What are CCS hourly rate caps?

Kate Sachdev Content Specialist

26 May 2026

“Wait… does CCS not apply to all of my childcare fees?”

This is one of those details many parents only discover after they start seriously looking at childcare costs. While the Child Care Subsidy (CCS) can significantly reduce childcare fees, it doesn’t automatically apply to any amount a childcare service charges.

Instead, the government sets a maximum hourly amount that CCS can be calculated against. This is called the CCS hourly rate cap. If a childcare service charges above that cap, families pay the difference themselves.

What is the CCS hourly rate cap?

The CCS hourly rate cap is the maximum hourly fee the Australian Government will subsidise when calculating CCS. The cap is set by the government and published by Services Australia. The caps are based on the Consumer Price Index (CPI) and are usually updated each July for the new financial year - this is why families often experience fee increases at their childcare services around this time.

Different caps apply to different care types, including:

long day care
family day care
outside school hours care
in-home care

Why CCS hourly rate caps matter

Why should you give a crap about the cap? Because it affects how much you will pay out of pocket for childcare - CCS is applied only up to the capped amount, not necessarily the whole fee charged by the service.

If a childcare service charges:

below the cap → CCS applies to the full fee

above the cap → families pay the extra amount themselves, on top of their CCS gap fee

A simple example

Imagine:

a childcare service charges $16 per hour
the government CCS hourly rate cap is $14.63
the Ling Family’s CCS percentage is 70%

Even though the service charges $16 per hour, CCS only applies up to the capped amount of $14.63. This means the government calculates the subsidy using $14.63, not the full $16 fee.

Here’s how it works:

The government subsidises:

70% of $14.63 = $10.24 per hour

The Ling Family pays:

the remaining 30% gap fee on the capped amount: $4.39 per hour
plus the amount charged above the cap: $1.37 per hour ($16.00 − $14.63)

So in total:

Out of the $16 charged by the childcare service per hour:

the government pays $10.24
the Ling Family pays $5.76 ($4.39 gap fee + $1.37 above-cap amount)

Why do some childcare services charge above the cap?

The hourly rate cap is not a limit on what childcare services can charge. It’s simply the maximum amount CCS will subsidise.

Childcare fees vary between services based on things like:

location
staffing costs
inclusion and facilities
demand for places

This is why some services sit close to the cap, while others charge significantly above it.

How to tell if a service charges above the CCS hourly rate cap

Because many childcare services advertise daily fees rather than hourly fees, it’s not always obvious whether they charge above the CCS hourly cap. You can always ask services what their equivalent hourly fee is or pull out a calculator and divide the daily rate by the number of hours in the service’s daily session.

For the list of current CCS hourly rate caps for different types of care, check the Services Australia website.

Why understanding the CCS hourly rate cap helps

If a childcare service charges above the government hourly cap, families always pay the extra amount themselves - on top of their usual gap fee after CCS has been applied. Understanding how the cap works can help you: