Why is daycare so expensive? The bill in 28 US metros

By Skyler Bissell · August 2, 2026 · 7 min read

Two children in full-time daycare cost a New York household $55,600 a year at our engine's rates, and an Atlanta household $20,800. Same two kids, aged 2 and 4, same forty-odd hours a week of care, same country. The number that surprises people is not the New York one. It is the distance between them, because nothing in that gap is tax, currency, or quality. It is a price, set by two things a parent cannot shop around.

I priced this out because the question shows up constantly in relocation math and nobody answers it with numbers. Somebody weighing an offer wants to know whether daycare is expensive everywhere or expensive where they happen to live. So here is the answer for 28 US metros, and then the mechanics underneath it.

What two kids in daycare costs, metro by metro

Every row below is the same household: a 2-year-old in a full-time infant or toddler room and a 4-year-old in a preschool room, priced at the metro's own market rate. "Full price" is what the centers bill. "After the FSA" nets off the roughly $2,000 a year that a Dependent Care FSA saves a high earner against its pre-tax cap. The last column shows the bill as a share of take-home for a two-earner household on $185,000, split 60/40, so the same dollar figure can be read against the paycheck it comes out of.

Six of the 28 take more than 30% of take-home. New York takes 41.9%, which is more than that household pays in federal, state, city and payroll tax combined at the same income. A family in Atlanta hands over 14.8%. Neither family chose their ratio; they chose a city, and the daycare bill came with it.

The staffing ratio sets the floor

Start with the thing that makes childcare different from every other service a household buys. A restaurant serves more covers per waiter when it gets busy. A gym sells memberships to people who never show up. A daycare cannot do either, because the number of adults in the room is written into its licence.

Infant rooms in most states run near one adult to four children. Preschool rooms run closer to one adult to ten. That single rule does three things at once. It fixes the maximum revenue per teacher, so payroll becomes the large majority of the bill. It removes the usual lever for cutting costs, because you cannot serve more families per employee. And it prices infant care above preschool care in almost every market: New York charges $2,800 a month for an infant place against $2,400 for a preschooler, San Francisco $3,000 against $2,400, Seattle $2,400 against $1,900, Austin $1,350 against $1,050.

So when someone says daycare "should" cost less, the honest reply is that the price is a headcount times a wage, divided by the number of children the state lets that head supervise. There is not much slack in that equation. What slack exists tends to come out of teacher pay, which is why early-childhood wages sit near the bottom of the US distribution while parents feel gouged. Both things are true at once.

Rent is the other half of the bill

The second driver is the one that explains the spread across the table. A daycare needs square footage per child, near where parents live or work, on a commercial lease. That is the same real estate every other business in an expensive city is bidding for, and it lands in the fee.

Line the table up against rent and the ordering is close to identical. The metros at the top are the metros where commercial space is scarce and expensive: New York and San Francisco at $57,600 full price, Boston at $52,800, Washington DC and Los Angeles at $48,000. The metros at the bottom are the ones with land: Atlanta at $22,800, San Antonio at $23,400, Dallas and Phoenix and Las Vegas at $24,000. Wages move in the same direction as rent, so the two drivers compound rather than offset.

Which is why the comparison worth running is the bill against what the metro also pays you. Seattle's $43,600 lands at 30.0% of take-home. Miami's $29,200 lands at 19.8%. The dollar gap is $14,400 and the share gap is ten points, because Miami's smaller bill also arrives with no state income tax behind it. If two offers are on the table, that interaction is the whole game, and it is what the cityparity calculator exists to settle.

What the US gives back, and what it does not

Here is where the American answer diverges from every other rich country. There is no universal fee cap, no free tier, and no direct payment to the provider. What exists is delivered through the tax code, and it thins out fast as income rises.

The Dependent Care FSA lets a household set aside roughly $5,000 pre-tax against care costs, which is worth about $2,000 a year in saved tax to a high earner. That is the figure in the "after the FSA" column, and note what it is not: it does not scale with the number of children. Two kids in care, three kids in care, same $2,000. On a New York bill it covers eleven days.

The Child Tax Credit is the larger of the two, and our engine models a New York household at $2,200 per child once the federal credit and the Empire State Child Credit are blended, so $4,400 for two. It is not a childcare benefit and does not vary with whether you use childcare at all, but it is real money and it survives at professional incomes, because its phase-out starts far above them. Set both against the New York bill and the offsets cover $6,400 of $57,600.

There is a third layer, and it is the one that catches people out. Some cities run income-tested subsidy schedules with genuine value: San Francisco's is worth a full credit against a $2,115-a-month preschool place, and it stops dead at a household income line. If you are anywhere near that line, the US childcare subsidy income limits are worth reading before you negotiate a raise.

What a capped system does instead

The ratio rule is not an American invention. Every rich country regulates adults per child, and the labour cost that follows is broadly similar. What differs is who pays it. Norway caps the parent's share by law at a maksimalpris and funds the rest, so two children in Oslo cost NOK 34,080 a year whatever the centre's real costs are. Berlin funds the place directly and bills the family for meals. Amsterdam charges close to full price and refunds a share afterwards through a benefit.

Those are three different mechanisms with one thing in common: the family's exposure is decoupled from the provider's cost base. In the US the family absorbs the cost base in full, minus $2,000. That single design choice is most of the reason the same two children cost $55,600 in one country and a fifth of that in another. You can see the whole spread on our childcare costs by country table, and the family-level consequences in the cost of raising kids comparison.

Daycare is a five-year problem. That is what makes it survivable, and it is also what makes it expensive: $55,600 a year in New York, five years running, is $278,000 spent before either child reaches kindergarten. Our New York vs Berlin family comparison runs those same five years with taxes and rent attached.

FAQ

Is daycare cheaper if you enrol two children?

Barely. Most US centers offer a sibling discount in the range of 5 to 10 percent on the second child, which is small against a bill that doubles. The reason is that the cost driver is staff time and a second child needs a second seat in a ratio, so the center saves on billing and enrolment paperwork and almost nothing else. Capped systems abroad work the other way: Norway discounts the second child by 30 percent by national rule.

Why is infant care more expensive than preschool?

Because the required adult-to-child ratio is roughly twice as strict. A room of 4-year-olds can run at one adult to ten children in many states, while an infant room runs closer to one adult to four. The same teacher salary is spread over fewer fee-paying families. In our per-metro rates the gap is visible in almost every city: New York charges $2,800 a month for an infant against $2,400 for a preschooler, and San Francisco charges $3,000 against $2,400.

Do daycare workers earn the money parents pay?

No, and that is the part that makes the price feel unfair from both ends. Payroll is the large majority of a center's cost, but early-childhood wages sit near the bottom of the US wage distribution, which is why turnover runs high and why centers close rather than raise pay. Parents pay a price set by a legally mandated headcount, and the headcount is filled by some of the lowest-paid workers in the country.

Will daycare get cheaper when my child turns three?

In the US it drops a little, from the infant rate to the preschool rate, and in some cities a free public pre-K place is available at 3 or 4 if you win one. In most of Europe the fall at 3 is a cliff, because a free or near-free universal tier begins there. Paris, Madrid, Milan and Tokyo all switch to a free-tier residual at 3 in our data, which is why a French family's daycare bill collapses to about €10,800 a year for two children while a New York family's stays at $55,600.

More in this series

• Childcare subsidies and US income limits: where the help stops, in dollars.
• 30 hours free childcare UK: what a London family pays after the entitlement.
• Kita cost Germany: the eight-city spread, and the five that bill nothing.
• Barnehage cost Norway: how one national cap prices four cities identically.
• Kinderopvangtoeslag for expats: the Dutch refund, worked line by line.

Sources. Per-metro market rates come from Care.com's regional surveys and, for Seattle, Child Care Aware of Washington's 2024 state report; the underlying national picture is in the US Department of Labor's National Database of Childcare Prices. The Dependent Care FSA limit and the dependent-care rules behind the $2,000 figure are in IRS Publication 503. Field-level provenance and dates are in data/_meta.json; the method is on the methodology page.

Figures here come from cityparity's per-city engine and were current at publication; market rates, subsidy caps and tax rules move, so treat any single number as a strong estimate and run your own inputs. See the methodology.