How is the Child Care Subsidy calculated?

Your CCS rate is a percentage (0–90%) applied to your fee per hour, capped at the Government's hourly cap. The percentage is determined by your combined family ATI — 90% if you earn $88,520 or less, dropping by 1% for every extra $5,000 of family income, reaching 0% at $538,520. The percentage is then applied to the LOWER of your actual hourly fee or the Government's hourly cap ($15.19/hr for centre-based day care under school age, $14.08/hr for family day care in 2026-27).

What is the 3 Day Guarantee?

From 5 January 2026, every CCS-eligible family is guaranteed at least 72 subsidised hours of care per fortnight (equivalent to 3 days a week) regardless of recognised activity level. It replaced the old activity test for the BASE entitlement. To reach the higher 100-hour tier you still need to meet the activity test (paid work, study, volunteering, unpaid work in a family business, actively looking for work, or paid parental leave all count) — but no one gets cut off entirely anymore.

What income does Centrelink use to calculate CCS?

Centrelink uses your family's adjusted taxable income (ATI), not just your taxable income from the ATO. ATI adds back reportable fringe benefits, reportable super contributions, tax-free pensions, foreign income, investment losses, and child support paid. For many families ATI is the same as taxable income; for those salary-sacrificing or with packaged benefits, ATI is materially higher. Verify yours with our ATI calculator before relying on a CCS estimate.

Do I get a higher CCS rate for my second child?

Yes, if you have two or more children under 6 in care, the second and any younger children get a higher CCS rate — up to 95% (instead of the standard 90%), depending on your income band. The "second child" is the second-OLDEST child under 6; the oldest under-6 gets the standard rate.

Why does my CCS sometimes get capped?

Two caps matter. First, the hourly fee cap — if your centre charges above the $15.19/hr centre-based cap (or the corresponding cap for OSHC / family day care / in-home care), anything above that isn't subsidised regardless of your %. Second, the hours cap — 72hr/fortnight under the 3 Day Guarantee, 100hr/fortnight if both partners do 49+ hours of recognised activity. If your child is enrolled for more hours than your cap allows, the excess hours are at full fee.

When does the CCS withholding get refunded?

Centrelink withholds 5% of your CCS by default throughout the year as a buffer against income surprises. After EOFY (once you and partner lodge tax returns), they reconcile the withheld amount against your actual entitlement. If your income matched the estimate, the 5% comes back as a lump-sum refund — usually October–December. If you over-claimed, the 5% absorbs the gap first. See our CCS reconciliation guide for full detail.

How this calculator is built

Built by an Australian Chartered Accountant — the same engine the paid NestWise dashboard runs. Every rate table is verified against the source below every 1 July, 20 March, and 20 September and covered by a 200+ scenario regression suite.

Sources: Services Australia — Child Care Subsidy · DSS Family Assistance Guide § 3.5

How the Child Care Subsidy is calculated

Five inputs decide how much Child Care Subsidy your family receives:

Combined family income — both partners’ taxable income added. Drives your subsidy percentage on the standard taper. Higher rates apply for lower-income families with two or more children in care.
Activity hours per fortnight — the lower-earning parent’s recognised activity (paid work, study, volunteering, looking for work) sets a cap on how many hours of subsidised care your family gets.
Hourly fee charged by your provider — the actual fee per hour. Capped for subsidy purposes; if your provider charges above the cap, you pay the difference in full.
Type of care — centre-based, family day care, outside-school-hours care (OOSH), and in-home care all have different hourly caps.
Children’s ages — the cap drops once the child reaches school age (5+). Kids 13+ are not CCS-eligible.

The standard rate vs the higher rate

Families on the standard rate get up to 90% subsidy on the first income bracket, tapering down across higher income bands. Families with TWO OR MORE children under 6 in care can qualify for the higher rate — up to 95% subsidy on the younger child(ren). The calculator above applies whichever rate gives you more.

The 5% withholding

Centrelink holds back 5% of every CCS payment as a buffer for end-of-year reconciliation. You don’t lose this — it gets returned at recon if your actual income matches your estimate, or used to offset any debt if your actual income was higher than estimated.

Paid NestWise members get a live CCS Reconciliation Projection that warns BEFORE EOFY whether you’re tracking to owe or to receive at recon — with time to update your estimate.

Worked example: the Lee family

James and Priya Lee have two kids in centre-based care: Maya (age 4) and Sam (age 1). Combined family income $115,000 (both work part-time). Both kids attend 3 days/fortnight at $155/day, 10 hours per day. Priya works ~30 hours per fortnight, James works ~60 hours per fortnight.

Step 1: Standard subsidy rate

On $115,000 combined, the standard subsidy rate tapers down from the maximum.For 2026-27 (1 July 2026 – 30 June 2027) the standard rate at this income lands around 85% — the calculator above gives you the exact figure when you enter your number.

Step 2: Higher rate for the younger child

Because the Lees have two kids under 6 in care, Sam (age 1) qualifies for the higher rate (~95% at this income). Maya stays on the standard rate (~85%).

Step 3: Hourly fee + cap

$155/day ÷ 10 hours = $15.50/hr. Centre-based cap for under-school-age children is ~$15.19/hr in 2026-27. Subsidy is calculated on the LOWER of the two: $15.19/hr for both kids.

Step 4: Participation test

Priya is the lower-earning partner at 30 hrs/fn of recognised participation — that puts her in the “72–99 hrs/fortnight” band, which gives 72 hrs of subsidised care per child. Each kid uses 30 hrs (3 days × 10hr) — well inside the cap, so the participation test isn’t binding here.

Step 5: Annual subsidy + out-of-pocket

Sam’s subsidy: $15.19/hr × 10hr × 95% × 3 days × 26 fortnights ≈ $11256.00/yr
Maya’s subsidy: $15.19/hr × 10hr × 85% × 3 days × 26 fortnights ≈ $10035.00/yr
Total annual subsidy: ~$21291.00/year
(Less the 5% withholding held back during the year, returned at recon if no debt.)

Run the Lees’ numbers in the calculator above for the exact figure with current rates — or your own numbers.

How NestWise compares to the Services Australia calculator

The Services Australia online Payment and Service Finder will tell you whether you qualify and roughly what you’ll get. The NestWise CCS calculator implements the same subsidy formula with rates source-traced to the same Services Australia rate tables. Figures should match within rounding.

What NestWise surfaces that the official tool doesn’t

Per-child breakdown. Standard rate vs higher rate, applied correctly when you have 2+ kids under 6. Many basic calculators apply one rate to all kids.
Out-of-pocket figure inline. We show the gap between provider fee and capped subsidy, so you see what you’ll actually pay each fortnight.
Participation-test impact visible. If your work/study hours are limiting your subsidised care hours, the calculator surfaces it — the official tool just returns a lower number without saying why.
Live recalc. Drop a day, change a fee, add a partner’s extra hours — watch the figure move. The official tool requires re-submission.
5% withholding broken out. Most calculators report subsidy gross; we show the withholding portion separately so the recon picture is clear.

What NestWise doesn’t model

Additional Child Care Subsidy (ACCS). Top-up for families in temporary hardship, transitioning to work, with at-risk children, or experiencing domestic violence. Apply directly through Services Australia.
Participation-test exemptions for grandparent carers, foster carers, illness, or training programs — the calculator assumes the standard participation test.
Mid-year fee changes from the provider — the calculator runs on the fee you enter; if your fee changes, re-run with the new figure.

For everyday scenario-running (“what if I work an extra day?”, “what if we drop OOSH?”), NestWise is faster. For the formal subsidy assessment, lodge through myGov → Centrelink.

Five common mistakes when estimating CCS

Underestimating income for the year. The #1 cause of EOFY recon shock. Centrelink uses your estimate to pay subsidy; if your actual income is higher, you owe at recon. Build in pay rises, bonuses, partner shift increases.
Not accounting for the hourly cap. If your provider charges $18/hr but the cap is $15.19/hr, you only get subsidy on the capped amount. The $2.81/hr difference is fully your cost.
Mixing up participation hours and care hours. Participation hours = what the lower-earning parent does (work / study / volunteer / looking for work). Care hours = what the child uses. They set independent limits.
Forgetting school-age cap reduction. Once a child turns 5 (or starts school), the hourly cap drops to the school-age rate — subsidy on OOSH and vacation care is lower per hour than centre-based for younger kids.
Missing the higher-rate trigger. If you have 2+ children under 6 in CCS-eligible care, the younger child(ren) may qualify for the higher rate (up to 95%). Many families don’t realise they qualify.

When to re-estimate your CCS

CCS rates and thresholds re-index every 1 July. Beyond that, you should re-run the calculator when:

Your income changes > $5,000. Pay rise, partner returns to work, dropping a day, taking parental leave. Update your estimate with Centrelink to avoid a recon debt.
A child ages out or in. Turning 5 changes the hourly cap. Turning 13 ends CCS eligibility. A new baby may bring you into the higher-rate bracket.
Care arrangement changes. Changing providers, switching from centre to family day care, adding holiday care, dropping OOSH.
Your hours shift. Returning to work, dropping back, starting study. The participation-test cap moves in steps (Nil / 8-16 / 16-48 / 48+ hrs per fortnight).
Your provider raises fees. If your hourly fee crosses above the cap, your out-of-pocket changes more than your subsidy does.

Run the calculator above with your new numbers, then read the full CCS guide before updating your estimate via myGov.

Child Care Subsidy Calculator 2026-27

1 July 2026 – 30 June 2027

Work out your Child Care Subsidy (CCS) for each child, and what is left for you to pay, using the 2026-27 rates.

The same questions the government’s Starting Blocks estimator asks, worked out with the same engine NestWise members use. Free, no account needed.

Your household

Is it just you, or you and a partner?

Children in care

Child 1

Birth month and year

Type of care

Daily fee

Before any subsidy.

Hours per session

As the service charges it.

Days a fortnight

Is this child Aboriginal or Torres Strait Islander?

An Aboriginal or Torres Strait Islander child gets up to 100 subsidised hours a fortnight, whatever the adults’ hours.

To see the estimate, we still need:

whether you have a partner
your yearly income
your hours a fortnight (or tick exempt)
Child 1: birth month and year
Child 1: type of care
Child 1: daily fee
and 3 more

Not financial advice · 2026-27 rates from Services Australia · NestWise estimate, check it before relying on it