Daycare (Child Care) Contract Template

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Updated June 27, 2022

The daycare contract allows a parent to hire the services of a daycare business or in-home childcare person (babysitter) to take care of their child. A daycare is commonly a place of business where the parent will drop-off their child and pick up again at a later time. Daycares are predominantly for working parents during the workweek, Monday to Friday, providing childcare after school. Depending on the age and length the child stays at the daycare, responsibilities may include meals, helping with homework, and any other similar responsibilities.

Table of Contents

What is a Daycare?

A daycare is a place of business that parents may utilize to provide care for their children when they are at work or other obligations. openings, hours per week, transportation, trips,

Daycare Types

  • 24-Hour – If a parent is seeking to have their child stay overnight.
  • Center-Based – Child is dropped off at a commercial daycare location.
  • Gym – For parents looking to get a workout and have their child be entertained.
  • Home-Based – Child is dropped off at a residential daycare location.
  • Infant/Toddler – Full-service and usually more money requiring the necessary care and nurturing of the child.

Home-Based vs Center-Based

The two (2) types of daycare are home-based and center-based. They are both generally utilized on a scheduled basis matching the parents’ work schedules.

Home-Based is commonly

  • More Affordable
  • Fewer Children
  • Flexible Hours

Center-Based is commonly

  • More Expensive
  • More Children
  • Stricter Hours

Daycare Requirements

Daycares are regulated by each State’s childcare administration office establishing laws related to building and safety codes in addition to how many adults must be available per children. Every daycare must hold a license and be in good standing in order to be located in each State’s daycare registry.

In addition to State laws, there may be local laws and required building codes attributed to daycare centers.

Daycare License Lookup

Click on the State below to perform a license search for a daycare facility:

How Much is Daycare?

National Average (monthly basis):

*Based on 25 hours per week.

50-State Pricing ($): 50-State Map (ChildcareAware.org)

Is Daycare Cheaper than a Nanny?

Yes, in most cases. The national average for a nanny is $19.14/hour (source: NannyLane.com).

Calculation – If we use the data above (25 hours/week) and account four (4) weeks in a month we have 100 hours/month. Now we take the average center-based is $1,230/month which equals $12.30/hour and the average center-based childcare is $800/month which equals $8/hour.

Daycare Costs vs Nanny Costs

  • Nanny: $19.14/hour
  • Center-Based Daycare: $12.30/hour
  • Home-Based Daycare: $8/hour

Is Daycare Tax Deductible?

Yes, up to $1,050 for a single parent and $2,100 for both parents. Only children that are below the age of 13 qualify unless the parent has a child with physical or mental disabilities.

  • IRS Form 2441 – Use this to file for the tax deduction (credit) at the end of the fiscal year.

Calculation

The tax credit is calculated as a percentage, a maximum of 35%, of $3,000 per parent. The amount of the tax deduction depends on the income of the parents. (see table below)

  • $0 to $15,000: 35%
  • $15,000 to $17,000: 34%
  • $17,000 to $19,000: 33%
  • $19,000 to $21,000: 32%
  • $21,000 to $23,000: 31%
  • $23,000 to $25,000: 30%
  • $25,000 to $27,000: 29%
  • $27,000 to $29,000: 28%
  • $29,000 to $31,000: 27%
  • $31,000 to $33,000: 26%
  • $33,000 to $35,000: 25%
  • $35,000 to $37,000: 24%
  • $37,000 to $39,000: 23%
  • $39,000 to $41,000: 22%
  • $41,000 to $43,000: 21%
  • $43,000+: 20%

Calculation Example

If a single mother makes $30,000 per year, her tax deduction would be 27% (.27) multipied by $3,000 equaling $810.

Daycare Contract Samples

Sample 1 (simple)

Download: Adobe PDF

Sample 2 (advanced)

Download: Adobe PDF

Related Agreements

Babysitting Contract – For the hiring of a babysitter to supervise children for a temporary period.

Nanny Contract – For the hiring of a nanny to supervise children for a long-term period.