How to compare childcare costs: daycare vs nanny vs nanny share vs au pair

The short version

Convert every option to a weekly cost for your family: daycare = rate per child × kids; nanny = hourly rate × hours; nanny share = share rate × hours; au pair = stipend + agency fee ÷ 52 + room & board value. Then run the per-child test — divide each flat total by your kid count. Daycare climbs with each child while flat options hold still, so the cheapest option at one kid is often not the cheapest at two or three.

Step 1: pin down your weekly hours

Everything downstream multiplies by this number, so get it right first. Count the hours a caregiver actually covers in a typical week — including the commute buffer, not just your shift. Full-time families usually land at 40–50 hours; part-time, count the exact days. If your hours vary week to week, use a four-week average. Au pairs cap at 45 hours a week and 10 a day under program rules, so if you need more than that, an au pair is off the table before the math even starts.

Step 2: collect quotes in the same unit

Get two or three quotes per option, in each option's native unit: daycare as dollars per child per week, nannies as dollars per hour, shares as dollars per hour at the share rate, au pairs as the weekly stipend plus the agency's yearly program fee. Ask daycares what is excluded — registration, activity, and supply fees routinely sit outside the quoted rate. Ask nanny candidates whether the quoted hourly is the whole story or whether they expect paid time off, holidays, and sick days on top (they usually do).

Step 3: turn every option into one weekly number

This is the step people skip, and it is the whole game:

• Daycare: weekly rate per child × number of kids.
• Nanny: hourly rate × weekly hours — flat across kids.
• Nanny share: share rate × weekly hours — flat across kids, and the share rate typically runs 25–35% under a full nanny.
• Au pair: weekly stipend + (agency fee ÷ 52) + weekly room & board value — flat. The agency fee is the line everyone forgets: at roughly $9,000–$11,000 a year, it is over $180 a week hiding inside the "cheap" option.

Now all four options speak the same language. Run them through the childcare cost calculator to see the four totals side by side with the family-size curves.

Step 4: run the per-child test

Take each flat-priced total and divide it by your kid count. That per-child figure is the number that decides the comparison:

• With 1 kid, divide by one — nothing changes, and daycare's per-child rate usually wins on price.
• With 2 kids, every flat option's per-child cost halves — and that is usually where the au pair or the share pulls ahead of daycare.
• With 3 kids, flat pricing divides by three and daycare rarely survives the comparison.

This is not a rounding trick; it is the actual structure of the prices. Daycare sells you one seat per child. A nanny, a share, or an au pair sells you the arrangement, and the arrangement does not get more expensive when a sibling shows up.

Step 5: annualize and add the hidden extras

Multiply the weekly winner by 52 for the yearly picture, then stress-test it with the costs that live outside the quotes:

• Nanny payroll taxes: a legally paid nanny carries household-employer payroll taxes of roughly 10–11% on top of wages — several thousand a year at full-time rates.
• Paid time off: nannies and au pairs get paid time off under contract or program rules; daycare charges whether your child attends or not. Over a year, unused-care weeks are worth a few hundred dollars of difference.
• Au pair extras: phone plan, car insurance, a higher education allowance — whatever you would add, add it to the stipend line.
• Daycare extras: registration, activities, supplies, and late-pickup fees.

Then check the tax side: whichever option you choose, the bill may qualify for the dependent care FSA or the childcare tax credit — compare those two tax breaks before you finalize anything.

Worked example: 2 kids, 45 hours a week