). Family income $120,000 (84% CCS in 2026-27). CCS per day: $15.19 × 10 × 0.84 = $127.60. Gap: $160 - $127.60 = $32.40/day. Weekly gap: $97.21. Annual (48 weeks): $4,666.
Gap fee examples by income and centre fee
Gap fee per day at $160/day CBDC (10-hour session, 2026-27)
| Family income | CCS rate | Subsidy/day | Gap/day |
|---|---|---|---|
| $60,000 | 90% | $136.71 | $23.29 |
| $100,000 | 88% | $133.67 | $26.33 |
| $150,000 | 78% | $118.48 | $41.52 |
| $200,000 | 68% | $103.29 | $56.71 |
| $300,000 | 48% | $72.91 | $87.09 |
| $538,520 or more | 0% | $0 | $160.00 |
CCS is 90% for family income up to $88,520, then drops 1 percentage point for every $5,000 of income above that, reaching 0% at $538,520.
Annual gap fees (3 days/week, 48 weeks)
| Family income | Gap/day | Annual |
|---|---|---|
| $60,000 | $23.29 | $3,354 |
| $100,000 | $26.33 | $3,791 |
| $150,000 | $41.52 | $5,979 |
| $200,000 | $56.71 | $8,166 |
| $300,000 | $87.09 | $12,541 |
How to reduce your childcare gap fee
Choose a centre with fees at or below the cap
CBDC cap is $15.19/hr (2026-27). At a $140/day centre (10hr session = $14/hr) you are under the cap. At $200/day ($20/hr), $4.81/hr above cap — 100% of this is gap regardless of CCS rate.
Use the second-child loading
Families with two children aged 5 or under get 30 percentage points higher CCS on the second child, capped at 95%. Second child substantially cheaper than first.
Compare LDC vs Family Day Care
FDC hourly cap ($14.08) is lower, but FDC fees are typically $9-13/hr — often at or under cap. This can mean zero gap fee for basic hours.
Reduce days attended
Working from home 1 day/week saves ~$2,500-4,500/year in gap fees. Flexible work significantly reduces total childcare spend.
Alternate partner schedules or grandparent care
Alternating care between partners or using grandparent care 1-2 days saves 20-40% of annual cost. Since the 3 Day Guarantee started on 5 January 2026, every eligible family gets at least 72 subsidised hours per fortnight with no activity test — you only need to report recognised activity (more than 48 hours a fortnight) to reach the 100-hour maximum.
FAQFrequently asked questions about childcare gap fees
What is a childcare gap fee in Australia?
Amount parents pay directly after CCS applied. Gap = Total fee - CCS. Depends on centre fees, CCS rate, hourly cap, and hours attended.
Why do I pay so much even with high CCS?
CCS calculated on the hourly cap ($15.19 CBDC), not your actual fee. If a centre charges $18/hr, the $2.81/hr over cap is 100% gap regardless of CCS percentage.
How do I calculate my gap fee?
Per day gap = Daily fee - (min(hourly fee, cap) × CCS rate × hours). $160/day at 10hr, 79% CCS: CCS = $120.00, gap = $40.00/day.
Can centres set fees above the cap?
Yes — the cap only limits CCS, not provider fees. Centres can charge any amount. Fees above cap = 100% gap fee. Many metro centres charge $15-20/hr.
Will the hourly cap increase?
Caps indexed annually to CPI. From 6 July 2026: CBDC (below school age) $15.19, FDC $14.08, OSHC/school age $13.30, in-home care $41.31 per family. Modest rises — fees at many metro centres outpace cap growth.
Are gap fees tax-deductible?
No. Australian individuals cannot deduct childcare. High Court ruled in 1972 (Lodge) that childcare is private expense. Some salary-packaging arrangements offer limited tax benefit via approved employers.
Where these figures come from
Child Care Subsidy hourly rate caps and income thresholds are drawn from the Department of Education and the DSS Family Assistance Guide. Income figures are drawn from the Australian Taxation Office (ATO), the Fair Work Commission (minimum wage and awards), and the Australian Bureau of Statistics (national earnings).
- CCS hourly rate caps (from 6 July 2026) — Department of Education — Child Care Subsidy and Family Assistance Guide 3.5.3 — CCS hourly rate caps.
- CCS family income thresholds — Family Assistance Guide 3.5.1 — CCS combined annual ATI.
- PAYG withholding & income tax rates — ATO — Individual income tax rates.
- Superannuation Guarantee rate — ATO — Super guarantee percentage.
- National minimum wage — Fair Work Ombudsman — Minimum wages.
- Average weekly earnings — ABS — Average Weekly Earnings.
- Medicare levy — ATO — Medicare levy.
Last checked: July 2026. Rates and thresholds are reviewed against the source of record each November, when annual adjustments for the following tax year are published.
Select the question that matches where you are right now.
The gap fee is the part of your childcare bill that no subsidy ever touches. It sits above the government's hourly rate cap and is paid entirely by your family. The three-segment chart shows exactly how your daily fee splits between gap fee, your share of the capped portion, and CCS subsidy.
Every dollar your provider charges above $121.52 for an 8-hour CBDC session (8 × the $15.19 cap) is gap fee — paid by you with no subsidy. Of the first $121.52 (the capped portion), the CCS pays your rate percentage and you pay the rest. Switch to Standard mode to see the side-by-side comparison against a provider charging at the cap — the annual difference is often $5,000–$15,000.
Your 76% CCS rate sounds generous. But if your centre charges $155/day for an 8-hour session, the CCS only covers $92.36/day — which is 59.6% of your $155 fee. The other 40.4% is your cost (gap fee + your share of capped portion). The "effective CCS rate" shown in your results is the true subsidy percentage on your full fee — often 15–25 percentage points lower than the headline rate.
At $155/day for 3 days/week over 50 weeks, the gap fee alone ($33.48/day) costs $5,022/year — on top of your contribution to the subsidised portion ($4,375/year). Total annual cost: $9,397/year. A provider charging at the cap ($121.52/day) would cost only $4,375/year at the same CCS rate — a saving of $5,022/year from the gap fee alone.
The effective CCS rate is what your CCS subsidy actually represents as a percentage of your full provider fee. It is almost always lower than your headline CCS rate.
The government quotes your CCS as a percentage (e.g. 76%). Most families assume this means 76% of their full bill is covered. It is not — it means 76% of the capped portion is covered. If your provider charges above the cap, the effective subsidy on your full fee is significantly lower. This calculator shows you the real number.
At a $121.52/day provider (at the cap for an 8-hour session): effective CCS = headline CCS rate (e.g. 76%). At $130/day: effective CCS = 76% × $121.52 ÷ $130 = 71.0%. At $155/day: effective CCS = 59.6%. At $180/day: effective CCS = 51.3%. Every extra dollar your provider charges above the cap reduces your effective subsidy rate proportionally.
Your effective CCS rate can only equal your headline rate when your provider charges at or below the cap. If your provider is at exactly $121.52/day and your CCS rate is 90%: effective rate = 90%. If your provider charges $123/day (just above cap): gap fee = $1.48/day, effective rate = 90% × $121.52 ÷ $123 = 88.9%. The gap fee is not just the missing subsidy on the above-cap portion — it is real money with no offset. Track it carefully on your invoices to understand your true childcare cost.
The gap fee can be dramatically reduced or eliminated by choosing the right provider. Here is how.
Use childcare.gov.au to search approved providers in your suburb and compare fees. Sort by fee. Look for CBDC providers charging $121.52/day or less for an 8-hour session (8 × the $15.19 cap) — these have zero gap fee. Community-run centres, local council services, and neighbourhood houses often sit at or below that level. Quality (ACECQA rated) services exist at every price point.
Switch to Advanced mode and enter the daily fee of a lower-cost alternative in your area. The provider comparison chart and saving calculation shows you exactly what you would save per year by switching. Even a $20–$30/day reduction can save $3,000–$5,000/yr after accounting for the gap fee structure.
Many family day care educators charge $9–$13/hr — at or below the $14.08/hr FDC cap, which works out to $112.64 for an 8-hour day. FDC typically has smaller child-to-educator ratios, more flexible hours, and home-like environments. The same ACECQA quality framework applies. For families currently paying large gap fees at high-fee centres, FDC can be a quality-equivalent option that eliminates the gap entirely.
Understanding your childcare invoice helps you verify the gap fee is calculated correctly and identify any discrepancies.
Your provider invoices you for the gross fee. The CCS is credited against this — paid directly by Services Australia to the provider. You pay only the gap: gross fee minus CCS credit. The invoice should clearly show: gross fee charged, CCS credit received, and family gap (your payment). If these three items do not reconcile, ask your provider to explain the calculation.
The CCS credit should equal: your CCS rate × min(daily fee, hourly cap × session hours). Check: CCS credit ÷ your CCS rate = the capped fee used. This should be $121.52 for an 8-hour CBDC session (if your provider charges at or above the $15.19/hr cap) or your actual lower fee. If the capped fee used is different from expected, contact Services Australia to verify your CCS entitlement is being applied correctly.
Providers occasionally apply CCS incorrectly: (1) Applying CCS to the gross fee instead of the capped fee — resulting in a smaller family payment than correct (rare — benefits you temporarily but will be reconciled); (2) Not applying CCS when the child was absent with a valid reason — CCS should still be paid for up to 42 absent days per year; (3) Applying the wrong CCS rate — your rate can change when your income estimate is updated; (4) Not crediting CCS after it clears from Services Australia — check your statement against the expected credit. Keep a simple spreadsheet: gross fee, expected CCS credit (your rate × cap), expected family payment. Flag any discrepancies with your provider within the fortnight.