How Much Does it Cost to Provide Childcare Benefits to Employees?

Let’s say you’ve been tasked with creating benefits packages for your workforce. Although the cost of offering childcare benefits may seem daunting, it can be surprisingly affordable. Did you know for as low as $0.73 per employee per month, organizations can start including this benefit to employees? (And if done right, adding childcare benefits can lure new candidates and help retain existing employees.)

When considering new employee benefits, cost doesn’t have to be everything — but it is an important benchmark to determine the feasibility of potential programs. Employee childcare benefits have evolved beyond traditional, expensive, exclusively on-site options.

Costs depend on several factors, including the number of employees you have and the type of childcare benefits you opt to provide your working families. We’ll break this all down so you have a much clearer picture of what goes into calculating the costs of childcare benefits for employees.

Drop us a line here at Upwards to chat about childcare benefits pricing or any other questions about our programs.

Are employee childcare benefits attainable?

One of the big-picture questions you may ask is, “Are childcare benefits a possibility for our company?” The short answer is yes, probably so.

Whether your organization is a small business, medium-sized company or a large enterprise, childcare benefits for employees are likely on your radar as a means to support working families — and address multiple operational challenges. Everything from absenteeism, employee retention, presenteeism, and competitive hiring can be improved by incorporating the right childcare benefits program.

With a larger workforce, it is more efficient to scale benefits programs. The costs for any employer-sponsored childcare benefits will naturally be lower per employee per month. Even for more compact organizations, however, it can still be quite economical to begin supporting a small to mid-sized workforce with a childcare assistance program, for example.

Types of childcare benefits for employees

In addition to the number of employees you have, the type of childcare benefits you choose has a significant impact on the costs of the program.

There are many different ways to provide childcare benefits for employees, from monthly stipends to backup childcare. Here are a few to consider, and what ramifications each has on the cost of employer childcare benefits:

  • Onsite childcare centers: Typically found in or adjacent to the building where employees work, onsite centers are large childcare facilities intended to serve as convenient drop-off and pick-up sites for working families with young children. In practice, they are one of the most expensive methods to offer childcare benefits. Additionally, they are often not as convenient as they seem at first sight. Large class sizes, long waitlists, and limited hours (generally 8 a.m. - 5 p.m., give or take) can be some potential drawbacks of the onsite childcare center model. Onsite centers generally don’t cater to working families with school-aged children and any hybrid or remote employees aren’t supported when employers go this route for childcare benefits.
  • Backup childcare: Even if an employee has their regular childcare situation figured out with a workable and affordable solution in place, there will be times when that arrangement falls through. When something comes up at the last minute, having backup childcare is invaluable. Sometimes called emergency childcare, backup care provides a crucial safety net for working families when the unexpected strikes. As their employer, you can allot a specific number of backup care credits to utilize per month or per year. If and when any last-minute childcare needs arise, parents can utilize backup care support to find a childcare match so they can still work as planned. Backup care is seen as a cost-effective and increasingly sought-after form of employer-sponsored childcare benefits. The cost of backup childcare depends on a couple of factors:
    • How many days of backup care are you covering?
    • Is there a copay employees need to cover each time backup care is used? If so, how much is it?
  • Childcare stipends: A childcare stipend is an excellent way to support your employees when affording childcare is of paramount concern for your working families. Setting up childcare stipends at your organization is a straightforward process, with the first step being to determine the amount you’d like to contribute to cover each family’s childcare needs. This dollar amount can be per month or per year, whichever works best for you and your employees. Your working parents can apply their childcare stipends directly to childcare costs, or use them as a reimbursement once care has been provided. The cost of a stipend program can be substantial and varies depending on how much of the care costs you are trying to subsidize for employees:
    • Full cost of care: This is an expensive but extremely effective way to address your employees’ childcare needs in a comprehensive way.
    • Partial cost of care: The amount of the stipend per employee can be customized and still may represent a substantial investment to offset a portion of your working families’ childcare costs.
  • Range of different care and caregivers offered: The type of care you choose will also impact the overall cost of your childcare benefits program. Whether it covers babysitters, nannies, daycare, preschools, tutors, and/or summer camps, the right program for your workforce should provide flexible, affordable childcare coverage for those working families who need it the most.

For many employers, supporting working families with employee childcare benefits can be quite economical, starting as low as $0.78 per employee per month.

Choosing a childcare network for your organization

As you contemplate all your employee childcare benefits options, you will make many notable decisions along the way. None will be quite as important and impactful as which childcare network you choose for your organization.

All childcare networks aim to deliver a similar service, yet costs and coverage vary based on who you select to provide your employer-sponsored childcare benefits. Understanding the specific needs of your working families goes a long way to inform your choice of the best childcare network fit for your organization.

Determining how much it costs to provide employee childcare benefits is dependent on everything from the type of childcare benefit you choose to the number of employees you have and the childcare network you partner with. Upwards has worked with thousands of employers to help them assess their workforce and make the most informed decisions to support their working families with a childcare benefits program.

Want to learn about Upwards' Childcare Benefits?
Childcare AssistanceBackup CareChildcare Stipends
Dedicated care manager to provide 24/7 concierge supportEmergency childcare when regular care falls throughOffset the cost of childcare-related expenses for employees

Upwards is the largest childcare network in America, with flexible and affordable employee childcare benefits that will make a difference in your bottom line.

When you look at the big picture, adding childcare benefits for employees is definitely possible. Will you make it a reality for your working families?

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The largest childcare network in the United States, providing access to quality, affordable childcare to families nationwide. We support childcare providers in operating sustainable businesses through a technology-based marketplace and partner with government entities to improve access to care. Upwards also helps employers of all sizes offer their employees childcare benefits. Our mission is to help all families care for their children — not just those who can afford it.

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