How to use this calculator
Select your childcare type from daycare center, home daycare, nanny, or au pair. Then enter your child's age, your region, and whether you need full time or part time care. The calculator uses these inputs along with regional cost data to estimate your monthly and annual childcare expenses.
If you have multiple children, you can add each child separately to see the total family cost. The results show your estimated monthly payment, annual cost, and what percentage of your household income goes to childcare. This percentage is a key planning metric because federal guidelines consider childcare affordable when it stays below 7% of household income.
The calculator also highlights available tax benefits including the Child and Dependent Care Tax Credit and Dependent Care FSA savings. Review these figures when comparing care options because the after tax cost can differ significantly from the sticker price, especially for families in higher tax brackets.
Average childcare costs by type
| Childcare Type | Monthly Cost | Annual Cost | Best For |
|---|---|---|---|
| Daycare Center | $1,200 to 1,800 | $14,400 to 21,600 | Structure & socialization |
| Home Daycare | $800 to 1,200 | $9,600 to 14,400 | Smaller groups, lower cost |
| Nanny | $2,500 to 3,500 | $30,000 to 42,000 | Personalized, in-home care |
| Au Pair | ~$2,100 | ~$25,200 | Cultural exchange, flexible hours |
Tax benefits for childcare
Two federal tax benefits can significantly reduce your childcare costs. The Child and Dependent Care Tax Credit allows you to claim a percentage of qualifying childcare expenses on your tax return , up to $3,000 for one child or $6,000 for two or more. The credit percentage ranges from 20% to 35% depending on your income.
If your employer offers a Dependent Care Flexible Spending Account (DCFSA), you can set aside up to $5,000 per year in pre-tax dollars to pay for childcare. This reduces both your income tax and payroll taxes. You cannot use the same expenses for both the tax credit and the FSA, so compare which option saves you more based on your tax bracket.
Many states offer additional childcare tax credits or deductions on top of the federal benefits. Check your state's tax authority website for eligibility requirements and filing instructions.
How to reduce childcare costs
Nanny sharing is one of the most effective strategies for reducing childcare costs. By partnering with another family, you can split a nanny's salary while your children still receive attentive, in-home care. Most nanny shares save each family 25-40% compared to hiring a nanny individually.
Flexible work arrangements can also make a big difference. If one parent can work from home or adjust their hours, switching from full-time to part-time childcare can save 40% or more. Some employers also offer childcare subsidies, backup care programs, or on-site childcare as part of their benefits package.
For families with lower incomes, the Child Care and Development Fund (CCDF) provides subsidies through state agencies. Eligibility varies by state, but many families earning up to 85% of the state median income qualify for assistance that can cover a significant portion of childcare costs.
Frequently asked questions
How much does daycare cost per month?
The average cost of daycare in the United States ranges from $1,200 to $1,800 per month for full-time care, depending on your region and the child's age. Infant care typically costs 20-25% more than toddler or preschool care. In high-cost areas like the Northeast and West Coast, daycare can exceed $2,000 per month.
Is a nanny or daycare more expensive?
A nanny is typically more expensive than daycare, costing $2,500 to $3,500 per month compared to $1,200 to $1,800 for daycare centers. However, if you have multiple children, a nanny can become more cost-effective since the rate doesn't double per child the way daycare tuition does.
What percentage of income should childcare cost?
The U.S. Department of Health and Human Services considers childcare affordable when it costs no more than 7% of household income. However, the national average is much higher, most families spend 10-30% of their income on childcare, with infant care in some states costing more than in-state college tuition.
What tax benefits are available for childcare expenses?
Two main tax benefits can offset childcare costs: the Child and Dependent Care Tax Credit (up to $3,000 for one child or $6,000 for two children in qualifying expenses) and the Dependent Care FSA (up to $5,000 pre-tax annually through your employer). Some states also offer additional childcare tax credits or deductions.