Child Care Subsidy · guide
Child Care Subsidy income thresholds for 2026-27
One table to find your subsidy percentage, and the rules behind each line.
Checked by Radif Partners · Editorial policy · How we calculate
In the 2026-27 income year, a family with a combined adjusted taxable income of $88,520 or less receives the maximum Child Care Subsidy of 90% of its fee, up to the hourly rate cap. Above that, the percentage drops by one point for each $5,000 of income, or part of $5,000, so a family on $150,000 is at 77%, one on $250,000 at 57%, and the subsidy reaches zero at $538,520. A second income test gives a higher percentage, up to 95%, to each younger child aged 5 or under while income is under $370,727. The thresholds are indexed every 1 July, and the percentage is set during the year on your income estimate, then checked against your actual income after the tax returns, with any difference paid to you or recovered as a debt.
Your Child Care Subsidy percentage
Standard rate
72%
| Higher rate, second child aged 5 or under | 85% |
| Income where the standard rate starts to fall | $88,520 |
| Income where it reaches 0% | $538,520 |
The table
| Combined family income | Standard rate | Higher rate, younger child 5 or under |
|---|---|---|
| $80,000 | 90% | 95% |
| $88,520 | 90% | 95% |
| $100,000 | 87% | 95% |
| $125,000 | 82% | 95% |
| $150,000 | 77% | 93% |
| $175,000 | 72% | 85% |
| $200,000 | 67% | 80% |
| $250,000 | 57% | 80% |
| $300,000 | 47% | 70% |
| $350,000 | 37% | 53% |
| $400,000 | 27% | not available |
| $450,000 | 17% | not available |
| $500,000 | 7% | not available |
| $538,520 | 0% | not available |
How the standard percentage is worked out
Start at 90%. Subtract the lower threshold of $88,520 from your combined income. Divide what is left by $5,000 and round up to the next whole number. Take that number of points off 90%. A family on $112,000 is $23,480 over the threshold, which is four full steps and part of a fifth, so its percentage is 85%. The guide's own example, a family on $288,520, comes out at exactly 50% (Family Assistance Guide 3.5.4).
Because the steps round up, the cheapest place to be is just under a threshold step. That rarely justifies working less, since a $5,000 step changes the subsidy by one percentage point of the capped fee, but it is a reason to keep the income estimate accurate rather than generous or cautious.
What counts as family income
Child Care Subsidy uses adjusted taxable income, the same measure as Family Tax Benefit: taxable income of both partners plus items such as reportable fringe benefits, reportable superannuation contributions and net investment losses. Taxable Centrelink payments count; Family Tax Benefit and the subsidy itself do not. A single parent's income is assessed alone. Everyone claiming the subsidy must give an estimate, including families on income support (section 3.5.1).
Where to find your figure
Read down the first column to the line just below your expected combined income, then read across. If your income falls between two lines, work it out with the method below or enter it in the mini calculator above, which applies the exact rule. Both columns move only in whole points, so the table never misleads by more than a few points between lines.
Three families on the table
A couple on two modest salaries totalling $85,000 is under the lower threshold and receives the full 90%; the subsidy then depends only on the fee, the hours and the cap. A couple on $160,000 is $71,480 above the threshold, which is fifteen steps of $5,000 rounded up, leaving 75% for the eldest child and 90% for a younger sibling aged 5 or under. A household on $420,000 still receives 23% for every child, because the higher rate stops at $370,727 but the standard rate continues down to zero at $538,520.
Compared with Family Tax Benefit, these thresholds reach much higher incomes. A family that receives no Family Tax Benefit at all can still have a substantial subsidy, which is why the household calculator shows both: a two-income family above the Part A cut-off may find Child Care Subsidy is its only Centrelink payment.
Indexation
The lower threshold of $88,520 is indexed to the consumer price index at the start of each financial year, and the other thresholds move with it, so the whole table shifts every 1 July. The figures above apply to the 2026-27 year; the subsidy for care used in July 2027 onward will use new thresholds. Because the steps stay $5,000 and $3,000 wide while the starting points move, the percentage for an unchanged income usually rises slightly each July, and a pay rise in line with prices leaves it about where it was.