How to Compare Daycare Costs Between Two Providers

You’ve toured two centres. One quotes $1,395 a month, the other $1,250. The second one is cheaper — $145 a month, $1,740 a year — so that’s settled, right?

Not necessarily. Tuition is the number centres advertise, and it’s the number least likely to decide what you actually pay. Registration fees, supply fees, meal charges, closure days and late-pickup policies routinely swing the comparison by more than the tuition gap does. This guide totals the true year-one cost of both, with a worked example where the ranking flips.

It’s the shopping stage of the wider job of tracking childcare costs in a spreadsheet.

The nine questions to ask on the tour

Write these down and ask every centre the same nine. The answers are the inputs to the comparison:

1. Monthly tuition, and how it changes as my child moves up an age group.
2. Registration or enrolment fee — one-time or annual? Refundable?
3. Annual supply, activity or materials fee — how much, and when is it billed?
4. Are meals and snacks included, or billed separately? How much?
5. Are nappies, wipes and formula provided, or do I supply them?
6. How many days a year are you closed? Public holidays, staff training days, any full-week closure?
7. What’s the late-pickup fee and how is it calculated — per minute, or per block?
8. Do I pay tuition for weeks my child is away on holiday or sick?
9. What have your rate increases been for the last two years?

Question 6 and question 7 are the ones that hide the money.

The worked example

Two centres, one child, full-time. Here’s what the tours turned up.

Provider A — $1,395/month. $250 registration (one-time). $150 annual supply fee. Meals included. Closed 12 days a year. Late pickup $1 per minute. Open 7:00–18:00.

Provider B — $1,250/month. $400 registration (one-time). $200 annual supply fee. Meals billed at $60/month. Closed 18 days a year, including a full week in August. Late pickup $25 per 15 minutes started. Open 7:30–17:30.

Layer 1: the fees you can see

Provider B is $820 cheaper. Less than the $1,740 the tuition gap implied, but still ahead.

Layer 2: closure days

B closes six more days a year than A. If you and your partner can absorb those with paid leave, they cost nothing. If you can’t — and most families can’t absorb all of them — that’s backup care.

Assume $120 a day for backup care (a sitter at roughly $15/hour for a working day):

The gap has collapsed from $820 to $100.

Layer 3: late pickup

This is the one nobody models, and for a household with a commute it’s the largest single variable in the whole comparison. Say you’re late by about ten minutes twice a month — realistic if you’re driving from work in traffic. B also closes half an hour earlier, which makes being late meaningfully more likely.

• Provider A: $1/minute × 10 minutes × 24 times = $240/year
• Provider B: $25 per 15-minute block started — a 10-minute overrun costs the full $25 × 24 = $600/year

Provider A is now $260 cheaper — a complete reversal of the $1,740 advantage the sticker price suggested.

What the example is actually teaching

Not “always pick the higher-tuition centre.” The point is that four variables no one puts on a price list — one-off fees, meal billing, closure days and late-fee structure — moved this comparison by $2,000 in relative terms, which is more than the tuition difference. Any of them could have gone the other way. You only find out by totalling them.

The three that most often decide it:

Closure days are pure cash if you don’t have the leave to cover them. Six days is nearly a week of backup care. A centre with a full-week summer closure on top of holidays can be closed 20+ days.

Late-fee structure matters more than the rate. “Per minute” is forgiving; “per block started” is not. $25 per 15-minute block means a two-minute overrun costs $25. If your commute is unpredictable, model this honestly rather than optimistically.

Meals are quietly one of the biggest line items — $60/month is $720 a year, half the tuition gap in the example.

A worksheet you can copy

Build this once and reuse it for every centre you tour. Same rows, one column per provider:

Add the non-financial rows underneath — ratios, staff turnover, licensing record, commute time, your gut feeling after the tour. Those decide it in the end. The money columns exist so that when you choose the more expensive centre, you’re doing it knowingly.

Two things that aren’t on the worksheet

Rate increase history. A centre that’s raised fees 6% a year for two years will do it again. Over three years that compounds well past the gap you’re comparing today. Ask, and weight it.

Commute. Fifteen extra minutes each way is roughly 125 hours a year, plus fuel, plus a materially higher chance of those late-pickup fees. It doesn’t go in the total, but it belongs in the decision.

Once you’ve chosen

Keep the comparison sheet. When the annual rate letter arrives, you’ll want the original numbers to see how far things have drifted — and if you tour again in two years, you’ll have a baseline instead of starting from scratch. It also feeds directly into your Dependent Care FSA election, since the FSA-versus-credit decision depends on knowing your real annual spend before open enrolment.