Childcare Costs in Canada: Daycare vs. Nanny Expenses
Debating whether you should hire a nanny or opt for daycare? It's a significant decision for your family, and there's lots to think about (a lot of which we cover here). For many families, the number one driver behind which type of childcare to choose is cost.
With the high costs of childcare in Canada, comparing daycare and nanny expenses is necessary for any parent. After all, you need a childcare option that is realistic for your family in the long term.
Childcare costs can be a major financial burden for families, especially when your children are below school age and need full-time care year-round. In this blog, we'll break down the costs associated with daycare and nanny services in Canada.
Breaking Down the Costs
Childcare bills can add up, with infant and toddler care being the most expensive. Nearly a quarter (23%) of parents don't use childcare because the costs are too high. Often, they delay their return to work instead. That's why it's so important to fully understand the expenses before committing to any childcare option.
Daycare Costs
Daycare expenses can include registration costs, monthly tuition, and charges for services like meals and extracurricular activities. The location, type of care, child's age, and services offered significantly influence daycare costs.
Childcare providers charge between $20-$58 per day in Canada, highlighting the pricing disparity. We'll explore the average daycare expenses by age throughout Canada. The following table covers full-time care (30 hours or more per week) for one child.
Overall, daycares vary between $6,906-$8,409 per year.
Canada’s $10-a-Day Program
Canada launched a $10-a-day program to reduce daycare fees. As of 2023, eligible parents should receive a credit or rebate of up to 50% on their daycare fees. The goal is for the government to continue reducing fees until an average of $10 per day is achieved in 2026. Here are the requirements:
You currently pay more than $12 per day for childcare.
Your child is under the age of six.
Your child is enrolled in a licensed childcare facility.
If your main goal is affordable care, this is a great option if you meet the requirements. However, high demand has led to extensive waiting lists, so make sure you sign up early. Keep in mind that you must pay daycare fees upfront before you are reimbursed.
Nanny Costs
Nanny expenses consist of hourly rates, taxes, and benefits. The cost of a nanny varies based on experience, qualifications, and responsibilities. Focusing on live-out nannies, the average hourly wage in Canada is between $14-$28 per hour.
If we take the median of $17 per hour for full-time hours (30 hours per week), it costs $26,520 per year ($2,210 per month and $104 per day).
Cost Comparison: Daycare vs. Nanny
While nannies come with a higher price tag, they offer benefits and can offer other household help. If you are thinking of hiring a housekeeper or other services anyway, it could make more sense to combine it with a nanny position.
Plus, if you have more than one kid, the daycare costs in our table above will double for each additional child. Let's say you have a two-year-old and a four-year-old; the yearly cost is $15,315 per year, closing the cost gap between the options.
If it's within your budget, we recommend a nanny for personalized care. By comparing daycare and nanny expenses and weighing factors like flexibility and convenience, families can make informed decisions that align with their financial and childcare needs. Remember, the key is to focus on what's best for your family while being mindful of the associated costs.