How is my CCS percentage determined?

Your CCS percentage is determined by your combined family income (both parents' taxable income). Families earning under $83,280 receive 90% CCS. The rate tapers down as income rises, reaching 0% for families earning above $530,000. The rate is calculated by Services Australia on an annual basis, based on your estimated income — and reconciled at tax time if your actual income differs.

What is the hourly rate cap and why does it matter?

The CCS only subsidises fees up to a government-set hourly rate cap — approximately $12.08/hr for long day care in 2025–26. If your centre charges $15/hr, only $12.08 is subject to the subsidy; the $2.92/hr gap is paid by you in full, regardless of your subsidy percentage. This 'gap fee' can add significantly to your out-of-pocket cost at premium centres.

What is the activity test for CCS?

To receive CCS, both parents must meet a minimum activity test — meaning both parents must be working, studying, training, volunteering, or actively job-seeking for at least some hours each week. Families where one parent has no qualifying activity receive a capped maximum of 24 hours of subsidised care per fortnight, regardless of income. Families where both parents have 100+ hours of qualifying activity per fortnight are not subject to any fortnightly hour cap.

Can I claim CCS if only one parent works?

Yes — but with limits. If one parent has zero activity hours, the family still receives CCS but is capped at 24 hours of subsidised care per fortnight (about 2.4 days per week). If the stay-at-home parent has any qualifying activity (even volunteering for 8+ hours/fortnight), the cap increases. Check the Services Australia activity test table for exact hour thresholds.

How is CCS calculated if I have multiple children in care?

From 2023, the Australian Government introduced Higher CCS for families with multiple children under 5 in childcare simultaneously. The youngest child gets standard CCS; subsequent children aged 5 and under receive a higher rate — up to 95% for lower-income families with multiple children. The higher CCS applies only when both children are in care at the same time.

How do I claim the Child Care Subsidy?

You claim CCS through your myGov account linked to Centrelink (Services Australia). You need to enrol your child with an approved childcare provider, submit an income estimate, and complete the activity test declaration. Once approved, the subsidy is paid directly to your childcare provider, reducing your invoiced amount. You should update your income estimate during the year if your income changes significantly to avoid a debt at tax time.

CCS Calculator Explained — How the Child Care Subsidy Is Worked Out

The Child Care Subsidy calculation involves three variables most parents don't fully understand: your income-based percentage, the hourly rate cap, and the activity test. Here's exactly how it works — with worked examples.

The three variables that determine your CCS

Your out-of-pocket childcare cost after CCS is determined by three things — and understanding all three is essential for accurate budgeting:

Variable 1

Your subsidy %

Set by combined family income. Ranges from 90% (under $83,280) to 0% (above $530,000). This is the percentage applied to the capped fee.

Variable 2

Hourly rate cap

~$12.08/hr for long day care. CCS is only applied to fees up to this cap. Fees above the cap are paid in full — this is the 'gap fee'.

Variable 3

Activity test

Both parents need qualifying activity hours. Zero activity = maximum 24 subsidised hours/fortnight, regardless of income.

Income thresholds and subsidy rates (2025–26)

The following rates apply to your combined family income (both parents' taxable income). The subsidy tapers gradually within each income band.

Combined family income	CCS rate	At $155/day fee — your daily cost
Up to $83,280	90%	≈$16/day + gap fee
$83,280 – $133,280	90% → 80%	≈$16–$24/day + gap fee
$133,280 – $183,280	80% → 70%	≈$24–$36/day + gap fee
$183,280 – $353,680	70% → 50%	≈$36–$60/day + gap fee
$353,680 – $530,000	50% → 0%	≈$60–$121/day + gap fee
Above $530,000	0%	Full fee ($155+/day)

"Gap fee" refers to fees above the hourly rate cap (~$12.08/hr = $120.80/10hr day), paid in full regardless of subsidy rate. Daily cost estimates assume the centre charges $155/day with a standard 10-hour day.

How to calculate your actual daily out-of-pocket cost

The formula looks complicated — but it's straightforward once you understand the cap:

Step-by-step calculation

Identify the hourly rate cap

~$12.08/hr × 10 hours = $120.80/day cap

Calculate the gap fee

Daily fee − cap = gap fee (paid in full)

Apply your CCS % to the capped amount

(1 − CCS%) × $120.80 = your co-contribution on capped fees

Add gap fee + co-contribution

Your total daily out-of-pocket cost

Worked examples at three income levels

Example 1: $90,000 combined income

CCS rate: 88%

Daily fee: $145/day

Gap fee (above cap): $145 − $120.80 = $24.20

Co-contribution (on capped): 12% × $120.80 = $14.50

Daily out-of-pocket: $14.50 + $24.20 = $38.70/day

Weekly: $194/week (5 days) · Annual: $9,300/year

Example 2: $150,000 combined income

CCS rate: 75%

Daily fee: $155/day

Gap fee (above cap): $155 − $120.80 = $34.20

Co-contribution (on capped): 25% × $120.80 = $30.20

Daily out-of-pocket: $30.20 + $34.20 = $64.40/day

Weekly: $322/week (5 days) · Annual: $15,450/year

Example 3: $250,000 combined income

CCS rate: 57%

Daily fee: $175/day

Gap fee (above cap): $175 − $120.80 = $54.20

Co-contribution (on capped): 43% × $120.80 = $51.95

Daily out-of-pocket: $51.95 + $54.20 = $106.15/day

Weekly: $531/week (5 days) · Annual: $25,500/year

These examples show how the gap fee can dominate your out-of-pocket cost at higher-fee centres. Choosing a centre that charges at or near the CCS cap significantly reduces your costs — particularly for families on lower incomes who have a high subsidy rate but still face a large gap fee.

The activity test — hours of qualifying activity

The activity test requires each parent to have a minimum number of hours of qualifying activity per fortnight to access subsidised care beyond the 24-hour cap. Qualifying activities include paid work, study, training, volunteering, and active job seeking.

Each parent's activity hours (fortnightly)	Subsidised hours (child, per fortnight)
0 hours (no activity)	24 hours/fortnight (about 2.4 days/week)
8–16 hours	36 hours/fortnight
17–48 hours	72 hours/fortnight
49–100 hours	100 hours/fortnight
100+ hours	No fortnightly hour cap

The activity test applies to the parent with the lower activity hours (the "lower activity" parent). One parent can have high activity hours; the subsidy is capped by the lower parent's hours.

Calculate your actual CCS outcome

The Return to Work Calculator uses this exact methodology. Enter your income, childcare fees, and days per week — it calculates your CCS rate, applies the hourly cap, accounts for the activity test, and shows you your true weekly out-of-pocket cost alongside your net income from returning to work.

For a broader understanding of the CCS beyond the calculation mechanics, read the full Child Care Subsidy guide.