2026–27 Indexed each 1 July
Child Care Subsidy Income Thresholds (2026–27)
Every income band that changes your subsidy, in one place — the standard rate for your first child in care, and the higher rate for second and younger children. Both tables are the government’s own 2026–27 figures.
Standard rates — first child aged 5 or under
| Combined family income | Subsidy percentage |
|---|---|
| Up to $88,520 | 90% |
| More than $88,520 and below $538,520 | Falls by 1 percentage point for every $5,000 of family income |
| $538,520 or more | 0% |
percentage = 90 − [(income − $88,520) ÷ 5,000]
Rounded to two decimal places. Worked example: on $288,520 the percentage is 90 − (200,000 ÷ 5,000) = 50%. That is the same example the government uses to explain the calculation.
Higher rates — second and younger children
These apply only where you have more than one child aged 5 or under in care. Your eldest child in care always uses the standard table above.
| Combined family income | Subsidy for second and younger children |
|---|---|
| Up to $146,437 | 95% |
| More than $146,437 to below $191,437 | Falls to 80% by 1 point for each $3,000 of family income |
| $191,437 to below $270,727 | 80% |
| $270,727 to below $360,727 | Falls to 50% by 1 point for each $3,000 of family income |
| $360,727 to below $370,727 | 50% |
| $370,727 or more | Higher rates no longer apply — every child gets the standard rate |
$146,437 to $191,437: percentage = 115 − [(income − $86,437) ÷ 3,000]
$270,727 to $360,727: percentage = 80 − [(income − $270,727) ÷ 3,000]
Both are rounded to two decimal places. The formulas look odd at the top of their range (115%) because they only start to bite once income passes the threshold above them.
Both tests side by side
| Combined family income | First child aged 5 or under | Second and younger children |
|---|---|---|
| $120,000 | 83.7% | 95% |
| $200,000 | 67.7% | 80% |
| $300,000 | 47.7% | 70.24% |
| $400,000 | 27.7% | Standard rate only |
At $200,000 the gap between the two rates is at its widest — 67.7% for your eldest in care against 80% for the next one. That gap is the whole point of the higher rate: it targets families with more than one child too young for school.
What counts as income
Centrelink uses adjusted taxable income, which is wider than the taxable income on your return. It includes:
- your taxable income, and your partner’s, added together
- reportable fringe benefits
- reportable superannuation contributions, including salary sacrificed amounts
- total net investment losses, such as a negatively geared rental property
- target foreign income, and tax free pensions or benefits
- any child support you paid that you claimed as a deduction
Salary sacrificing into super does not hide income here. Reportable super contributions are added back, which is different from the way the Medicare levy surcharge income test works.
Frequently asked questions
What income does the Child Care Subsidy use?
Your family’s combined adjusted taxable income — the same measure Centrelink uses for family assistance. It starts with your taxable income and adds items such as reportable fringe benefits, reportable super contributions, net investment losses and any tax free pensions. It is not just your salary, and it is combined with your partner’s.
What is the income cut off for child care subsidy?
The subsidy percentage reaches 0% at $538,520 of combined family income. Below that you are still entitled to something, even if it is a very small percentage. Separately, the higher rate for second and younger children stops applying at $370,727.
How fast does the subsidy drop as I earn more?
In the standard range it falls by 1 percentage point for every $5,000 of family income. Between $88,520 and $538,520 that is 90 points over $450,000 of income.
Do I need to tell Centrelink if my income changes?
Yes. Your subsidy is based on your estimated income for the year, and it is reconciled after you and your partner lodge your tax returns. If you were paid too much you will owe a debt, which is exactly what the 5% withholding is there to soften.
Are the thresholds the same every year?
No — they are indexed by CPI each 1 July. The 2026–27 thresholds on this page took effect from Monday 6 July 2026. Check back after each 1 July, or use the calculator, which always carries the current year.
Next
- Child Care Subsidy calculator — see what these percentages are worth per hour
- Hourly rate caps — the ceiling your percentage is applied to
Thresholds from Department of Social Services — Family Assistance Guide, checked 12 October 2026.