Are you charging parents consistently, accurately and fairly for all of the services they (and their kids) use at your child care center? If not, it might be time to figure out a daycare fee structure that works for your business.
In this blog post, we’ll explain what a daycare fee structure is and why it’s important to create one for your child care business. We’ll also list some of the most common daycare fee structure components that you should include to help make sure you’re covering your costs, billing fairly for your work and making a healthy profit.
Let’s dive in!
What is a Daycare Fee Structure?
A daycare fee structure is a document listing all fees that your child care center charges to parents for services that you provide.
A comprehensive daycare fee structure includes information on many types of fees, such as:
- Tuition Fees – This is the fee that most center owners or directors know well. Child care tuition fees vary depending on the age of the child, how many days per week they visit the center and how many hours they receive care. A daycare fee structure should break down child care fees for all of these scenarios.
- Service Fees – In addition to routine child care, centers may offer additional services like meals, transportation to and from school, and night care. A daycare fee structure should include listed fees for any services that aren’t included with tuition.
- Administrative Fees – If your child care center charges a registration fee or a waitlisting fee, those fees should appear on your daycare fee structure.
- Incidental Fees – Incidental child care fees include things like early drop-off or late pick-up (outside of your normal operating hours), unscheduled care or even late payment fees. Any incidental fees that parents may incur from your center should appear on your daycare fee structure.
Why You Need a Daycare Fee Structure
Creating a daycare fee structure for your business is highly recommended. Let’s dive in on why this is so important.
Bill Parents More Fairly
For most child care centers, charging the same weekly tuition rate to every family wouldn’t make any sense. Some kids visit the center every day, while others only visit once or twice a week. Infants and toddlers always require more hands-on care (and more staffing), while older kids are more independent and can be managed in larger groups and with less staff. Tuition fees can vary even more at centers that provide add-on services like meals, transportation, or night care.
A daycare fee structure helps account for these differences and ensures that parents are billed fairly for the services they use.
Creating a daycare fee structure makes your child care pricing transparent for parents.
Parents should be able to read your daycare fee structure almost like a menu in a restaurant. It should clearly show all of the fees you charge so parents know exactly what to expect when doing business with you.
Hold Parents Accountable
It’s a lot easier to hold families accountable for paying incidental fees (late pick-up, unscheduled care, etc.) if you can verify that they knew about those fees in advance.
That’s why it’s a great idea to review your daycare fee structure with parents when they first enroll at your center. You could even ask for a signature verifying that they’ve received a copy of your fee structure and reviewed it. That way, you can make sure they’re aware of any/all fees they might incur while using your child care services.
10 Components of a Complete Day Care Fee Structure
Registration/Waiting List Fees
Many child care centers charge a registration fee when families first enroll their child. Registration fees cover the center’s administrative costs for interviewing the family, processing their application, creating a new information file and configuring billing/payments. A registration fee might also be used to pay for personal care supplies the child will use at the center.
It is also common for centers to charge a waiting list fee that helps cover the cost of maintaining the list and contacting families as child care openings become available.
Child Care Tuition Fees
Child care tuition fees are probably the most important part of a daycare fee structure. This is where parents will look to determine their daily child care costs based on their child’s age and care schedule.
Child care tuition fees on a daycare fee structure are usually presented in a table that looks something like this:
Daily Child Care Tuition Costs
|Care Hours||Infant Care – Under 2 years||Preschool Care – Ages 2 to 4||School Age Care – Ages 4 to 12|
|After School Care (0-3 hours/day)||$30/day||$25/day||$20/day|
|Part-Time Care (3-6 hours/day)||$40/day||$30/day||$25/day|
|Full-Time Care (6-12 hours/day)||$55/day||$45/day||$38/day|
|Extended Daycare (12+ hours/day)||$70/day||$60/day||$50/day|
When you create your own daycare fee structure, you can customize every element in the way that works best for your business. That means dividing age groups however you choose, customizing your “care hours” based on the services your center offers, and charging the right child care price for your region and business model.
Meal & Snack Fees
Some child care centers provide meals and snacks to kids as part of their normal child care services. For these centers, the cost of food is included in the cost of child care tuition.
Other centers may choose to bill parents separately for the meals and snacks they provide. For these centers, it makes sense to include information about meal and snack fees in the daycare fee structure. A simple table for meal and snack fees could look like this:
Child Care Meal Costs
Special Activity Fees
If your center offers any special activities whose fees are not included in child care tuition, they should be listed in the daycare fee structure.
Maybe your child care center offers an enrichment program where kids get more individualized attention from a tutor, or play games that strengthen their cognitive development. Or maybe you offer a physical activity program where kids can get fitness instructions from a qualified coach. Any programs like these that aren’t included with tuition should be listed with your daycare fee structure.
Offering transportation services is a competitive advantage for your child care center. But if you’re using a vehicle for your child care business, you’re going to have additional costs for things like gas, insurance and vehicle maintenance.
Thankfully, parents are happy to spend a few extra dollars for you to drive their kids to school in the morning and pick them up from school in the evening. By adding transportation fees to your daycare fee structure, you’ll be able to collect enough to cover your costs and make a profit from the valuable service you’re providing.
Night Care Fees
In addition to fees for daily child care, some centers can accommodate kids for an overnight stay. If your center offers night care, it’s important to include night care fees on your daycare fee structure so parents know about the service and how much it will cost.
Drop-in/Unscheduled Care Fees
As a child care center operator, knowing how many kids you’ll be caring for on a given day makes it easier to organize staffing, activities, lesson plans, meals and just about every other aspect of child care.
Drop-ins should always be welcomed during business hours, but some centers charge a small premium for these unscheduled visits – just in case they need to call in extra staff or make other special arrangements. If you choose to do this, be sure to include a section about drop-in fees in your daycare fee structure.
Early Drop-off/Late Pick-up Fees
No matter what time your center closes its doors for the day, it’s important to hold parents accountable for picking their kids up on time. Many child care centers do this by charging late pick-up fees that heavily incentivize parents to pick their kids up on time.
It’s not uncommon for a child care center that closes at 6 p.m. to charge parents a dollar for every minute they’re late picking up their child. We’ve even seen centers charge as much as $3/minute.
Late Payment Fees
Late payment fees are often a good idea for your child care center. They create an incentive for parents to pay on time, which helps you keep cash flowing into your business.
If you plan to charge late payment fees when parents fail to pay their tuition on time, it’s important to include that in your daycare fee structure.
The last thing you should think about as you put together your daycare fee structure is family discounts. Many child care centers offer special discounts when families enroll more than one of their children. Offering discounts is a great way to make child care services more affordable for families in your community and increase enrollment at your center; however, be judicious about discounts and make sure they’re not having a significant impact on your bottom line.
Automate Your Daycare Fee Structure with Procare Solutions
When it comes to billing parents accurately and fairly for your services, figuring out your daycare fee structure is a great start. The next step is automating the billing and payments process with Procare Solutions.
Procare’s child care billing software integrates with our attendance tracking capability so your center can automate attendance-based billing for each child at your center.
With Procare, you can set up weekly, bi-weekly or monthly tuition plans for each child based on their age, attendance schedule and services they use at your center. You’ll be able to monitor check-in/check-out times and track attendance through Procare’s child care app, keeping you in control of your staff-to-child ratios and ensuring that each family is billed accurately for the time their child spends in your care.
Ready to simplify your child care billing process with Procare Solutions?