Childcare can be one of the biggest costs for families with young children. Each early childhood service sets its own fees, and no official survey publishes typical fee levels, so this guide covers what does have published rules: how fees are charged, 20 Hours ECE, the Childcare Subsidy and FamilyBoost.
Fees are set by each service, so ask for its fee schedule. 20 Hours ECE covers up to 20 hours a week of ECE with no fees for 3-, 4- and 5-year-olds. Work and Income's Childcare Subsidy pays up to $6.72 an hour for lower and middle-income families, and Inland Revenue's FamilyBoost refunds up to 40% of ECE fees (up to $1,560 a quarter) for households earning under $57,286 a quarter.
How ECE Fees Work
Each early childhood service sets its own fees, usually per hour, per day or per week, and they often differ by the child’s age. The Ministry of Education doesn’t publish typical fee levels, so compare the fee schedules of the services near you. When you compare:
- Ask what the fee covers: meals, nappies and trips may be included or charged separately.
- 3- to 5-year-olds: a service offering 20 Hours ECE can’t charge fees for those hours; you pay only for hours beyond them (20 Hours ECE covers at most 6 hours a day, so a full day can still include some paid hours).
- Home-based care: home-based networks set their fees the same way. If you employ a nanny directly, you’re their employer and must pay at least the adult minimum wage of $23.95/hour (from 1 April 2026).
- After-school and holiday programmes (OSCAR): Work and Income’s OSCAR Subsidy can help with approved programmes for children at school and under 14 (under 18 if you get a Child Disability Allowance for them).
Government Subsidies — Reducing Childcare Costs
20 Hours ECE Funding (from age 3)
- The child is aged three, four or five and not enrolled at school.
- It covers up to six hours a day and 20 hours a week.
- It's only available at a licensed service that offers 20 Hours ECE.
- The service can't charge fees for 20 Hours ECE hours, though it can ask for donations and optional charges.
- Work and Income's Childcare Subsidy isn't paid for the same hours, except for a home-based educator's top-up.
Services that can offer it include kindergartens, education and care centres, home-based services and eligible kōhanga reo. It is not available for 2-year-olds: a planned extension to 2-year-olds was cancelled before it started.
How it works:
- Government pays the ECE provider directly (for all-day centres, base rates from 1 July 2026 range from $10.91 to $15.64 an hour including GST, depending on the share of certificated teachers)
- Donations and optional charges for extras are voluntary: you can decline them
- Fees still apply to any hours beyond the 20 funded hours
Important: Not every service offers 20 Hours ECE to all eligible children. Ask before enrolling.
Childcare Subsidy (Work and Income)
The Childcare Subsidy tops up childcare costs for lower and middle-income families. Work and Income’s rule:
- You are the principal caregiver of a dependent child.
- You are a New Zealand citizen or permanent resident, and normally live in New Zealand and intend to stay.
- Your family is on a low or middle income.
- The child is under 5 (or over 5 at a cohort-entry school, or under 6 if you get a Child Disability Allowance for them).
- The child attends an approved early childhood education programme or service for 3 or more hours a week.
- It normally covers up to 9 hours a week, or up to 50 hours if you're working, studying or training (or in another listed situation), and usually no more than 9 if the child's other parent or caregiver can care for them.
- It isn't paid for the same hours as 20 Hours ECE, unless a home-based educator charges a top-up for those hours.
How much you get depends on your household income and number of dependent children.
Income thresholds and rates (from 1 April 2026): the subsidy is paid to the provider for children under 5, based on gross weekly family income. The full rate is $6.72 an hour per child (up to $336 a week for 50 hours), with lower rates ($5.36, $3.75, $2.09 an hour) as income rises.
| Children in family | Full rate if gross family income is under | Subsidy stops at |
|---|---|---|
| 1 | $1,131/week (about $59,000/year) | $2,404/week (about $125,000/year) |
| 2 | $1,301/week (about $68,000/year) | $2,748/week (about $143,000/year) |
| 3 or more | $1,457/week (about $76,000/year) | $3,091/week (about $161,000/year) |
Apply via Work and Income (workandincome.govt.nz). Work and Income suggests applying at least 3 to 4 weeks before you need the subsidy to start.
FamilyBoost (Inland Revenue)
- You care for a child or children aged 5 and under.
- Your household income is under $57,286 a quarter.
- You have fees from a licensed early childhood education provider.
- You are a New Zealand tax resident.
- If you have a partner, only one of you can register.
Households earning under $35,000 a quarter can claim 40% of fees, up to $1,560 a quarter; above $35,000 the maximum reduces by 7 cents for each extra dollar, reaching zero at $57,286 a quarter. These thresholds apply from 1 July 2025. Fees don’t include amounts covered by the Childcare Subsidy. Claim quarterly through myIR.
The True Cost of Returning to Work vs Staying Home
Whether a second income more than covers childcare depends on your fees, hours and pay. Here is a worked example with an assumed fee; replace it with your service’s fee schedule.
Example calculation — second parent returning to work:
| Item | Monthly |
|---|---|
| Gross second income (part-time, 30 hrs @ $28/hr) | $3,640 |
| PAYE tax (M code) | -$546 |
| ACC levy (1.75%) | -$64 |
| KiwiSaver 3.5% | -$127 |
| Childcare (1 child, 3 days/week, 2 years old, assumed fee of $360 a week) | -$1,560 |
| Commuting costs | -$200 |
| Work-related clothing, food etc. | -$200 |
| Net financial gain | $943/month |
At 30 hours part-time on $28/hr with one child in childcare 3 days/week at the assumed fee, the net financial gain is about $943/month (about $218/week), using 2026/27 tax, ACC levy and the 3.5% default KiwiSaver rate, before any Childcare Subsidy or FamilyBoost, which would reduce the childcare cost. For many families, this is worthwhile for career continuity, social engagement, and pension savings, even if the immediate financial benefit is modest.
Tips to Reduce Childcare Costs
1. Start with the Childcare Subsidy — apply as soon as you know your childcare start date, even if you’re unsure of your income. It can take weeks to process.
2. Adjust your KiwiSaver rate — if the family is in a tight financial position, applying to IRD for a temporary rate reduction (contributing 3% instead of the 3.5% default, for 3 to 12 months) frees up a little cash.
3. Check how services handle 20 Hours ECE. Fees can’t be charged for 20 Hours ECE hours, but optional charges and donations can add up, and you don’t have to agree to them.
4. Use family care if available: unpaid care from grandparents or other family costs nothing in fees.