Daycare rates

[sandylynn]

Hi there, I am new to this forum. I haven't raised my rates in years....I look at the providers advertising on this forum and how much they charge....I can't believe how much I am UNDERCHARGING....als o I always have parents who want a lower rate with no receipt. Does anyone provide this agreement. Thanks

[gravy_train]

Sounds like it might be time to increase your rates! Increasing the average price of care in your neighbourhood is beneficial to everyone. There is a difference between undercutting your competitors and being competitive. We work very hard, deal with a high stress level and have high liability for very little pay - if you feel you are undercharging than by all means raise your rates!
To provide care without receipts is illegal. My business is legitimate in every way and that includes giving receipts and claiming my income.
Good luck!

[mimi]

I recently raised my rates $2.00 per day. I sent a letter home simply stating the increase and effective date. No excuses or explanations. At the bottom though I did put that the last increase had been in January 2010.
I didn't hear any complaints the following day from the parents.:)

[2cuteboys]

I agree. There was a post not too long ago about someone who had agreed to do a lower fee to not claim (not give receipts) and at the end of the year the family asked for one anyway. The poster had no choice, as ITS NOT LEGAL. And she couldn't exactly report them going against their initial agreement, because she shouldn't have agreed to it in the first place.

I do think you deserve a raise though!

[5 Little Monkeys]

I think if you are charging below the going rate for where you are than it's time to raise it!! I charge on the high end for my area but for some here on the forum it would be too low. I don't see an increase in my pay anytime soon though because my area just can't afford it.

As for not giving receipts, no way!! Either pay my fee or find another daycare.

[playfelt]

What I do for rate increases is only raise them for incoming families so at any given time I can have up to three rates in care. The idea is that when a family signs on with me, if nothing else changes in terms of the care needed, their rate doesn't change either as long as they stay in care. With turnovers now it works even better. It for sure eliminates the worry about a current family not resigning a contract due to the increase.

[5 Little Monkeys]

Playfelt, do your parents ever question or even know that they are paying different fee's? I have had quite a few parents in my dc where they know each other outside of dc so I would worry about that lol.

Right now all my parents pay the same except for one family that was grandfathered in under the old rules. I had a complete change in families so I took that time to change my hours and I no longer offer part time pay and my new parents know this.

[playfelt]

I actually tell them at the interview. I do it as a drawing card because what I tell them is barring an emergency like property taxes double for everyone in the city or whatever that whatever rate they start at is the rate they will stay at as long as they stay with me. It gives them security right from day one and they like knowing that my rates won't suddenly jump on them mid year after they have set their budget. I then go on to tell them it means of course that at any given time I have parents paying a lower rate but that as new families join the daycare the rate goes up to the current market value while others continue to enjoy their lower fee and they will have that privilege too. I have never had anyone upset about it because they realize it is in their best interest since they will benefit down the road too. I usually raise my rate anywhere from $2-5 a day depending as I say on market rates. It works better for me than making all parents pay me a dollar more every year since I have a turnover due to only taking young kids.

By the way if you pull your child during mat leave the rules change.

[5 Little Monkeys]

That makes sense and as long as they stay with you until their child goes to school than like you said they will eventually be the ones enjoying the lower rate.

Here, a child typically starts at around a year and goes to preschool a few days a week at age 4 if the parent wants and starts kindergarten at age 5 so as long as a family stays with the same dcp, we will have children in our care for 3-4 years so not a huge turnover.

[cfred]

When I moved from my rural location to a heavily populated area I looked at what everyone else charged. While I came in a bit lower to fill up, I've since raised my rates $5/day higher than all the others. One provider said everyone had been at $40 for years. I just threw the number out there to see what happened. So far, no problem. I still got lots of responses, interviews and signed someone for my remaining spot with little effort....and that number goes up by $1 every September. It might not hurt to see what the market can bear in your area. I've seen a few providers following suit, which is nice to see :)

[apples and bananas]

I am exactly like Playfelt. I freeze rates for current clients. Their rates last no more then 3 years since then the child will be in school. Then they are set to the current b/a school rates.

As soon as a client goes on mat leave, their rates go to the current mat leave rates and if they come back full time they go up to the current daycare rates at that time.

All of my clients know this and appreciate that I'm not raising their rates unless their situation changes. It's a bit of a pain from an accounting and tracking point of view, but it's what works best in the long run for the daycare.

[treeholm]

I had one parent who told me she wouldn't need a receipt, and I told her that was up to her. I was legally required to provide it, and if she chose not to use it, that was fine. I think she got the message pretty quickly that there would be no rate reduction since I issue receipts for everyone, whether they need them or not.

[sandylynn]

Thanks so much for all the replies....bottom line....deciding how much I am undercharging myself....what is the going rate? Thanks for any input....Also ....when claiming all monies, how much should one put aside for taxes, (Canada pension etc.)Then we take how much we end up after paying all the taxes and divide it by the 10 hours the person uses and ya....one makes about 2.50 an hr....SERIOUSLY

[sandylynn]

Thanks for your reply gravy_train....just having a difficult time trying to figure out what the going rate is...I see everything from 35.00 to 70.00 a day!

[sandylynn]

OK, one more question and then I will SHUT UP! LOL....Do home daycare rates vary by location....rates in my area seem to be on the lower end...while the homes in my area sell on the higher end (650,000)????

[5 Little Monkeys]

I make $3 per hour PER child...so technically $12/hour. One parent is not responsible for paying my whole hourly wage, they are responsible for paying 1/4 of my hourly wage. If you are allowed 5 than they should be paying 1/5 of your hourly wage and so on. Figure out what number will work for you...it needs to pay your bills, allow some extra money and be a number that parents can afford to pay as well.

Daycare rates vary greatly between provinces and they even vary between cities/areas. I charge $30 a day but in a small community only 30 minutes from me, a friend charges between $20-25.

It will all depend on your expenses how much you will owe at income tax time. We own our home so have no mortgage which is great year round....than income tax time comes along and I usually don't have enough expenses to claim to get my numbers down. I expect to pay around $2400 so I put away around $300 a month. Once you have a full year of daycare and do your taxes you will have a better idea of what your numbers will look like year to year.

Last year I wasn't as strict as separating my daycare bills...if I was at the grocery store and only needed milk for dc I paid for it on our grocery bill. This year I have separated them even if it's only a $5 receipt. I buy a lot of toys second hand online and now keep a record of all that and get receipts.

[playfelt]

A good way to get a feel for rates in your area is to go to the home page of daycare bear and put your own postal code in the search box. It will bring up a list of daycares starting with the ones closest to you. When you read through their ads you will be able to also see their open hours and read a bit about their daycare and some have pictures. That will help you price yourself so you are competitive with your area.

The price varies a lot and sometimes by just a street away depending on things like demand, traffic patterns, schools served, etc.