Care for 250 days at $22 a day adds up to $5,500 a year. A parent earning $75,000 who claims the child care expense deduction saves about $1,781 in tax. That leaves $3,719 after tax, or $310 a month. At a $10 a day fee, the year would cost $2,500.
Ontario’s fee cap
Ontario and Canada set out to lower fees for children under six in licensed programs. Since January 1, 2025, reduced fees at enrolled providers are capped at $22 a day, with a stated goal of $10 a day on average. What your centre actually charges may be lower or higher.
Who qualifies for reduced fees
Two conditions apply. Your licensed provider must be enrolled in the Canada-wide system and charge more than $12 a day. Your child must be under six, or just turned six and be in a preschool program. Ask your centre if it’s enrolled.
The child care expense deduction
Child care costs come off your income, up to $8,000 for each child under seven at year end and $5,000 for a child aged seven to sixteen. For a child eligible for the disability tax credit, the limit is $11,000. It lowers your tax. It does not lower the fee.
Who claims it
Usually the parent with the lower income, which is what the calculator’s field asks for. A deduction is worth more at a higher marginal rate, but the rule gives it to the lower earner unless an exception applies.
Costs the deduction covers
Daycare fees, nursery school, day camps and before and after school care can count. Meals, medical care, tuition for regular school and transportation cannot. Keep receipts showing the provider’s name and social insurance number.
Reading the result
The large figure is your yearly cost after the tax saving. Beneath it sit the fees, the deduction limit, the amount deducted and the saving. The final rows show the cost at $22 and at $10 a day, which makes the effect of the cap easy to see.
An example for two children
Two children under 7 at $22 a day for 250 days come to $11,000 in fees. The deduction limit is $16,000, so the full $11,000 can be claimed. For a parent earning $75,000, that saves about $3,400 in tax. Change the number of children and the fee to test your case.
Applying for a space
Toronto has waiting lists, and some centres take months to place a child. Register early and ask each centre if it’s enrolled in the fee program. Hold on to your receipts too, since the tax return asks for the provider’s name and social insurance number.
Other family supports
Lower income families may also get a child care fee subsidy through the City of Toronto, paid under Ontario’s program. Rules depend on income and your situation, so ask Toronto Children’s Services if you might qualify. A subsidy works together with the reduced fee and the tax deduction.
Where to go next
Child benefits and other credits help families as well. The Canada Child Benefit calculator shows what you may receive, and the maternity and parental benefits calculator helps you plan leave. For more deductions, see the tax deductions and credits calculator, then fit the cost into the monthly budget calculator.
Frequently asked questions
What is the Ontario child care fee cap?
$22 a day for reduced fees at enrolled providers since January 1, 2025.
What is the child care deduction limit?
$8,000 under 7, $5,000 age 7 to 16 and $11,000 with the disability tax credit.
Who claims child care expenses?
Usually the parent with the lower income.
Which children qualify for reduced fees?
Children under six in enrolled licensed programs.
Are school fees deductible?
No, regular school tuition is not.
What is the $10 a day goal?
The federal target for an average fee.
Sources and updates
Last reviewed: . Full disclaimer. How we build calculators. Editorial policy.
Estimate only. This calculator gives general information for planning. It is not tax, legal or financial advice, and it is not affiliated with the City of Toronto, MPAC or the Canada Revenue Agency. Results depend on the numbers you enter and may differ from official amounts. Check official sources or a qualified professional before you decide.