Think Your Rates Should be the Same as Other Providers in Your Neighborhood?

Maybe. But probably not.

One of the most important, and perhaps the most difficult, processes a provider will need to complete is establishing her rates. Most providers anguish over the question, “How much should I charge" The answer to that question is individual and different for every provider. The answer is NOT what the provider down the street is charging. The answer is NOT what the subsidy agencies will pay. And the answer is definitely NOT a different arbitrary fee for each individual family. To come up with the answer to this question, a provider must ask his or herself the following questions and then use the information to come up with a rate that is right for that individual provider.

* How much do I need to charge in order to cover my expenses? No two providers have the same business or personal expenses and some have outside income from their spouse, a second job or maybe retirement, while for other providers the daycare is his or her only source of income. This sample budget shows what happens when two providers with different expenses and incomes charge the same thing. "One-size-fits-all" simply doesn’t apply when deciding what you need to charge for your child care services.

* What services am I offering that will be covered by this fee?

* Are parents willing to pay more for higher quality care?

* How much can parents afford to pay?

* Are there any subsidies or programs, like the Child Care Food Program, I can participate in to help cover the cost of care so I that can offer a scholarship to parents that can’t afford to pay what I need to charge?

Many providers worry that parents will question the justification for charging the rates they do. In fact, I would hope that parents do question a provider’s fee. Parents have the responsibility of ensuring that they are paying for quality care for their children, and it is the provider’s responsibility to ensure them that they are. If a provider believes in the value of her profession and is able to articulate to parents the value and the quality of the services she provides, parents will be confident that they are getting their money’s worth.


It is necessary to periodically increase rates to keep up with the increased cost of providing quality care, and to continue to cover all business, and often, personal expenses. It is NOT necessary for providers to apologize for increasing their fees. All businesses need to do this; and child care IS most definitely a business. Parents themselves usually receive a cost of living increase every year, so why should a provider feel guilty about implementing an increase in fees that will keep her business viable and allow her to continue to provide high quality child care??

When increasing fees, inform parents in writing AT LEAST 30 days in advance of the increase. Some providers prefer to increase their rates annually, often at the beginning of the calendar year, or at the start of a new school year. Some providers raise fees for all families currently enrolled, and some charge the increased amount to new enrolling families, but leave current families at the old rate. It is up to the individual provider to know which method works best for his or her business. The important thing is to take the action. I will say it again, If a provider believes in the value of her profession and is able to articulate to parents the value and the quality of the services she provides, parents will be confident that they are getting their money’s worth.

Return from Rates to FCC Business Planning
Return to Home