Average Yearly Expenses for a daycare with 5 kids

Hi,
I'm starting to do some research in starting my own daycare in approximately 6 mths. I go back to work next week, and both my husband and I are having a very tough time with putting our little girl into daycare, and I've always had a dream of starting my own daycare centre.

I've been crunching numbers and talking to the CRA lots this week about taxes and expenses etc.

Can anyone tell me what their average cost are to run their daycare for a year, (food, supplies etc) anything you would take off your Gross amount to reach the income you actually are going to tax yourself on?

Any help with average expenses would be appreciated. I am planning on having 5 kids, plus my little girl.

Thank you so much for your help, and enjoy the holiday season!

I would like to answer, but I don't think I have been doing this long enough (a year and a half).
Anyone with more experience want to chip in?

Another way to start is to look at what you will save by opening the daycare. Start with things like daycare you pay now, transportation to work (gas or bus ticket), 2/3 of what you pay for clothes and upkeep ex drycleaning - smart providers where wash and wear), cost of lunches or food you normally eat at work, cost of office extras like parties, birthdays, etc. cost of things you do because time is tight like ordering out for meals more often.

Then take the salary you make now and subtract the above total from it. That will give you an idea of the amount you need to earn doing daycare to maintain the same level of income as now.

For daycare income take the average rate in your area times 5 kids for a total and then divide in half. The one thing about the expense claims is that you will be claiming things that you would be paying anyways so the claim is a bonus. Only the food, consumables like craft supplies, paper towels, outings are things you will be losing from the income. The actual amount of electricity, water and heat will be more but not exponentially more.

I serve all organic so my costs are hight. BUT, when I was serving non-organic ( a number of years ago now) it was less. My estimate is that it costs about $10 per day, per child in expenses. BUT, you can write off A LOT because you are operating out of your home so you can write off mortgage interest, house insurance, utilities for every single square foot of your home you use for daycare hours. So, if you operate nine hours a day, five days a week, that means 45 hours of EVERY week you can write off every single foot of space you use for daycare. That's just over 25% of you entire costs of living in your home that you would have to pay for anyway.

Honestly, in all my years of providing daycare I have never paid more than just my CPP. Hire a GOOD accountant, save EVERY receipt, be really good at knowing what you CAN and can not claim as an expense. Build out a special space for your daycare and write that off over the years,

Hey.........what happened to the last half of my post?? Sorry, OP....looks like an internet gaffah. I will finish what I was saying in a bit when I have time.

This is all very helpful. Thank you so much for taking the time to give me some advice. I get so excited thinking about starting my own daycare. I just wish I didn't have to go back to work next week :( But it's important to us to redo our basement to make a special and fun space for daycare before I get started.

Keep your bills for the playroom. While you can't deduct the cost of the actual room itself you can deduct the furniture, toys, decorations, special things you put in there. Some will say you can deduct the wood and materials for the room but when you sell your home the playroom will be considered a capital asset and taxed so better to just build the room as part of an upgrade to your home and then claim what goes in the room. Also anything you already have like high chairs you will use in the business you can sell to the business and claim the equivalent of what it would have cost if you had bought the item used such as at a garage sale.

Hi Judy,

I like what you have shared so far. Very informative and I appreciate it as I am looking into starting my own daycare up in Prince George, BC. I know that there is loads for me to learn and I am open to anything that you have to share. I would have loved to been able to read the rest of your post.

What about when you are renting your home, what happens then with write offs and all?