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Marissa Schneggenburger

How to Establish Your Childcare Center’s Tuition Rates

  • May 5, 2022

Your childcare center’s tuition rates dictate the financial health of your business. It’s important to set the correct rates to ensure you can cover all of your expenses while remaining competitive. Once you understand your budget, you will have a better idea of your expenses which will help you establish your center’s tuition rates. 

Deciding what to charge families is based on a wide range of variables. From schedules, competitors, schedules, and more, there’s a lot to consider when establishing tuition rates. In this article, we’ll outline the most important factors when establishing tuition rates as well as how to automate your billing. 

Research Competitors

Look at your competitors’ rates both within your neighborhood and throughout your city. Take note of what kind of discounts and promotions they offer. You want to charge competitive rates so you don’t become an outlier when it comes to cost. 

Set Consistent Schedules

Be consistent on what schedules you are going to offer. If you offer part-time, you may have trouble filling that child’s off days. If you offer a half-day rate and a full-day rate, you need to decide how valuable each slot is and be mindful of how you are filling the rest of the half-day. 

Note: Tools like Kangarootime’s childcare software can help you understand FTE at your center and manage and boost enrollment. 

Be Mindful of Ages and Ratios

The younger the child, the higher the rate. Infants will be more expensive due to the ratio required of caretakers to children. As a child gets older, the ratios are higher, allowing the rates to be lower. Keep in mind that as children age up, they will need to change rooms. This is especially important for young children who age up faster. You will want to manage your waiting list and get your pipeline ready to fill spots as children age up. 

Account for Occupancy

Be mindful of how many rooms you have, the age group associated with each room, and the different levels of occupancy of each room. Try to keep the occupancy number as high as possible – 85% is a good target. The better you manage occupancy, the better you’ll manage revenue. 

Stay Consistency

Be consistent with your rates. Whether they’re weekly, monthly, bi-weekly, etc. make sure they’re firmly established. Additionally, don’t charge parents different rates. Avoid this by putting your rates into writing and making your policies clear. 

Charging Fees

There are a number of fees you may need to charge your families depending on the circumstances. Be sure to outline these in your policies and stick to them. These fees could include: 

  • Bounced payment fees
  • Late payment fees
  • Late pick-up fees
  • Registration fees
  • Deposits 
  • Meal fees
  • Supplies

Automate Your Billing Process

Once you’ve set your tuition fees, you’re ready to start charging parents and collecting payments. The easiest way to do this is by automating your billing and invoicing process. A childcare management software like Kangarootime makes this possible.  

Using software you can save time and stay organized. This platform allows you to:

  • Customize Billing Cycles and Fees
  • Monitor Financial Reports
  • See Flagged Payments
  • Automatically Collect Payments
  • Pass on Credit Card Fees
  • Apply Discounts and Additional Fees

And more! Basically, whatever you need to manage your billing, we can take care of it. 

Once your tuition rates are set and your billing cycles are organized, you can start automatically collecting payments. This will improve the financial health of your business and make your job as a childcare center owner easier.

Kangarootime is the leading all-in-one childcare management software for daycares and preschools. With billing and invoicing capabilities, parent communication and staff management tools, and classroom automation, Kangarootime helps childcare centers grow and scale. To learn more about optimizing your center with Kangarootime, visit

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