Is It Worth Working After Daycare Costs?
Your second income, after daycare, taxes, and getting to work. Monthly, in your pocket.
By Jessica Winkler · Published by Digital Simplicity LLC · Last updated September 2, 2026
Method
How this is calculated
Three things come out of the second salary by default: federal income tax at your household's top bracket, FICA at 7.65%, and childcare. The bands cover federal and FICA only. If you pay state income tax, add it with Set exact rate.
The tax piece is the part worth explaining, because it's where most versions of this calculation go wrong. A second income does not get its own fresh set of tax brackets. It stacks on top of the household's existing income and gets taxed starting at whatever bracket that income already reached. So the rate that matters is your marginal rate, not the average rate across your whole return.
Childcare uses your actual quoted rate, per child. The calculator does not estimate it from your ZIP code, because quotes inside one metro vary more than the metro average is worth. Get the number from the center you'd actually use.
Commuting is days in the office times round-trip miles times $0.60 a mile, one rate that covers gas, wear, and maintenance together, in the spirit of the IRS standard mileage rate. Parking is priced separately, under Other work costs.
The salary field is your pay at the hours you work now. Weighing different hours prorates that pay by the ratio between current and proposed, so a 20-to-40-hour jump doubles it. Childcare does not scale the same way — a shorter week rarely costs proportionally less. Enter what it costs. Benefits thresholds below use proposed hours and weeks worked per year.
Sources
- Federal brackets and standard deduction: IRS Revenue Procedure 2025-32, tax year 2026
- FICA rate and wage base: Social Security Administration, 2026 COLA Fact Sheet
- Childcare cost context (not used in the math, used in the copy below): Care.com 2026 Cost of Care Report and Child Care Aware of America
The arithmetic
What "just working to pay for daycare" actually looks like
The phrase gets used loosely. Here's the arithmetic it usually describes.
A $52,000 second salary sounds like $52,000. In a household already in the 22% bracket, federal tax and FICA take roughly 29.65% of it before state tax, leaving about $3,050 a month. Two children in full-time care at $1,500 each is $3,000.
Net: $50 a month.
That family is not "losing money by working." They're also not gaining anything this month, which is a different and more frustrating position than either. The number sits near zero and the decision has to be made on everything the number can't hold.
The shape of it changes fast, and mostly in one direction: the second child is what breaks it. One full-time slot against a mid-five-figure salary usually clears. Two slots against the same salary usually doesn't, because the salary didn't double.
The share
How much of a paycheck daycare usually takes
The federal benchmark for affordable childcare is 7% of household income. Actual spending runs far above it — Care.com's 2026 Cost of Care report puts the average parent at 20% or more of household income, nearly three times the benchmark.
Measured against the second income alone rather than the household total, the share is much larger, which is why the "am I working for free" version of this question keeps coming up. It's the same dollars described from a different starting point. Both framings are honest. This calculator uses the second-income framing, because that's the paycheck the decision is actually about.
Care costs also fall off a cliff, once, when the youngest child starts kindergarten. A result that reads negative today may read differently in eighteen months. The calculator shows one month, not a trajectory.
The differentiator
Why a second income is taxed more than you expect
A second income is taxed from the first dollar at the household's top bracket.
Run the same $52,000 with an effective rate of 12% instead of a 22% marginal rate and the monthly take-home comes out around $3,480 rather than $3,050. That's a $430 monthly gap, produced entirely by using the wrong rate, and it always errs in the optimistic direction. On a decision this size, optimistic is the expensive way to be wrong.
FICA has no bracket at all. It applies at 7.65% from the first dollar earned, regardless of household income, up to the Social Security wage base.
This is the correction that took the longest to get right on this page. The first version shipped with an effective rate and produced numbers that were too kind.
If it goes negative
If the number is negative
A negative result is real and it's common during the childcare years.
It also isn't the whole picture. This calculation doesn't count employer health coverage, retirement contributions and employer match, or what several years out of the workforce costs in lifetime earnings — that last one is usually the largest number in the entire decision and it doesn't appear here at all.
The other thing worth saying: the answer is often neither "keep working full-time" nor "quit." A shared nanny, part-time care, family help, offset schedules with a partner, or one parent stepping back partway are all real structures that families land on, and most of them only become visible after you've seen the numbers on the two obvious options. This tool won't tell you which one fits. It will tell you what you're choosing between.
A nanny is one of those structures, and whether it's actually cheaper than daycare depends entirely on how many children you have.
And the part that doesn't fit anywhere in the math: childcare is prohibitively expensive, most families get no meaningful help with it, and it will be the largest line in your budget for years. It's also a season, and it ends. If you aren't spending money on your kids, it's worth asking what the money was for.
Limits
What this calculator doesn't include
- Dependent Care FSA. Up to $7,500 pre-tax through an employer for 2026, raised from $5,000 by the One Big Beautiful Bill Act. It meaningfully changes the result for households that have access to one. Not modeled.
- Child and Dependent Care Credit. A percentage of qualifying expenses, capped at $6,000 for two or more children. Not modeled.
- State childcare subsidies and CCDF eligibility. Thresholds vary by state and most working households don't qualify, but some do.
- Employer benefits. Health coverage, retirement match, disability, and paid leave all attach to the job and none of them appear in a monthly net.
- Career effects. Wage growth, promotion timing, and the re-entry penalty after a break. This is the thirty-year version of the question, and it's a separate tool.
- Tolls. Commute cost is a flat $0.60-a-mile rate for gas, wear, and maintenance. It doesn't add tolls on top, and parking is priced separately under Other work costs, not folded into commute.
- Time. No dollar figure is attached to hours, and one isn't attempted.
Questions
Frequently asked questions
Is it worth working just to pay for daycare?
Sometimes, and the math is usually closer than it feels. A second income that nets $50 a month still carries health coverage, retirement match, and continuous employment history. The monthly number is the smallest piece of the decision. Stepping out for five years costs lost wages, lost wage growth on everything after, and years of missed retirement compounding, and none of that shows up in a monthly comparison. Care costs also drop sharply when the youngest starts school, so a negative result now is not a permanent one.
How much should daycare cost compared to your salary?
The federal affordability benchmark is 7% of household income. Actual spending averages 20% or more, which means most families paying market rate are paying nearly three times the benchmark. Measured against a second income by itself rather than household income, the percentage is far higher again. Neither number is a rule about what you should pay. They're useful mainly for knowing whether your quote is normal for the market or high for it.
Why does my second income get taxed so much?
Because it stacks on the first one and is taxed from the first dollar at the household's top bracket: 22% federal for many two-earner households, plus 7.65% FICA. It gets taxed starting at whatever bracket the household already reached, and there is no separate set of brackets for the second earner. Any calculator using an average or effective tax rate will overstate what you keep, usually by a few hundred dollars a month.
Is daycare more expensive than a mortgage?
For many families with two children in full-time care, yes. Two full-time slots commonly run $2,500 to $3,500 a month depending on the market, which exceeds a large share of mortgage payments. The comparison holds even in expensive housing markets, because childcare prices track staffing ratios and local wages rather than housing. High housing costs don't make childcare relatively cheaper. They stack.
Should I go part time instead of quitting?
Often yes — part-time work nets better than either full-time or quitting, because childcare hours drop faster than income does. Two days of care against three days of pay is a different equation entirely. The trade-offs are benefits eligibility, which usually has an hours threshold, and promotion trajectory. This calculator models full-time only. Running it with reduced income and reduced care cost approximates a part-time scenario, though it won't catch a loss of employer health coverage.
Can you work from home instead of paying for daycare?
No, not for a full-time job. A 40-hour role with a scheduled meeting calendar requires someone else to have the kids during working hours. This is a common and expensive assumption, and it's costly in both directions — families who plan around it end up scrambling for care they didn't budget for, and employers who assume it end up with people trying to do two jobs at once. Remote work removes the commute. It doesn't remove the childcare.
What percentage of income should go to childcare?
The federal guideline is 7% of household income, set by the Department of Health and Human Services. Almost nobody paying market rate hits it. Treat it as a policy benchmark rather than a budget rule. It describes what childcare would cost in a system that subsidized it, not what your options cost this year.
Do you have to pay for daycare before your first day back at work?
Usually yes — most centers bill from the date they hold your spot, not the day your child actually starts care. If you accept a spot months ahead of returning to work, you can owe tuition before a single paycheck from the new job arrives. That's a cash-flow question, not a monthly-net one, and this calculator only answers the second. Ask any center directly what their hold policy costs before you accept a spot.
Related
The thirty-year version of this question
This page answers the month. The Stay-at-Home Parent Cost Calculator answers the career: lost wages, lost wage growth, and lost retirement compounding, net of the childcare you wouldn't pay.
Nanny vs. Daycare Calculator — the number of children where a nanny becomes the cheaper structure than daycare, at your own rates, payroll taxes included.