How is Child Care Subsidy Calculated?
Updated for 2025–26 · Rates effective 7 July 2025
The three factors that determine your CCS
Your Child Care Subsidy is calculated by combining three separate factors. Getting any one of them wrong leads to an inaccurate estimate — which is why most online calculators fall short.
Step 1: Your CCS percentage (income test)
Your CCS percentage is determined by your combined family Adjusted Taxable Income (ATI). ATI is not the same as your gross salary — it includes reportable fringe benefits, reportable employer super contributions, and net investment losses.
| Combined ATI | CCS % |
|---|---|
| $0 – $85,279 | 90% |
| $85,280 – $135,279 | 80% – 89% |
| $185,280 – $235,279 | 60% – 69% |
| $335,280 – $385,279 | 30% – 39% |
| $535,280+ | 0% (not eligible) |
The rate tapers by exactly 1 percentage point for every $5,000 of income above $85,279. See the full income threshold table for every step.
Step 2: Your subsidised hours (activity test)
From 5 January 2026, the 3-Day Guarantee applies. All eligible families receive a minimum of 72 hours of subsidised care per fortnight regardless of activity level. If either parent does more than 48 hours of recognised activity per fortnight, the entitlement increases to 100 hours.
Recognised activities include paid work, study, volunteering, job search, parental leave, and disability-related activities. Read the full activity test guide.
Step 3: Rate caps and your gap fee
The government sets an hourly rate cap for each care type. Your subsidy is calculated on the lower of your provider's fee or the cap.
| Care type | 2025–26 rate cap |
|---|---|
| Centre-Based Day Care (under school age) | $14.63/hr |
| Centre-Based Day Care (school age) | $12.81/hr |
| Outside School Hours Care | $12.81/hr |
| Family Day Care | $13.56/hr |
| In-Home Care | $39.80/family |
Worked example
Scenario
Family ATI: $120,000 · One child under school age in CBDC · Provider fee: $15.00/hr · 30 hrs/week in care · Both parents work (30 hrs activity each/fortnight)
CCS rate: 90% − floor(($120,000 − $85,279) / $5,000) = 90% − 6 = 84%
Subsidised hours: Lower activity = 30 hrs/fortnight → 3-Day Guarantee → 72 hrs/fortnight (36 hrs/week)
Effective fee: min($15.00, $14.63) = $14.63/hr (rate cap applies)
Hourly subsidy: $14.63 × 84% = $12.29/hr
Hourly gap fee: $15.00 − $12.29 = $2.71/hr
Weekly subsidy: $12.29 × 30 hrs = $368.70/week
Weekly gap fee: $2.71 × 30 hrs = $81.30/week
5% withholding: $368.70 × 5% = $18.44/week
Actual weekly out-of-pocket: $81.30 + $18.44 = $99.74/week
The 5% withholding — what most calculators miss
Services Australia withholds 5% of your CCS each week. This is reconciled at tax time — if your income estimate was accurate, you'll get it back. But it means your real weekly gap fee is higher than the headline subsidy % implies. Our calculator always shows both figures so you can budget accurately.