A Nanny Now Costs More Than a Full-Time Minimum Wage Job Pays

How much childcare costs in Australia in 2026

Going Rate's typical prices use different units. Three days of long day care ($410) is the gross weekly fee before the Child Care Subsidy (CCS). Family day care ($280) is the weekly amount a family pays after a mid-range subsidy. A nanny ($62,500) and an au pair ($22,000) are full-year costs, and neither attracts CCS for most families.

Over a 48-week year, the gross long day care bill comes to about $19,700 before any subsidy. The family day care figure, already net of CCS, comes to about $13,400 over the same 48 weeks. One figure is before subsidy and the other after it, so they do not line up. Long day care is the main form of care. The Department of Education's June quarter 2026 report shows centre-based day care took $3.31 billion, or 85.1%, of Child Care Subsidy spending that quarter, out of $3.88 billion in total childcare subsidies.

Fees are still rising. The same report puts the average hourly fee across all care types at $13.90, up 3.8% on a year earlier, and $14.60 for centre-based day care. Children in centre-based care averaged 34.4 hours a week, and 989,100 families used approved care in the quarter, down 1.7% year on year.

A nanny costs more than a full-time minimum wage job pays

The Fair Work Commission lifted the National Minimum Wage to $26.44 an hour, or about $1,005 for a 38-hour week, from 1 July 2026, according to the Australian Public Service Commission's circular on the 2 June decision. Over 52 paid weeks that is about $52,250 a year before tax. A typical nanny ($62,500) costs the family about $10,000 more than that, or about a fifth more.

That comparison uses the worker's gross pay. The family pays the nanny out of after-tax income, so the salary needed to cover one is higher than the gap suggests. Nannies also fall outside CCS for almost every family. The subsidy's In Home Care stream, capped at $41.31 an hour per family in 2026-27, is limited to families who cannot use other approved care, the Department of Education says.

For a parent returning to work on or near the minimum wage, long day care and an au pair both cost less than the job pays before tax.

How the Child Care Subsidy is calculated

For 2026-27, families earning up to $88,520 get the maximum 90% subsidy, the Department of Education says. The rate "decreases by 1% for every $5,000 of income" above that, reaching 0% at $538,520. A family on $138,520 gets 80%. Families with a second child aged 5 or under get 95% on that child if family income is $146,437 or less, and a tapering higher rate above that income.

The percentage applies "to the hourly fee or the relevant hourly rate cap, whichever is lower", the department says. The 2026-27 caps are $15.19 an hour for centre-based day care and $14.08 for family day care, up from $14.63 and $13.56 in 2025-26. Caps rise with CPI each year.

Since 5 January 2026, the 3 Day Guarantee gives every eligible family at least 72 subsidised hours a fortnight, whether or not the parents work or study. Families with more than 48 hours of recognised activity a fortnight get 100 hours. Three 10-hour days a week uses 60 of the 72 guaranteed hours.

What three days of long day care costs after the subsidy

The typical gross fee for three days ($410) works out to about $137 a day. On a 10-hour session that is about $13.70 an hour, below the 2026-27 centre cap of $15.19, so the cap does not reduce the subsidy. A family on 90% CCS ends up paying 10% of the fee, about $41 a week or about $2,000 over 48 weeks. At 80%, the weekly share doubles to about $82.

Families pay more than that during the year. Services Australia says it will "automatically withhold 5 per cent of your CCS" until the family's income is confirmed, so a 90% family pays about $59 a week at the counter and gets the balance back after the end of the financial year. Services Australia reports that almost 80% of families got a top up or no change at reconciliation.

The cap bites where fees run higher. In the June quarter of 2026, 56.7% of centres charged at or under the 2025-26 cap of $14.63, the Department of Education reports, and average centre fees were above the cap in the ACT ($16.50), WA ($14.90), NSW ($14.85) and Victoria ($14.65). At the ACT average, a family on the top rate had about 80% of the fee covered. The ACCC's 2023 childcare inquiry found the cap had "limited influence on reducing childcare fees".

Family day care costs less but the sector is shrinking

Family day care ($280) is care by an educator for a small group in their own home. Going Rate's figure is the weekly out-of-pocket cost after a mid-range subsidy. The Department of Education puts the average family day care fee at $13.95 an hour in the June quarter of 2026, below the centre-based average of $14.60.

The family day care cap is lower, at $14.08 an hour in 2026-27. Only 45.2% of family day care services charged at or under the previous $13.56 cap in the June quarter, so families at the other 54.8%, where the average fee sat above the cap, got less than their full percentage of the fee. Family day care services fell 8.5% in a year, so finding a place can be harder in some areas.

An au pair costs about a third of a nanny

A typical au pair ($22,000) costs about 35% of a typical nanny ($62,500) and about 42% of a full-time minimum wage year. It costs about $2,300 more a year than three days of long day care at the gross fee over 48 weeks, and an au pair lives in, so the family also provides a room and meals.

Since 1 January 2024, working holiday makers employed as a nanny or au pair can stay with one family beyond six months without asking permission, Home Affairs says. Outside the exempt sectors, a working holiday maker can work for one employer for six months at most unless Home Affairs grants permission.

An au pair suits families who earn too much for a useful subsidy. A family at $538,520 or more gets no CCS. At the typical daily rate, five days of long day care for that family would cost about $32,800 over 48 weeks, well above the cost of an au pair.

The third day is where a second income gets thin

Three days a week at the minimum wage pays about $31,350 a year before tax. The gross long day care bill for those three days is about 63% of that. A couple where both parents earn the minimum wage, one full time and one on three days, earns about $83,600 together, under the $88,520 threshold for the top 90% rate, so CCS covers most of the fee.

Tax, the income taper and lost family payments still eat into each extra day. Using 2018 subsidy settings, the e61 Institute estimated that a mother on the minimum wage with a minimum-wage partner lost all the extra pay from a third day plus some of her other earnings, a workforce disincentive rate of 125%. Subsidies have risen since 2018, so the 125% describes 2018 settings and does not price a third day in 2026. e61's initial results found "no labour supply response" from mothers of young children to the 2018 reform.

Most mothers of young children work anyway. The ABS found the mother was employed in 71% of couple families whose youngest child was 0 to 4 in June 2025, against 92% of fathers. The Productivity Commission's 2024 report recommended a 100% subsidy for families earning up to $80,000. The government has since brought in the 3 Day Guarantee and kept the 90% top rate and the taper.

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