Methodology

The shape of the calculation

For each day count from 0 to 5, the calculator works out your family's net position for the year, then compares it with the day before:

"Net income" already has income tax, the Medicare levy, the Low Income Tax Offset and any HELP repayment taken out. What a day adds is simply this day's family net position minus the day before's: what that one extra day, on its own, actually added once everything it triggers is accounted for. The per-hour figure divides that by the hours in a year of working that one extra day: 7.6 hours a day × 52 weeks.

Income tax

Australia's resident tax brackets are progressive: each slice of your income above a threshold is taxed at that slice's own rate, not your whole income at your top rate. The calculator walks every bracket below your income and sums the tax owed in each:

• $0 to $18,200: 0%
• $18,200 to $45,000: 15%
• $45,000 to $135,000: 30%
• $135,000 to $190,000: 37%
• above $190,000: 45%

Source: Australian Taxation Office: individual income tax rates · Checked 19 August 2026 · Verified by codex+2026-08-19

Medicare levy

The Medicare levy is 2% of taxable income under the standard rules. Below $28,011 it's nil; just above that threshold it phases in gradually at 10% of the income over the threshold, rather than jumping straight to the full 2%, so the calculator applies whichever of those two amounts is smaller.

Source: Australian Taxation Office: Medicare levy · Checked 19 August 2026 · Verified by codex+2026-08-19

Low Income Tax Offset (LITO)

LITO is worth up to $700 and shaves that straight off your tax bill, but it's non-refundable: it can only reduce your tax to zero, never turn into a cash refund on its own. It stays at the full $700 up to $37,500 of taxable income, then tapers in two steps: 5% per dollar between $37,500 and $45,000, then 1.5% per dollar between $45,000 and $66,667, where it reaches zero. This is exactly the part-time range where a second earner's extra day often sits: LITO tapering off is one reason a middling day can be worth less than it looks.

Source: Australian Taxation Office: Low Income Tax Offset · Checked 19 August 2026 · Verified by codex+2026-08-19

HELP / HECS repayments

If you have a HELP or HECS-HELP debt, the calculator adds a compulsory repayment on top of income tax once your income passes $69,528. Like income tax, it's marginal; each band applies only to the income inside it:

• $69,528 to $129,717: 15%
• above $129,717: 17%

There's one cap on top: once your income passes $186,050, your repayment can never exceed 10% of your total income, even though the highest band's own rate is higher. The two calculations meet exactly at that point, so the cap only ever pulls the repayment down, never up.

Source: Australian Taxation Office: study and training loan repayment thresholds · Checked 19 August 2026 · Verified by codex+2026-08-19

Medicare Levy Surcharge (MLS)

The MLS only applies if your family has no private hospital cover and your family income clears a threshold; it's a cliff, not a taper: once you're over the line, the whole rate applies to your whole income, not just the amount above it. Couples and single parents share family thresholds; singles use their own:

• Families/couples ($210,000 to $246,000): 1%
• Families/couples ($246,000 to $328,000): 1.25%
• Families/couples (above $328,000): 1.5%
• Singles ($105,000 to $123,000): 1%
• Singles ($123,000 to $164,000): 1.25%
• Singles (above $164,000): 1.5%

Each threshold lifts by $1,500 for every child after the first, so larger families get more headroom before the surcharge bites.

Source: Australian Taxation Office: Medicare Levy Surcharge · Checked 19 August 2026 · Verified by codex+2026-08-19

Child Care Subsidy (CCS)

CCS covers 90% of your fee (up to an hourly cap, see below) for families on $88,520 or less of combined family income. Above that, the rate tapers down by one percentage point for every $5,000 of extra family income, reaching zero at $538,520. It's this taper, applied to every day of care your kids already use (not just the newest day) that makes an extra workday quietly more expensive than it looks.

Higher rate for a second child

A second (or younger) child under five gets a top-up of 30%, capped at 95% overall, as long as family income stays at or under $370,727. The calculator applies this per eligible child, not just once per family.

Hourly rate caps by care type

The subsidy only ever applies up to an hourly fee cap; anything your service charges above the cap is entirely out of pocket, subsidy or not:

• Centre-based day care, child under school age: $15.19/hr
• Centre-based day care, school-age child: $13.30/hr
• Family day care: $14.08/hr
• Outside school hours care: $13.30/hr
• In-home care, per family: $41.31/hr

Three-day minimum CCS setting

Since the three-day minimum CCS setting took effect, many families keep a subsidised minimum number of care days a week regardless of hours worked, studied or volunteered: the old activity test that could shrink your subsidised hours below that floor no longer applies. The calculator's day-by-day comparison already reflects a subsidy rate that doesn't fall away for lower activity; we don't separately model the floor because our numbers never depend on it cutting in.

Separately, Services Australia withholds 5% of your subsidy through the year against your end-of-year reconciliation: a cash-flow detail, not a change to your entitlement (see Exclusions below).

Source: Services Australia: how income affects Child Care Subsidy · Services Australia: CCS rates and caps · Checked 19 August 2026 · Verified by codex+2026-08-19

Childcare you pay after subsidy (sometimes called the gap fee)

For each child, for each day of care, the subsidy covers a rate of the lower of your actual daily fee or the hourly cap times your session hours: the "Hours per day at the centre" field on the form, which defaults to 10 hours. Whatever's left is what actually leaves your bank account:

Session length matters more than it looks, because the cap is per hour. At the $15.19/hr centre-based cap, a 10-hour session means the subsidy can apply to the first $151.90 of each day's fee ($15.19 × 10 hours). A longer session lifts that ceiling at the same daily fee, so more of the fee attracts subsidy; a shorter one lowers it. Your session length is on your invoice. Worth entering exactly.

That daily amount is then multiplied by the days of care that week and by 52 weeks a year, and summed across every child in care. Daily fees default to your state's average from the Department of Education's childcare reports, but every field is editable; use your own centre's fee for an accurate result.

Source: Department of Education: early childhood data and reports · Status: estimated · Checked 19 August 2026

The super footnote

Every extra day you work also earns employer super at the 12% employer superannuation rate. It's real money, but it's locked away for decades, so the calculator shows it as a separate footnote next to each day count: it's never folded into the per-hour figure or the family net position above it.

Source: Australian Taxation Office: key superannuation rates and thresholds · Checked 19 August 2026 · Verified by codex+2026-08-19

Assumptions built into every scenario

• A work day is 7.6 hours, from the 2026-27 rules file. A care session defaults to 10 hours from the same file, but it's yours to edit: the "Hours per day at the centre" field on the form feeds every subsidy calculation on the site.
• The year is 52 working weeks: every annual figure is a weekly amount times that many weeks.
• Salaries are pro-rated: a part-time scenario's gross pay is days/5 * FTE of the full-time-equivalent salary you enter.
• Care days are the greater of your existing childcare baseline (days your child already attends, regardless of work) and the work days a scenario covers: the model doesn't add top-up days on top of that for commuting, professional development, or transition periods.

What's not included

We'd rather tell you what we leave out than quietly get it wrong. None of the following are modelled in the 2026-27 calculator:

• Family Tax Benefit Part A and Part B: a separate, means-tested payment we don't model yet (v2 candidate).
• State-run free-kinder programs (for example Victoria and Queensland's funded kindergarten hours): these can cut your real fee below the state average we prefill. Edit the daily-fee field if one applies to your child's age and service.
• The 5% Child Care Subsidy withholding Services Australia holds back against your year-end reconciliation: a cash-flow timing detail, not a change to the subsidy you're ultimately entitled to.
• Adjusted taxable income add-backs (reportable fringe benefits, reportable super contributions, net investment losses): we assess everything on salary alone. If you salary-sacrifice heavily, your real CCS and MLS position may differ from the estimate.
• Top-up care days beyond your existing baseline and your work days: the calculator bills whichever of the two is larger, with no extra days added for appointments, professional development or transition periods.
• Multiple countries, backend accounts, or saved data of any kind: this is a static, stateless calculator with no server-side accounts.
• The Medicare Levy Surcharge is modelled as a single rate applied to combined family income. The real levy is assessed per person against their own income, with individual low-income exemptions, so we may slightly overstate MLS for families where one partner earns very little.

Freshness

This page reflects the 2026-27 financial year. Each section's status and checked date are shown above, including the estimated fee assumptions. For a full list of what's checked and when the next review is due, see the changelog.