CCS Income Thresholds and Your Percentage
The main CCS income threshold for 2026 to 27 is $88,520: families at or below it receive the maximum 90% subsidy. Above it, your percentage slides down by one point for every $5,000 of family income until it reaches zero at $538,520. Younger siblings can receive a separate, higher rate. This page sets out every threshold, shows the taper at work and explains exactly which income counts.
If you are estimating your income for a claim, checking why your percentage changed, or comparing what a pay rise will do to your childcare costs, this page is for you. It shows the thresholds, the taper, four worked examples, the sibling rate, the income that counts and how the numbers move each year.
For eligibility, hours and applying, see our Child Care Subsidy overview.
How income sets your subsidy percentage
Your subsidy percentage is set by one figure: your family's adjusted taxable income for the financial year, estimated when you claim and checked after tax time. The key CCS income threshold is $88,520. Below it you receive 90%; above it the percentage tapers, and hours, fees and the hourly cap then decide what that percentage is worth.
Family income means both partners added together, if you have a partner. A single parent's own income is the family income.
The percentage is applied per hour of care, up to the government's hourly cap, so a higher percentage lowers every day's gap by the same share.
Your income estimate is only an estimate. Services Australia pays you on it during the year, then balances once your actual income is known.
The income used is for the financial year that the care falls in, July to June. Care in September 2026 is subsidised on your estimate for 2026 to 27, even though your latest tax return covers the year before.
That is why the estimate matters so much: an estimate that is too low means you are paid too much subsidy and repay the difference later.
Three facts to remember
- Combined family income counts
- It is estimated, then balanced
- The percentage applies up to the cap
Income sets the rateThe current thresholds table
For 2026 to 27 there are two sets of thresholds. The standard rate applies to most children and runs from 90% down to zero. The higher rate applies to younger siblings aged 5 or under in families with more than one child that age in care, and runs from 95% down to 50% before it stops.
| Rate | Family income | Subsidy percentage |
|---|---|---|
| Standard | $0 to $88,520 | 90% |
| Standard | Over $88,520 to below $538,520 | Falls 1% per $5,000 |
| Standard | $538,520 or more | 0% |
| Higher | $0 to $146,437 | 95% |
| Higher | Over $146,437 to below $191,437 | Falls 1% per $3,000, 95% to 80% |
| Higher | $191,437 to below $270,727 | 80% |
| Higher | $270,727 to below $360,727 | Falls 1% per $3,000, 80% to 50% |
| Higher | $360,727 to below $370,727 | 50% |
| Higher | $370,727 or more | Not available; standard rate applies |
Source: Services Australia pages on income and the standard rate and the higher rate for younger children, September 2026.
How the taper works
The taper is the gradual reduction in your percentage as income rises. On the standard rate it is continuous: every dollar above $88,520 trims the percentage a little, at the rate of one percentage point per $5,000, and Services Australia shows the result to two decimal places. There are no cliffs where a small pay rise suddenly costs you a big step.
To work out your own figure, subtract $88,520 from your family income, divide by 5,000, and take that away from 90.
At $120,000, for example, the sum is 90 minus 6.296, which gives 83.70% once rounded down to two decimals.
Because the taper is smooth, there is no reason to turn down extra hours or a promotion to protect your subsidy. You always keep most of every extra dollar you earn.
The higher rate tapers faster, at one point per $3,000, but only in two bands, with flat stretches at 80% and 50% between them.
A useful rule of thumb: on our $170 day, each $5,000 of extra family income adds about $1.67 to your daily gap on the standard rate.
Do the sum yourself
- Step 1
- Income minus $88,520
- Step 2
- Divide by 5,000
- Step 3
- 90 minus the result
A gentle slopeWorked examples at four income levels
At four family incomes, the standard subsidy on a $170 day at Lead ranges from 85.70% at $110,000, leaving a gap of $26.80, to 43.70% at $320,000, leaving $96.98. The table also shows three days a week, the most common booking pattern under the 3 Day Guarantee.
| Family income | CCS rate | Subsidy per day | Gap per day | Gap for 3 days |
|---|---|---|---|---|
| $110,000 | 85.70% | $143.20 | $26.80 | $80.40 |
| $165,000 | 74.70% | $124.82 | $45.18 | $135.54 |
| $225,000 | 62.70% | $104.77 | $65.23 | $195.69 |
| $320,000 | 43.70% | $73.02 | $96.98 | $290.94 |
Behind each row: the government subsidises up to $15.19 per hour, and our session runs 11 hours, so the most any percentage can apply to is $167.09 per day. Our hourly fee sits just above the cap, so a small part of every day is always yours to pay.
The gap between the first and last family is about $70 a day. Over three days a week for a year, income alone accounts for more than $10,000 difference in what two families pay for identical care.
If your income sits between two rows, your gap sits between them too. Families near $110,000 and $165,000 differ by about $18 a day, which shows how gradually the taper works across the middle incomes most St Ives families fall into.
Try your own income in our online cost estimator.
The higher rate for second and younger children
When two or more of your children aged 5 or younger attend care and the family earns under $370,727, your younger children receive a higher rate. The eldest of those children stays on the standard rate. The younger ones get 95% up to $146,437 of family income, then a separate taper that reaches 80%, then 50%.
At $165,000 of family income, the older child receives 74.70% and the younger 88.81%. On a $170 day that means gaps of $45.18 and $21.61.
At $225,000, the younger child sits on the flat 80% band, with a daily gap of $36.33, while the older child's gap is $65.23.
Twins are treated the same way: one is automatically made the standard-rate child and the other receives the higher rate.
You do not apply separately. Services Australia works it out and applies it automatically once both children are enrolled in care.
The higher rate ends when the eldest child turns 6 or leaves care, if that leaves only one child aged 5 or under.
Two children at $165,000
- Older child
- 74.70%, gap $45.18
- Younger child
- 88.81%, gap $21.61
- Both, per day
- $66.79 together
Help for siblingsWhat income counts
CCS uses adjusted taxable income, which is broader than your salary. It starts with taxable income, including wages, bonuses, overtime, business profit, interest, dividends, rent and capital gains, then adds foreign income, net investment losses, reportable fringe benefits, reportable super contributions and certain tax-free pensions. Child support you pay is taken off.
Salary packaging and extra super contributions do not escape the test. Reportable fringe benefits and reportable super contributions are added back.
Negative gearing losses are added back too, so an investment property loss does not lower your figure for CCS.
Self-employed parents and sole traders use their business profit after allowable deductions, as it appears in their tax return.
Distributions from a family trust count in the income of whoever receives them.
If your income changes during the year, for example a parent returns from leave or a business has a strong quarter, update your estimate straight away so fortnightly payments stay close to your real entitlement.
Some payments do not count, including Family Tax Benefit and the Child Care Subsidy itself.
Added to taxable income
- Foreign income
- Net investment losses
- Reportable fringe benefits
- Reportable super contributions
- Some tax-free pensions
More than salaryWhen thresholds are indexed
CCS income thresholds are indexed each year on 1 July, in line with inflation, so they rise a little every financial year. The main threshold moved from $85,279 in 2025 to 26 to $88,520 for 2026 to 27. Hourly rate caps are updated at the same time.
Indexation means a family whose income grows at the same pace as prices keeps roughly the same percentage.
Indexation applies to both sets of thresholds, the standard rate and the sibling rate, so all the figures in the table above change together each July.
A pay rise bigger than inflation lowers your percentage slightly, while a smaller one can nudge it up.
Your subsidy for each financial year is balanced against that year's thresholds, so check the new figures each July when you update your estimate.
We review this page every July. If you are unsure which figures apply to you, our team can help on (02) 7238 8668, and our St Ives childcare centre home page has everything else.
Standard threshold by year
- 2025 to 26
- $85,279
- 2026 to 27
- $88,520
Updated each JulyIncome thresholds, answered
What if I earn over the cap?+
If your family income is $538,520 or more, your standard subsidy rate is 0%, so you pay the full fee. You can still claim, and if your actual income turns out lower, Services Australia pays what you were entitled to after balancing. Claiming keeps you covered if your income drops unexpectedly.
Is it household or individual income?+
It is family income, meaning your adjusted taxable income plus your partner's, if you have one. A single parent is assessed on their own income only. After separation, each parent claiming for the days they pay for is assessed using the income of their current household.
What about family trusts or ABN income?+
Business income under an ABN counts as the profit after allowable deductions, as shown in your tax return. Family trust distributions count in the income of the person who receives them. Estimate both carefully, and consider a higher estimate if your income is uneven, to avoid a debt at balancing.
Know your numbers before you enrol
We are happy to walk through your likely gap on a tour or over the phone.