Childcare Cost as a Percentage of Income (2026)

The 7% Affordability Benchmark and What Changed in 2026

The most-quoted definition of affordable child care is no more than 7% of household income. It comes from the U.S. Department of Health and Human Services (HHS): its 2016 Child Care and Development Fund (CCDF) rule set 7% of family income as an optional benchmark for the copayments paid by families who receive child care subsidies, based on 2011 Census Bureau data showing that families spent, on average, 7% of their income on child care. A 2024 rule turned that benchmark into a cap.

The cap is gone. HHS rescinded it in a final rule published May 12, 2026, effective July 13, 2026, and said it "will not be recommending a benchmark for copayments at this time," calling the 2011 data outdated. Copayment limits are now up to each state. As of March 2026, 31 states, the District of Columbia and five territories capped copayments at 7% of income or less.

So 7% is no longer an official federal standard, but it is still the most widely quoted yardstick, and most states still apply it to their own subsidy programs. That is why the calculator measures against it. Average infant daycare ($17,260 a year, per Care.com's 2026 Cost of Care Report) stays under 7% only for households earning about $246,600 or more.

Infant Daycare as a Share of Income

Using the national average infant daycare cost of $17,260 a year, before and after the best 2026 federal tax breaks for a married couple with one child:

National average tuition for full-time infant care at a center (Care.com 2026 Cost of Care Report); fees not included. "After tax breaks" assumes married filing jointly, an employer Dependent Care FSA, and the calculator's federal tax model. Affordability labels are ours: above 7% exceeds the benchmark, above 10% is a high burden and above 15% is a severe burden. In high-cost metros the percentages are far higher; use the calculator above with your metro.

Share of Income by Type of Care

The type of care can matter as much as income. These are national-average yearly costs as the calculator estimates them, including fees, sibling discounts and a nanny's payroll taxes, and their share of a $100,000 household income:

National averages for full-time care from our 2026 cost data (see our methodology). Nanny and nanny-share figures include about 10.25% in employer payroll taxes; the au pair figure is one flat yearly cost for any number of children.

With one child, in-home daycare (13.8% of a $100,000 income) and a center (17.6%) are the lowest-cost options. With an infant and a preschooler, per-child prices add up while per-household prices barely rise, so an au pair (22.0%) costs less than two center spots (30.6%).

Why Childcare Hits Lower Incomes Hardest

Childcare is priced on the cost of care, not on what families earn, so the same $1,438 monthly bill takes 34.5% of a $50,000 income but 11.5% of a $150,000 one. That regressive math is why families earning roughly $50,000 to $80,000 often face the hardest squeeze: many earn too much for subsidies yet too little to absorb full-price care.

Tax breaks help, but they are worth fewer dollars further down the income scale. For a married couple with one infant in average-priced daycare, the best federal combination saves about $1,324 a year at $50,000 and $2,224 at $200,000, because FSA savings grow with your tax bracket. At the lowest incomes the gap is wider still: the credit can't exceed the federal income tax you owe, so a family that owes little tax gets little from it.

This is also why a second earner's take-home pay can be largely offset by childcare in the early years. See our work vs. stay-home analysis.

How to Bring Your Percentage Down

• Check subsidies first. Federal rules let states help families earning up to 85% of the state median income, though many set lower limits. Check with our subsidy eligibility calculator or the guide to finding your state's program.
• Use pre-tax dollars. If your employer offers a Dependent Care FSA, size it with the DCFSA calculator and compare it with the child care tax credit calculator. Our FSA vs. credit guide explains which wins at your income.
• Price a different type of care. Nationally, in-home daycare runs about 21% less than a center for an infant ($13,690 vs. $17,260), and a nanny share costs about a third less than a solo nanny. See in-home daycare costs or run the numbers with the nanny share calculator.
• Ask about employer help. Some employers subsidize care or offer backup care. See employer childcare benefits.
• Compare your local market. Look up costs in 44 metros or get a zip-code estimate from the main childcare cost calculator.

How the Calculator Works

Your share of income is your yearly childcare cost divided by your household income before taxes. Enter your own bill, or let the calculator estimate one for the national average or any of the 44 metro areas we track.

• Cost estimates use the same 2026 figures as our main calculator, built from Care.com's 2026 Cost of Care Report and local rates and updated in October 2026 (see our methodology). They assume full-time care and add yearly registration and supply fees ($350 per child at a center, $150 at an in-home daycare, $100 for a nanny share) and sibling discounts (10% for a second child at a center and 15% for a third or more; 5% and 10% at an in-home daycare). A nanny or nanny share is priced per household: each extra child adds about 5%, plus about 10.25% in employer payroll taxes. School-age estimates include full-day summer care.
• Tax savings follow 2026 federal rules. Up to $7,500 of care paid through a Dependent Care FSA escapes federal income tax and the 7.65% Social Security and Medicare tax. The Child and Dependent Care Credit is worth 20% to 50% of up to $3,000 in costs for one child or $6,000 for two or more, with the rate falling as income rises. Dollars paid through the FSA can't also count toward the credit, so the calculator tries every FSA amount in $100 steps and keeps the combination that saves the most. The credit is nonrefundable, so it can't exceed your federal income tax, which we estimate from 2026 brackets and the standard deduction.
• What it leaves out: state income tax savings and state credits, subsidies, and the earned-income limit (for a couple, FSA and credit amounts can't exceed the lower earner's pay). FSA payroll-tax savings assume the parent contributing earns less than the 2026 Social Security wage base of $184,500.

Sources

• Care.com, 2026 Cost of Care Report (national daycare and nanny rates); metro figures per our methodology.
• HHS Administration for Children and Families, Child Care and Development Fund (CCDF) Program, 81 FR 67438 (September 30, 2016): origin of the 7% benchmark.
• HHS Administration for Children and Families, Improving Child Care Access, Affordability, and Stability in the CCDF, 89 FR 15366 (March 1, 2024): the 7% copayment cap.
• HHS Administration for Children and Families, Restoring Flexibility in the Child Care and Development Fund (CCDF), 91 FR 25796 (May 12, 2026): rescission of the cap, effective July 13, 2026.
• IRS, Form 2441 and instructions (2026): credit percentages and phaseout schedule, the $7,500 dependent care benefit limit, and the credit limit.
• IRS, Revenue Procedure 2025-32: 2026 tax brackets and standard deductions.
• Social Security Administration, Contribution and Benefit Base: the 2026 wage base of $184,500.

Frequently Asked Questions