Childcare cost calculator
Does a second income cover childcare? See what is left each month after marginal taxes, care and the costs of going to work.
Household income
Taxes on the second income are calculated on top of the first.
Childcare and work costs
Commuting, parking, work clothes, extra meals
Retirement and tax breaks
Percent of the second income
Matched dollar for dollar up to this percent of salary
Flat rate, use 0 for states with no income tax
Beyond the monthly number
Childcare is a cost for a few years. Most of what a second income buys lasts far longer.
- Retirement savings and match
- Contributions and employer match are not in the cash number, but they are real money. Thirty years of growth on a few thousand dollars a year is often worth more than the childcare it competes with.
- Social Security credits
- Your benefit is based on your highest 35 years of earnings. Years with no income count as zeros, so staying employed, even at a low net, raises the eventual benefit.
- Career progression
- Raises, promotions and skills build on each other. A gap of a few years can lower lifetime earnings by far more than the salary missed during the gap itself.
- Benefits like health insurance
- A second job can bring better or cheaper health coverage, life and disability insurance, and a second safety net if the other earner loses their job.
Frequently asked questions
- Why is the second income taxed at a higher rate than the first?
- When a couple files jointly, the first income already fills the lower brackets and the standard deduction. Every dollar of the second income lands on top, so it is taxed at the household's marginal rate from the first dollar. That is why this calculator computes tax on the second income as the difference between the household tax with and without it.
- What is a dependent care FSA and how much can we put in for 2026?
- A dependent care FSA lets you pay for childcare with money that skips federal income tax, Social Security, Medicare and usually state tax. The One Big Beautiful Bill Act raised the household limit from $5,000 to $7,500 starting in 2026. Any care you pay for through the FSA cannot also be claimed for the child and dependent care credit.
- How does the child and dependent care credit work?
- The credit covers a percentage of qualifying care expenses, up to $3,000 for one child or $6,000 for two or more. Most households earning above about $75,000 get 20%. Lower incomes qualify for a higher percentage, which this calculator simplifies to a flat 20%. The credit is non-refundable, so it cannot exceed the tax you owe.
- If the monthly number is negative, should the second earner stop working?
- Not necessarily. Childcare costs are temporary, usually heaviest for the first five years, while the career cost of stepping out can compound for decades. Retirement contributions, employer match, Social Security credits, health insurance and future raises all sit outside the monthly cash number. Treat a small loss as the price of staying in the workforce, and a large loss as a signal to look at cheaper care, part-time work or a different schedule.
- What does this calculator leave out?
- It uses a flat state tax rate, a 20% care credit and a single employer match rule. It does not model the child tax credit, local taxes, health insurance premiums, commuter benefits or the value of a second employer's benefits. Use it as a first pass, then adjust for your own situation.
Disclaimer
This calculator produces estimates for educational purposes only. It uses 2026 federal brackets and the standard deduction, a flat state rate, a simplified 20% child and dependent care credit, and ignores other credits, itemized deductions, local taxes and benefit costs. Actual results will vary.
Warren provides educational information, not individualized financial, tax or legal advice. Read our disclaimers.
Want a budget that works with childcare in it?
Warren AI can map your household income, care costs and savings goals, then show you what changes make the biggest difference.