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This decision gets made with a calculator and a lot of guilt, usually in the wrong order. The arithmetic is worth doing carefully, because the common version of it is wrong in a way that costs a great deal of money.
Key figures
- $13,128 National average yearly childcare cost, 2024
- 35 percent Share of median single-parent income
What childcare actually costs
Child Care Aware of America tracks prices nationally. Its 2024 analysis puts the national average price at $13,128 a year, a rise of 29 percent over five years.
Affordability, in the same analysis:
- Single parent with childrenabout 35%
- Married couple with childrenabout 10%
Child Care Aware of America, 2024 price and supply analysis, national average price against median household income for each family type.
The same report notes that in 41 states and the District of Columbia, a year of infant care in a centre costs more than a year of in-state university tuition.
The comparison most people make, and why it is wrong
The usual version: childcare costs $13,000, the lower earner takes home $32,000, so it is worth working. Or: childcare costs $24,000 in our city, the lower earner takes home $28,000, so it is barely worth it.
Two things are missing.
Childcare is a household cost, not one parent’s cost. Splitting it against a single salary produces an answer that depends on which salary you picked. Compare total household income after childcare in each scenario instead.
The cost of leaving work is not one year of salary. It is that year, plus the years of lower re-entry salary, plus lost retirement contributions and any employer match, plus lost progression. Childcare costs fall sharply once a child starts school; a career gap does not.
The three options, honestly
Centre-based daycare. Regulated, inspected, staffed by more than one adult, and it keeps working when one person is ill. Waiting lists for infant places are long, so join them during pregnancy.
A nanny or a shared nanny. Costs more for one child and can cost less for two or three, because the price does not double. Remember you become an employer, with the tax paperwork that follows.
A parent at home. Can be the right answer, particularly where infant care is scarce or a commute is long. Treat it as a financial decision with a long tail, not a free option, and consider whether reduced hours achieves most of it.
Model each option over five years, not one. Include salary growth, retirement contributions and the drop in childcare cost once school starts. The ranking often flips.
Things that change the maths
- Dependent care FSA. If your employer offers one, it lets you pay part of childcare from pre-tax income.
- The child and dependent care tax credit. Worth checking against your own numbers each year.
- State assistance programmes. Eligibility is wider than many families assume, and it varies enormously by state.
- Two children. Two infant places usually break the daycare-versus-nanny comparison in the nanny’s favour.
Before accepting a place, include daycare deposits and contract fees in the cash required to start care. Budget closures and caregiver absences separately with the backup childcare guide.
Questions people ask
How much does daycare cost per year?
Child Care Aware of America put the national average price at $13,128 in 2024. Infant care in a centre costs considerably more than that in many states.
Is it cheaper for one parent to stay home?
Sometimes in year one, less often across five years. The comparison has to include lost salary growth and retirement contributions, not just the salary forgone this year.
When should I get on a daycare waiting list?
During pregnancy in most cities. Infant places are the scarcest because the required staff ratios are the strictest.
Is a nanny more expensive than daycare?
For one child, usually yes. For two or three, often not, because a nanny's price does not multiply per child the way daycare fees do.
Where these figures come from
- Child Care in America: 2024 Price and Supply Child Care Aware of America · childcareaware.org
- It is getting more expensive to raise children Brookings Institution · brookings.edu
Figures last checked September 2026.
