How to Set Your Childcare Fees

Setting fees is one of the most consequential decisions an early childhood service makes, yet it is often done by instinct or by simply copying the centre down the road. Your fees underpin the wages you pay, the resources in your rooms, and the long-term viability of your service. Getting them right is not about charging as much as possible. It is about charging what your service genuinely costs to run well, in a way families understand and value.

This guide walks through the factors that should inform your fee decisions, why fees must reflect both quality and sustainability, and how to review and communicate them with confidence.

Start With Your Costs

Before you look at the market or anyone else, you need a clear picture of what it actually costs to deliver care. Wages and on-costs are by far the largest line item in early childhood education, and they are not negotiable when you are committed to quality. Beyond staffing, your costs include rent or mortgage, utilities, food, consumables, educational resources, insurance, compliance, training, and the administrative backbone that keeps everything running.

A fee that does not cover these costs with a reasonable margin is not a discount to families. It is a slow erosion of your ability to operate. Map every cost honestly, including the ones that are easy to forget, and treat that as your floor. Anything below it is unsustainable.

Understand Your Local Market

Your fees do not exist in isolation. Families compare, and they have options. Research what comparable services in your area charge, but do this with nuance. A long day care service in an affluent suburb with strong demand sits in a very different position from one in an area with surplus places and price-sensitive families.

Look at services that are genuinely comparable in age groups, hours, ratios, and offering. The goal is not to match the cheapest option or to undercut anyone. It is to understand the range families in your community are used to, so your decisions are informed rather than blind.

Decide on Your Positioning

Once you know your costs and your market, you can make a deliberate choice about where you sit. Are you positioning your service as a premium offering with exceptional educators, rich programs, and beautiful environments? Or as accessible, dependable care at a fair price? Both are legitimate, but they lead to different fee strategies.

Your positioning should be honest. Premium fees demand a premium experience that families can see and feel. If your fees say one thing and your service says another, families will notice, and trust is hard to rebuild.

Factor in Occupancy Goals

Fees and occupancy are linked. Set fees too high for your market and you may sit with empty places that earn nothing. Set them too low and you may fill quickly but struggle to fund quality. The right fee is the one that supports healthy, sustainable occupancy at a margin that lets you reinvest.

Think about your occupancy targets across age groups and days of the week. A nuanced approach, rather than a single flat number applied everywhere, often serves a service better.

Keep CCS Context in Mind

The Child Care Subsidy, administered by the Australian Government, shapes what families actually pay out of pocket. While you set your own fees independently, it helps to understand how subsidy arrangements affect affordability and how families plan their budgets. Being aware of this context lets you communicate more clearly with families about the difference between your headline fee and their likely out-of-pocket cost.

Why Fees Must Reflect Quality and Sustainability

It can feel kinder to keep fees low, but underpricing is rarely a favour to anyone. Fees that do not sustain your service eventually show up as stretched educators, reduced resources, deferred maintenance, and higher turnover. The quality families came for quietly declines.

Fees that reflect the true cost of excellent care protect the experience children receive and the conditions your team works in. A financially healthy service is a stable one, and stability is itself a form of quality that families deeply value.

This guide is general information, not financial advice.

Reviewing Your Fees

Fees are not set once and forgotten. Review them at least annually, in step with your budgeting, and revisit them whenever costs shift meaningfully, such as award wage changes or significant increases in your operating expenses. A regular, predictable review cycle is easier for everyone than infrequent, large corrections.

When you review, return to the same factors: your current costs, the local market, your positioning, and your occupancy. Small, considered adjustments handled consistently are far less disruptive than letting fees fall behind and then needing a sharp catch-up.

Communicating Increases to Families

How you communicate a fee change matters as much as the change itself. Give families plenty of notice, well before the new fees take effect. Be transparent about the reasons (whether rising wages, improved programs, or new resources) and connect the increase to the value families receive.

Avoid apologising for fees that genuinely reflect quality care. Instead, frame them around sustainability and the continued delivery of the experience families chose. Make yourself available for questions, and treat the conversation as part of an ongoing, trusting relationship rather than a one-off announcement.

Bringing It Together

Setting fees well is a balance of clear-eyed costing, market awareness, honest positioning, and a commitment to both quality and sustainability. Done thoughtfully, your fees become a quiet statement of confidence in the care you provide.

If you would like a fresh perspective on your fee strategy and overall financial health, get in touch or explore our performance audits & optimisation to make sure your service is positioned to thrive.