How much Child Care Subsidy will you get?
Your CCS percentage is set by your combined family income for the financial year. Services Australia uses adjusted taxable income, which is your taxable income plus items such as reportable superannuation contributions and fringe benefits. For a couple, both partners' incomes are combined. The percentage is then applied to the lower of your provider's hourly fee and the hourly rate cap, for your subsidised hours only. Three numbers therefore decide your bill: the percentage, the cap, and the hours.
The 2026-27 income scale
| Combined family income | Standard CCS percentage |
|---|---|
| Up to $88,520 | 90% |
| $88,521 to below $538,520 | Tapers down 1% for every $5,000 above $88,520 |
| $538,520 or more | 0% (not eligible) |
The taper is a formula, not a set of steps. Services Australia does not wait for a complete $5,000 band before reducing the rate; the result is rounded to two decimal places. For example, at $130,000 of combined family income the calculation is 90% minus ($130,000 minus $88,520) divided by $5,000, which is 90% minus 8.30%, giving 81.70%. At $188,520 the rate is 70%, at $288,520 it is 50%, at $388,520 it is 30%, and at $488,520 it is 10%. The thresholds are indexed each July, so always check the current financial year's figures rather than quoting last year's.
Worked example: the percentage and the gap
Suppose a family with combined income of $130,000 uses centre based day care charging $16 an hour for a child below school age. The 2026-27 cap is $15.19, so the subsidy is calculated on $15.19, not $16. At 81.70%, the subsidy is $12.41 an hour. The family pays the gap of $2.78 an hour, plus the $0.81 an hour by which the fee exceeds the cap, for a total out-of-pocket cost of $3.59 an hour before any withholding adjustment. If the same centre charged $14 an hour, below the cap, the subsidy would be 81.70% of $14, which is $11.44, and the gap would be $2.56 an hour. The lesson is practical: a centre that charges above the cap costs you the full excess, whatever your percentage.
Higher CCS for second and younger children
If you have more than one child aged 5 or under in care, your second and younger children can receive a higher rate. In 2026-27 the higher rate is up to 95% for family income up to $146,437, tapering down to 80% and then to 50%, with the higher rate ending at $370,727. Your eldest child aged 5 or under receives the standard rate. A school-age sibling does not trigger the higher rate for a younger child on their own. In the June quarter of 2026, 183,590 families accessed this higher multi-child rate, so it is a large part of the system, not a footnote.
Do not use last year's thresholds
Several popular calculators still show the 2025-26 figures, with a maximum-rate threshold near $83,000 and a cut-off near $533,000. Those figures are out of date for 2026-27. The current figures are $88,520 for the maximum 90% rate and $538,520 for the cut-off. If a calculator gives you a percentage that looks a few points too low, check which financial year it is using.
Sources: Services Australia, Child Care Subsidy income test guidance; Department of Education, Child Care Subsidy data report, June quarter 2026.