How Much Does a Childcare Provider Make?

How Much Does a Childcare Provider Make

So here is another tricky question.  Today I am asking “Do You Know How Much You Make?”  Now I know that most providers are aware of what their childcare rates are.  And you probably know what you bring in on a weekly or monthly basis.  But do you know what that equates to on an hourly basis?  Well, since I believe knowledge is power I think it might be a good idea to investigate …  How Much Does a Childcare Provider Make

How Much Does a Childcare Provider Make?

How Much do you REALLY Make?

I have to admit for probably quite a few years, I didn’t really know how much I made.  Seriously!  I could probably cite my full-time or part-time rate without thinking, but ask me what my salary was and I would have been stumped.  How Much Does a Childcare Provider Make

So why is that important?

Well, it can be really important.  Especially if you are just starting your childcare business.  Without breaking it down, you could be pricing your services below what you are worth and even more importantly what you can afford to earn.

Break it down hourly

It really is easy to figure out

So let’s do the math, shall we?  It really is easy to figure out.  Take a look at this chart (below).  To figure out the hour rate, we need the Weekly Tuition Rate and Hours Daily/Weekly that a client uses the childcare.  From there we can calculate both the daily rate and hourly rate.  How Much Does a Childcare Provider Make

This chart* assumes that a provider has a 9-Hour daily cap and therefore works about 45 hours a week.  Look what the hourly rate equates to based on the weekly rate.

What’s that Weekly

Now let’s look at the same weekly rate, but change the number of care hours per day.  This time a provider has a slightly longer day of 10 hours and works 50 hours per week.  Look how much the hourly rate decreases just by extending the day by 1 hour.

the hourly rate decreases just by extending the day

So even if you charge the same $200.00 weekly tuition your hourly rate decreases from $4.44 to $4.00 by working 10 hours instead of 9 hours.  The thing to note here is if you work even longer the rate will continue to decrease.

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Do a few cents really matter?

Now you may be asking yourself “Do a few cents really matter?”  Well, if we take that $0.44 rate decrease and multiply that by 50 hours per week that totals $22.00 per week of lost earnings.  $22.00 multiplied by 4 weeks equals $88.00 per month of lost earnings.  I could go on to annually, but I think you get the point.  It matters!


More Kids More Money

An argument could be made that while the hourly rate may be low, when you account for multiple clients the provider actually earns more than the basic hourly rate.

True, but … How Much Does a Childcare Provider Make

No matter that it’s accumulative salary by multiple clients, the base rate remains considering that clients come and go.  In other words, most providers (I don’t know of any) don’t charge their clients more or less depending on how many clients they have.  So whenever the enrollment dips, the hourly rate could make a huge difference.

Consider this

What about compared to Minimum Wage?

Despite the education/experience, a provider has most of us work for much less than the minimum wage.  In fact, most providers don’t even get close to the hourly minimum wage.

Work longer hours

Additionally, most providers work longer hours than their clients.  Truthfully, many providers work even longer than the 10 hours depicted here.  And when you consider how providers struggle to encourage on-time pickups, even those hours can be extended.  Again, a longer day constitutes a lower rate of pay.  Simply put, the longer you work the less you make. 

Earning a living wage

Just let me say that I know for the most part most childcare providers are not in the profession to get rich.  That being said, providers work hard and deserve to earn a living wage.

Over the years I have witnessed quite a few providers throw in the towel and leave childcare simply because they did not earn a sustainable income.

I could not afford to discount my services

Remember when I said that years ago I was actually ignorant of what I really earned?  Well, when I finally did sit down and run the numbers I realized much more than what I actually earned.  I realized that I could not afford to discount my services and sustain my business.

Of course, providers need to look at things like local competitive rates, demographics, and competition.  But in doing so, we need to consider the needs of our individual businesses.  While it might seem like a good idea to be the lowest rate in town, it might not be a sustainable business strategy.

I wrote this post to encourage providers to do the same.  To actively and routinely look at what they are earning. By doing so and perhaps by make adjustments they can use the information to continue to maintain and grow their businesses.

*Chart rounds to nearest dollar
Do you know how much you make?  Have you run the numbers – really?  Please leave me a comment below and tell me if you feel your hourly rate is what you thought it was.
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