How much does childcare cost around the world?

Most parents discover what childcare costs around the same time they get on the waitlist: later than they should have, and with a mild sense of shock at the number. But the sticker price of childcare in Australia doesn't exist in a vacuum. It exists in a global context, and that context is genuinely illuminating.

Some countries have made childcare effectively free. Others treat it as a private expense and leave families to absorb it. Australia sits somewhere in the middle, with a subsidy system that has improved considerably in recent years but still leaves families paying significantly more than most of their OECD counterparts.

Here's what the numbers look like globally.

How childcare costs are compared internationally

The OECD measures childcare costs as a share of net household income — the percentage of take-home pay a family spends on full-time centre-based care after any subsidies, tax concessions, or rebates are applied. Their standard model uses a couple with two children aged two and three, both in full-time care, where one parent earns the average wage and the other earns 67% of the average wage.

This is not a perfect picture of every family's situation, but it provides a consistent basis for international comparison. The OECD average for this measure across member countries is approximately 10% of net household income.

How much does childcare cost in Australia?

Before any subsidies, Australian long day care costs between $70 and $200 per day depending on the provider and location. According to 2024 data from Care for Kids, the national average daily rate is approximately $129.15.

Typical Australian childcare costs before the Child Care Subsidy:

• Long day care: $70 to $200 per day (national average $129.15)
• Family day care: $7.50 to $16.80 per hour
• Preschool/kindy: $45 to $80 per day

In gross terms (before subsidies are applied) an Australian couple with two children in full-time long day care spends approximately 60% of average earnings on childcare fees, according to OECD data cited by The Parenthood. That is well above the OECD average.

After the Child Care Subsidy is applied, the net cost comes down significantly. Australian families in this scenario spend approximately 20% of net household income on childcare, compared to an OECD average of 10%. The gap is real, but the subsidy is doing meaningful work.

How the Child Care Subsidy affects what you pay:

• Families earning up to $83,280 annually receive a 90% subsidy
• The subsidy tapers as income increases, reaching zero above $533,280
• Families with more than one child under five in care may receive up to 95% subsidy for the second child
• The government hourly rate cap for centre-based long day care is $14.29 in 2024-25, meaning fees above this cap are not covered

It is worth noting that The Sector has pointed out that the OECD's hypothetical family — two children in full-time care, both parents working — is not typical of most Australian families. For a more typical family with one child in part-time care, median out-of-pocket costs are considerably lower, around $2,400 per year according to the same modelling. The international comparison figures reflect worst-case scenarios more than average experiences.

Germany: childcare costs around 1% of household income

Germany has one of the most affordable childcare systems in the developed world. According to OECD data reported by the World Economic Forum, net childcare costs in Germany account for approximately 1% of a couple's household income after subsidies. The average annual cost of childcare in Germany is around $1,425 USD — under $120 per month.

Germany's Kita (Kindertagesstätte) system has offered heavily subsidised care to children over twelve months for more than a decade. In some cities, including Berlin, childcare is free for families meeting certain income thresholds. The federal government funds the system through a combination of federal, state, and municipal contributions, meaning the financial burden falls on government rather than individual families.

Source: World Economic Forum "Highest childcare costs and how countries are cutting them" (citing OECD data)

Estonia: effectively zero net cost for families

Estonia has the most heavily subsidised childcare in the OECD. According to the same OECD data, net childcare costs for an average couple in Estonia are effectively 0% of household income. The Estonian government funds early childhood education and care through municipal budgets, with fees set by local government and capped at very low levels. Estonia's strong public investment in early childhood is part of the same social infrastructure that produces its famously generous parental leave system.

Source: World Economic Forum "Highest childcare costs and how countries are cutting them" (citing OECD data)

Nordic countries: heavily subsidised and capped

Sweden, Norway, Finland, Denmark, and Iceland all operate systems where childcare fees are either free or heavily capped as a proportion of family income. Sweden introduced a maximum fee (maxtaxa) system in 2002, capping what families pay at a small percentage of income regardless of actual provider costs. Finland's childcare fees are income-tested and capped by law, with the lowest-income families paying nothing. Norway subsidises fees through a national cap, meaning no family pays more than a legislated maximum per child per month.

The result across the Nordic region is that childcare costs consume a small fraction of household income compared to what Australian, British, or American families pay.

Source: Global Citizen Solutions "Comparing Childcare Affordability Around the Globe"; OECD Family Database PF3.4 Childcare Support

United Kingdom: among the most expensive in the world

The United Kingdom sits at the expensive end of the global spectrum. According to OECD data, net childcare costs for a UK couple on average salaries account for approximately 25% of household income. Research cited by the World Economic Forum found that childcare costs exceed monthly mortgage or rental payments for around two-thirds of UK families, and that 43% of mothers have considered leaving their jobs as a result.

The UK government has been expanding free childcare hours in response. From September 2025, working parents of children under five became entitled to 30 hours of free childcare per week, significantly changing the picture for families with three and four year olds in particular. The full impact of these reforms on net costs is still being assessed.

Source: World Economic Forum "Highest childcare costs and how countries are cutting them" (citing OECD data); Euronews "Childcare puzzle: which countries in Europe have the highest and lowest childcare costs?"

United States: the highest net childcare costs in the OECD

The United States has the highest net childcare costs of any OECD country as a share of household earnings. According to OECD data, American families spend approximately 32% of a couple's wages on childcare, compared to the OECD average of around 14%. Between January 2020 and September 2024, the cost of daycare and preschool in the US rose by approximately 22%, according to Pew Research Center.

Unlike most OECD nations, the United States has no universal federal childcare subsidy system. Support is delivered through a patchwork of state programs, employer benefits, and tax credits, meaning access and affordability vary significantly depending on where a family lives and who they work for.

Source: World Economic Forum "Highest childcare costs and how countries are cutting them" (citing OECD data); Global Citizen Solutions "Comparing Childcare Affordability Around the Globe" (citing Pew Research Center 2024)

Childcare cost as a share of household income: international snapshot

All figures reflect net childcare costs as a percentage of net household income for a couple with two children in full-time centre-based care, after subsidies and tax concessions. Based on OECD data.

Source: OECD Family Database PF3.4 Childcare Support; World Economic Forum (2023); The Parenthood (citing OECD). Note: figures for Australia reflect pre-2024 subsidy reforms; the net figure may have improved following the July 2023 CCS increases.

Why do childcare costs vary so much between countries?

The gap between countries like Germany and Estonia at one end, and Australia, the UK, and the US at the other, is not driven by differences in the cost of running a childcare service. Educator wages, rent, and operational costs are roughly comparable across developed economies. The gap is driven almost entirely by how much each government chooses to fund.

Countries with the lowest childcare costs have made a deliberate policy decision to treat early childhood education as a public good, funded through taxation, in the same way they fund schools. Countries with the highest costs have largely left childcare to the market, with subsidies applied on top to reduce but not eliminate the burden on families.

The OECD Education at a Glance 2025 report identifies Australia and the United Kingdom as countries where private sources (meaning families) account for a relatively large share of childcare funding compared to other nations. The report notes this does not necessarily reflect inadequate government support, but it does reflect a structural difference in how early childhood care is funded compared to countries where government funding is more central.

Australia's Child Care Subsidy has made a genuine difference for many families, and the ongoing expansion of the scheme is moving in the right direction. But the data is clear: Australian families still pay significantly more than most of their OECD counterparts, even after subsidies. 

Understanding what you're entitled to, and how to make the most of the CCS, is one of the most practical things a family can do before their first day of care. Care for Kids has tools to help you estimate your subsidy and compare costs across services in your area.