How to Budget for Childcare: A Financial Planning Guide for NZ Families

Childcare is expensive, and budgeting for it can feel personal. A useful mindset shift: treat it like an investment your household is making in time (to work, study, rest) and in your child’s learning — not a ‘nice to have’ you should feel guilty about.

It doesn’t make it cheap. It just makes the trade-offs (hours, location, care type) easier to talk about.

Childcare budgeting falls over when you only budget for the headline hourly rate. The real number is your booked hours plus the extras that show up later: optional charges, minimum-day rules, and the weeks you pay even when your child is home sick.

Keep it simple: calculate core fees, add predictable add-ons, then add a small buffer.

If you haven’t done it yet, pull out your enrolment agreement and highlight anything that mentions ‘minimum attendance’, ‘optional charges’, ‘notice period’, and ‘fees during absence’. Those clauses drive your budget more than the marketing brochure does.

New Zealand’s childcare support is messy, but you can get real savings when you stack it properly. For most families, the big three are: 20 Hours ECE, FamilyBoost, and the WINZ Childcare Subsidy/OSCAR.

Some support reduces your bill straight away (for example, WINZ subsidies paid to the provider). FamilyBoost comes back later, so plan your cashflow.

If your child is 3, 4, or 5, they can use 20 Hours ECE for up to 20 hours a week and 6 hours a day. The Ministry of Education states you cannot be charged fees for any of the hours your child is signed up to receive as 20 Hours ECE. Source: 20 hours funding for early childhood education.

Centres can charge for hours outside those 20 hours. They can also request optional charges (for example, food or excursions), but they have to be handled properly and agreed to in writing. If you want the practical parent version (what’s ‘free’, what isn’t), read: 20 Hours ECE NZ explained.

FamilyBoost is Inland Revenue’s childcare payment for eligible households paying for licensed early childhood education. You claim it every 3 months (quarterly) through myIR using invoices from your provider.

For quarters ending after 1 July 2025, IRD says you can claim up to 40% of eligible ECE costs, up to $1,560 per quarter. Eligibility depends on your household income for the quarter (under $35,000 gets the full percentage; above that it abates, and it cuts off at $57,286). Source: How much FamilyBoost you are eligible for.

Budgeting tip: treat FamilyBoost like a quarterly ‘refund’, not weekly income. It’s easy to feel broke every week and then get a lump sum later. We cover a simple cashflow system in: FamilyBoost childcare tax rebate NZ.

Work and Income can help with childcare costs if you’re working, studying, training, or in some approved situations. The Childcare Subsidy is for under‑5s; OSCAR is for before/after school care and holiday programmes. Start points: https://www.workandincome.govt.nz/eligibility/children/childcare.html

Eligibility and rates depend on your income and child count. Work and Income’s tables note a maximum hourly subsidy (for example, $6.52/hour is referenced in their provider summary). Source: https://www.workandincome.govt.nz/providers/childcare-and-oscar/types-of-childcare-available.html

If you think you might qualify, don’t wait until your first invoice is overdue. Start the application early (Work and Income often recommends applying weeks before you need the subsidy to start).

This is the page you want on the fridge. List what applies, how it’s paid, and when it hits your bank account.

This is the part parents whisper about: ‘Is it even worth going back?’ The only honest answer is: it depends on your after-tax pay, the net childcare bill (after subsidies), and the extra costs of working. For many families, the first few months back are tighter than expected.

A break-even calculation doesn’t tell you whether you should work. It just stops you from being surprised. And it gives you something concrete to discuss with your partner and your employer.

Example (rough numbers): one parent returns 3 days/week (24 hours) at $30/hour. That’s $720 gross, and say $520/week take-home after PAYE/KiwiSaver (your exact number will differ).

Childcare: 24 hours at $10.50/hour = $252/week. They claim FamilyBoost and estimate an average $101/week back (paid quarterly), so net childcare is about $151/week.

Other impacts: $75/week commuting/incidentals, and they estimate WFF drops by $30/week once income rises.

If your leftover ends up close to zero, look for one lever that changes the result (one less day of care, cheaper under‑2 care, less commuting) rather than trying to ‘optimise’ everything.

Childcare invoices are often weekly, but most households budget monthly. Translate weekly costs into monthly numbers, then plan for the lumpy bits: quarterly FamilyBoost refunds and school-holiday changes.

Use 4.33 as the ‘weeks per month’ multiplier (52 weeks ÷ 12 months). It’s more accurate than multiplying by 4 and then wondering why you’re always short.

The key move there is the FamilyBoost sinking fund. When the refund arrives, you don’t ‘spend it’ — you use it to refill the sinking fund or pay down the childcare line in your budget.

Example: a 3‑year‑old attends 4 days/week. The centre charges $88/day, and $6/day optional charges for food/resources. After applying 20 Hours ECE, the weekly invoice is $160 (fees) + $24 (optional) = $184/week.

The family expects FamilyBoost to return about $64/week-equivalent on the eligible fees portion (paid quarterly). They set that aside as a sinking fund, so the budgeted weekly cost becomes roughly $120 + $24 = $144/week.

Your goal is to avoid the ‘why are we short this month?’ surprise.

If you’re trying to make childcare affordable, it usually comes down to three levers: hours, care type, and subsidy capture. Everything else is marginal.

Childcare support exists, but it’s not automatic. If you’re budgeting seriously, treat tax and entitlements as part of the plan: keep invoices for FamilyBoost, and expect Working for Families to move when your household income moves.

FamilyBoost is claim-based, so two actions matter: keep invoices and claim each quarter in myIR. IRD assesses eligibility using your household income for that quarter. Source: https://www.ird.govt.nz/familyboost/can-you-get-familyboost/how-much-familyboost-are-you-eligible-for

When one parent returns to work, you might gain wages and lose some Working for Families through abatement. IRD’s starting points: https://www.ird.govt.nz/working-for-families and the estimator: https://www.ird.govt.nz/working-for-families/estimate-your-entitlement

Childcare costs don’t stay flat. They jump and drop at predictable points — and if you plan for those points, budgeting gets much less stressful.

Sometimes you do the maths and it’s genuinely brutal. No judgement. This is a common phase, especially with two children under 5.

If you’re in that spot, the goal shifts from ‘perfect’ to ‘workable’: reduce paid hours, use family help if you have it, or find a cheaper care mix until the next milestone (age 3 / school start) changes the equation.

Don’t budget childcare as a single number. Budget it as a system — fees, extras, subsidies, and timing.

Start by running your situation through our estimator, then adjust it with the reality of your centre’s policies and your work plans: Childcare cost estimator.