How to Set Your Childminding Fees: A Guide to Pricing, Deposits, and Late Payment Policies

Setting your fees as a childminder is one of those things nobody really prepares you for. You complete your training, sort your insurance, get registered with Ofsted, write your policies, and then someone asks "so what do you charge?" and you sort of panic. Do you look up what others charge? Do you pick a number and hope? Do you undercut the nursery down the road to get more enquiries?

I've been childminding for over a decade now, and to be honest, I got my pricing wrong for the first couple of years. I charged too little, didn't have a proper deposit system, and spent far too long chasing late payments. This post is everything I wish someone had told me before I started.

Working Out What to Charge Per Hour

The most common mistake new childminders make is looking at what the local nursery charges and going slightly lower. It seems logical, but it's actually a flawed comparison. Nurseries have overheads you don't (rent, multiple staff, utilities on commercial premises), but they also have economies of scale you don't. You are a sole trader running a small, highly personalised service from your home. That's a different product entirely.

Start with your costs. Work out what it actually costs you to run your setting each month: your Ofsted registration, insurance, public liability, continuous professional development, resources and toys, any assistants or cover you pay for, food and consumables, and a proportion of your household bills. The HMRC flat rate for using a room in your home for business is an option, or you can calculate the actual proportion. If you're unsure what you can legitimately count as a business expense, the guide to childminder tax returns covers this in detail.

Once you know your monthly costs, work backwards. If you have four full-time children at, say, 40 hours per week each, that's 160 billable hours a month. Divide your costs by that number and you get your break-even hourly rate. Everything above that is your income. Don't set your rate at break-even. You are a professional with qualifications and experience, and you should be paid accordingly.

Check local rates, but don't be led by them entirely. If childminders in your area are charging £5.50 an hour and you're charging £6.50, that £1 difference is negligible for most families over the course of the week. What matters more is whether you can justify the rate, which you can if your setting is good and you communicate its value clearly.

One more thing: don't forget to account for school holidays. If you're mindful of your numbers, most childminders who work term-time only will charge slightly more per hour than year-round providers, to compensate for the weeks they're not earning. Alternatively, spread the annual cost across 12 months. Either works, but be explicit about which model you're using.

What Your Fees Should (and Shouldn't) Cover

Your headline hourly rate isn't the whole picture. You also need a clear position on meals, nappies, outings, and settling-in sessions.

I include meals and snacks in my rate, because I find it simpler for everyone. Other childminders charge separately. Neither is wrong. What matters is that it's documented clearly so there are no surprises. The same goes for nappies: some charge parents to provide them, others buy in bulk and include the cost. I've tried both, and honestly, including nappies in the rate (with the cost baked in) makes drop-offs less complicated. Nobody needs to check who's running low on size 4s.

Outings deserve their own line. Regular local trips (parks, playgroups, library sessions) should be included. Bigger trips (farm parks, soft play with an entry fee) can be charged at cost, but you need to say this clearly upfront. I've seen disputes about this that could easily have been avoided by a single sentence in the contract.

Settling-in sessions are often done free of charge, and I understand why: it's a goodwill gesture. But if you're doing multiple extended settling-in visits over two or three weeks, that's real time. One free hour is reasonable. Beyond that, charge at your normal rate. Parents who genuinely want their child to settle well won't begrudge it, and your time has value.

Funded hours are worth addressing separately. If you accept the 15 or 30 hours government-funded entitlement, make sure you understand exactly what the funding covers and what you can charge as an "additional" or "optional" charge. Guidance from your local authority will tell you what's permissible. Some childminders decide not to accept funded hours at all, which is entirely their right, though it does limit your market slightly.

Deposits and Retainer Fees

A deposit is the single most effective way to protect yourself from last-minute cancellations and time-wasters. I charge a deposit equivalent to two weeks' fees when a place is confirmed. This is non-refundable if the family pulls out within a certain notice period (I use eight weeks, though many childminders use four).

The deposit should be documented in your contract, along with exactly what happens to it. Does it count toward the first invoice? Is it held as a bond against final outstanding payments? I apply mine to the last month's fees, which means I'm always one month ahead on security. If a family leaves without working their notice, that deposit partially cushions the gap.

Retainer fees are slightly different. If a parent needs a place held for several months before their child starts (common with babies, where placements are often agreed many months in advance), it's reasonable to charge a monthly retainer to secure that space. I charge around 50% of the full weekly fee during the holding period. Parents sometimes push back on this, but the alternative is that you hold the space, turn away other enquiries, and then the family changes their mind. It happens. Charging a retainer is normal, professional, and included in most standard childminding policies packs.

Be transparent about all of this during the initial enquiry. I cover it at the show-around stage, before anyone signs anything. Some families are surprised, but in my experience, the ones who are genuinely committed to the placement don't mind. The ones who baulk at a deposit are often the ones you'd have a difficult time with later.

Late Payment: Having a Policy That You Actually Use

Late payment is genuinely one of the most stressful parts of running a childminding business. You're not a bank. You shouldn't be subsidising families' cash flow. And yet most childminders I know have, at some point, been owed hundreds of pounds and felt awkward chasing it because they'd built a relationship with the family.

The fix is to have a written policy and stick to it consistently. My terms state that payment is due by the first of each month. If it's not received within five working days, I send a reminder. If it hits ten days overdue, a late fee applies: I charge £10 per week until it's settled. This is clearly stated in the contract that every parent signs before their child starts.

Does this feel harsh? I don't think so. You wouldn't let your mortgage lender slide for two weeks without consequence. A childminder's income is exactly the same.

I'd also strongly recommend invoicing properly rather than relying on verbal agreements or informal reminders. Send a written invoice on the same date each month. Most childminders I know use a simple spreadsheet or something like Xero or QuickBooks. A proper invoice, with your business name, the period it covers, the amount due, and the due date, looks professional and makes it much harder for parents to claim they "forgot" or "didn't know" what they owed.

If payments are persistently late, have the conversation directly. I've had to do this twice in ten years. One family genuinely had a short-term financial difficulty and we agreed a temporary arrangement, which they honoured. The other kept making excuses, and I gave notice once the pattern became clear. It's unpleasant, but being owed several months' fees is worse. If you find yourself dreading that conversation, the post on having difficult conversations with parents might help you prepare for it.

One thing worth knowing: if you're a member of PACEY or NDNA, both offer template contracts that include payment terms, late fees, and notice periods. They're a good starting point, though I'd always personalise any template to reflect your own setup.

A Note on Increasing Your Fees

Most childminders raise fees annually, usually at the start of the new year or each September. Give parents at least four to six weeks' notice in writing (I do eight weeks). Keep the explanation brief and professional: rising costs, cost of living, annual review. You don't need to justify it beyond that. I usually round to a clean 50p increase per hour, which keeps the maths simple for everyone.

Some childminders avoid raising fees because they're worried about losing families. I understand the anxiety, but in practice, a 50p per hour increase on, say, 30 hours per week is £15 a week. Most families accept this without complaint, particularly if you've given good notice and built a strong relationship. If a family leaves over a small annual increase, it's worth asking whether they valued the service accordingly in the first place.

Lock increases into your contract from the start: something along the lines of "fees are reviewed annually and may be increased with a minimum of six weeks' written notice." That way it's expected, not a surprise.

Sick Days, Bank Holidays, and Holiday Pay

These need to be in your contract too. Do you charge when the child is sick? Most childminders do, because your space is still held. Do you charge for bank holidays? Some do, some don't. Do you charge for your own holiday, and if so, how many weeks per year? These are all legitimate questions with no single right answer, but whatever you decide, it needs to be written down before anyone signs up.

I charge full fees when a child is absent due to illness, but I don't charge for bank holidays. I take four weeks' holiday per year and give eight weeks' notice. During my holidays I don't charge. These are my terms; they work for my setting and my families. Yours might look different.

The practical takeaway here is this: get everything written down, ideally before a child starts. A proper contract, signed by both parties, protects you and the family. It removes ambiguity, reduces conflict, and means you can refer back to something concrete rather than relying on what you think was agreed in a kitchen conversation eighteen months ago.

Your time and expertise are worth paying for properly. Pricing yourself fairly isn't greedy; it's what allows you to stay in business and keep doing what you're good at.