Child Care Subsidy income thresholds: how much do you get at every income level?
last updated: march 2026
catherine alderstein is an early childhood policy researcher and mother of two from Melbourne. she covers government payments, childcare policy, and family economics for mini mode.
the Child Care Subsidy is the single biggest factor in what childcare costs your family. but the income thresholds that determine your rate aren't exactly intuitive — they use a two-tier taper system that drops your subsidy percentage as your household income rises.
this guide walks through every income bracket so you know exactly what CCS rate to expect, and where the biggest drops happen.
how the CCS taper works
the Child Care Subsidy uses your family's combined adjusted taxable income (ATI) to set your subsidy percentage. for 2025-26, it works like this:
- $85,279 or below — you get the maximum rate of 90%
- $85,279 to $175,279 — the rate drops by 1 percentage point for every $5,000 of income above $85,279 (this is the steeper taper)
- $175,279 to $535,279 — the rate drops by 1 percentage point for every $10,000 of income above $175,279 (slower taper)
- $535,279 and above — CCS rate is 0%
the first taper is the one that bites hardest. between $85,279 and $175,279, your subsidy drops 18 percentage points across a $90,000 income range. that's a meaningful reduction for families in the $100K–$170K combined income bracket where most dual-income households sit.
CCS rates at key income levels
here's a quick reference showing CCS percentages at common income points. these are based on the 2025-26 thresholds:
| family income (ATI) | CCS rate | taper zone |
|---|---|---|
| $80,000 | 90% | maximum rate |
| $85,279 | 90% | threshold start |
| $100,000 | 87% | taper 1 |
| $120,000 | 83% | taper 1 |
| $150,000 | 77% | taper 1 |
| $175,279 | 72% | taper 1 ends |
| $200,000 | 70% | taper 2 |
| $250,000 | 65% | taper 2 |
| $350,000 | 55% | taper 2 |
| $450,000 | 45% | taper 2 |
| $535,279+ | 0% | no subsidy |
notice how the rate holds at 90% until you cross $85,279, then starts falling relatively quickly through the first taper. once you hit $175,279, the decline slows — you only lose 1 percentage point per $10,000 instead of per $5,000.
what counts as income for CCS
Services Australia uses adjusted taxable income (ATI), not just your salary. ATI includes:
- taxable income (salary, wages, business income)
- reportable fringe benefits
- total net investment losses (negative gearing)
- reportable superannuation contributions (salary sacrifice into super)
- certain tax-free government payments
it's the combined ATI of both parents in the household. this catches common strategies like negative gearing — even though investment losses reduce your taxable income, they get added back in for CCS purposes.
however, there are legitimate ways to reduce your ATI. salary sacrificing into super above the reportable threshold doesn't always add back fully, and structuring your income correctly can shift you into a higher CCS bracket.
the real dollar impact
percentages are abstract — here's what the taper means in actual dollars. assuming a centre charging $140/day and three days per week (the guaranteed minimum under the three day guarantee):
- at $100K (87% CCS): you pay $54.60/week → $2,839/year
- at $150K (77% CCS): you pay $96.60/week → $5,023/year
- at $200K (70% CCS): you pay $126.00/week → $6,552/year
- at $250K (65% CCS): you pay $147.00/week → $7,644/year
the jump from $100K to $150K income costs you an extra $2,184 per year in childcare. from $150K to $200K, it's another $1,529. these are real numbers worth factoring into decisions about returning to work, second incomes, and salary packaging.
frequently asked questions
what income do you need to get the maximum Child Care Subsidy?
families with a combined adjusted taxable income of $85,279 or less receive the maximum CCS rate of 90% for the 2025-26 financial year.
at what income do you lose the Child Care Subsidy completely?
the CCS reduces to 0% at a family income of $535,279 or above. between $85,279 and $535,279, the subsidy tapers down gradually.
how does the CCS taper work?
the CCS uses a two-tier taper. from $85,279 to $175,279, the subsidy drops 1 percentage point per $5,000 of income. from $175,279 to $535,279, it drops 1 percentage point per $10,000.
what is adjusted taxable income for CCS purposes?
ATI includes your taxable income plus reportable fringe benefits, net investment losses, reportable super contributions, and certain tax-free government payments. it's the combined ATI of both parents.
check your rate
the quickest way to find your exact CCS percentage and out-of-pocket costs is to run the numbers through our calculator.