How much does it cost to run a daycare monthly?
How much does it cost to run a daycare monthly?
$1,600 – $11,400 average monthly cost (in-home daycare)
$17,700 – $28,400 average monthly cost (center-based daycare)
Average cost to run a daycare
The cost to run a daycare ranges from $1,600 to $11,400 per month for an in-home daycare or $17,700 to $28,400 per month for a center-based daycare. Understanding the monthly costs of running a daycare center is crucial for effective financial planning and long-term success.
Expenses vary widely based on location, center size, and services offered, but every daycare must balance staff pay, facility costs, supplies, and other ongoing needs to stay profitable and provide quality care. The following table shows sample costs for in-home daycares and medium-sized daycare centers.
| Category | Average monthly cost (in-home daycare) |
Average monthly cost (daycare center) |
|---|---|---|
| Staff salaries / benefits | $0 – $7,000 | $12,000 – $15,000 |
| Rent / mortgage | $800 – $1,500 | $2,000 – $4,000 |
| Utilities | $200 – $400 | $600 – $800 |
| Supplies | $100 – $400 | $800 – $1,200 |
| Food | $200 – $800 | $1,500 – $2,000 |
| Insurance | $100 – $300 | $600 – $1,000 |
| Maintenance | $50 – $200 | $400 – $500 |
| Marketing | $0 – $200 | $300 – $800 |
| Technology | $20 – $100 | $200 – $300 |
| Licensing / fees | $20 – $100 | $100 – $300 |
| Contingency fund | $100 – $400 | $1,000 – $1,500 |
| Total expenses | $1,600 – $11,400 | $17,700 – $28,400 |
Staff salaries and benefits
Staff compensation is the largest expense for daycare centers, costing anywhere from $0 (if operated solely by unpaid owners or family members) to $15,000 per month, depending on the center size and teacher experience. This covers wages, health insurance, paid leave, and ongoing training.
Most daycare teachers earn $30,000 to $52,000 annually, depending on experience and credentials, while center directors can make $40,000 to $65,000 per year. Competitive benefits help attract and retain qualified staff.
Facility costs
Facility costs include rent or mortgage payments, utilities, insurance, internet, and regular maintenance. It’s important to budget for both routine upkeep and unexpected repairs. Setting aside a reserve fund ensures you can address emergencies without disrupting daily operations or compromising the safety and comfort of children and staff.
| Category | Average monthly cost |
|---|---|
| Rent / mortgage | $800 – $4,000 |
| Utilities | $200 – $800 |
| Insurance | $100 – $1,000 |
| Maintenance | $50 – $500 |
| Technology | $20 – $300 |
Supplies
Daycare center supplies cost $100 to $1,200 per month and include toys, books, art materials, and cleaning supplies to maintain a stimulating and safe environment. Refreshing inventory regularly helps prevent wear and tear and ensures children have access to age-appropriate learning tools.
Don't forget to allocate funds for curriculum changes and seasonal activities throughout the year.
Food
Food for a daycare costs $200 to $2,000 per month. Budgeting for healthy meals and snacks is essential, as centers must meet nutritional standards to support children’s growth and development.
Participation in programs like the USDA Child and Adult Care Food Program can offset costs and provide reimbursements. Providing nutritious food also reassures parents and can be a strong marketing point.
Marketing
Marketing can cost up to $800 per month and includes advertising, website maintenance, and childcare management software. Investing in marketing helps attract new families and maintain enrollment levels. Digital tools streamline administrative tasks and improve communication with parents, which contributes to the center’s growth and reputation.
Create a profile on TrustedCare.com to increase your visibility and help more parents searching for local centers discover your daycare.
Licensing and fees
State and local fees cost $20 to $300 per month on average and involve licensing, inspections, and required professional development. These expenses ensure legal operation and high-quality care. Staying current with regulatory requirements also protects your center from fines or closures and demonstrates your commitment to safety and quality.
Contingency fund
Professionals recommend setting aside $100 to $1,500 per month for a contingency fund for emergency repairs, facility renovations, new furniture, and technology upgrades. Regular upgrades keep your center competitive, improve safety, and enhance the learning environment for children and staff.
Cost factors for running a daycare
The following factors influence the cost of running a daycare:
Number of children enrolled: Caring for more children increases your revenue but also raises staffing, supply, and facility costs.
Number of employees: Staffing levels must meet legal ratios; more employees mean higher payroll and benefit expenses. More experienced, credentialed staff command higher salaries and may require additional training investments.
Location: Urban centers typically have higher rent, utilities, and wage expectations than rural or suburban areas.
Facility quality: Larger, upgraded facilities cost more in rent, utilities, maintenance, and insurance.
Type of care offered: Specialized programs (e.g., bilingual, STEM, infant care) require extra supplies, equipment, and staff training.
Hours of operation: Extended or flexible hours increase payroll, utility, and food costs.
Insurance coverage: Liability, property, and workers’ compensation insurance are mandatory and can be costly, especially for larger centers.
Tips for budgeting
Starting a daycare can be a daunting process. Follow these tips while figuring out how to start or maintain a successful daycare business:
Regularly review and adjust your daycare center budget as needed.
Track both expenses and income streams closely.
Aim for a profit margin of 10% to 20% annually.
Automate billing, payroll, and attendance to streamline and reduce errors.
Apply for government funding or private daycare grants.
Check out our guide on how to make your daycare more profitable!
FAQs about the cost to run a daycare
What are the biggest recurring expenses for a daycare center?
The largest recurring expense for most daycare centers is staff salaries and benefits, which can make up over half of the total budget. Facility costs such as rent or mortgage, utilities, and maintenance are also significant. These costs vary widely based on location, enrollment, and the type of care provided.
How do you claim daycare expenses on your taxes?
Consult a small business accountant or tax professional to ensure you claim daycare expenses accurately on your taxes. Salaries, benefits, and operating expenses are generally deductible as business costs. If you operate from home, you can also deduct a portion of your housing expenses that relate to your daycare business.
Sole proprietors report these deductions on Schedule C, while corporations deduct expenses before calculating corporate taxes. Deductible items and requirements can differ by state, so check your state’s regulations and the IRS guidelines to take full advantage of available deductions.
How can I cut my monthly expenses?
You can cut your monthly daycare expenses quite a bit by streamlining operations, optimizing staff schedules, and embracing technology to reduce administrative work. Some other tips include:
Buy supplies in bulk, track inventory closely, and avoid over-ordering.
Implement energy-efficient appliances and lighting to lower utility bills.
Consider digital solutions to save on paper and communication costs.
Review your staff-to-child ratios and use part-time or cross-trained staff to avoid overstaffing while still meeting licensing requirements.
Reduce waste by monitoring food and supply usage.
Adopt preventive maintenance to avoid costly repairs.
Using our proprietary cost database, in-depth research, and collaboration with industry experts, we deliver accurate, up-to-date pricing and insights you can trust, every time.