What this calculator does
This calculator estimates the yearly cost of childcare in New York City by type of care and number of children, then shows how much a dependent care FSA can save. Full-time infant care in New York City is among the most expensive in the country. The city's free 3-K and Pre-K for All programs cover many three- and four-year-olds, which can change a family's budget sharply once a child ages in. Families can check provider licensing through the NYC Health Department and the NYS Office of Children and Family Services.
How to use it
- Choose center-based care by age, a family child care home or a nanny.
- Enter the number of children and the schedule.
- Enter household income and filing status for the tax saving.
- Tick the FSA box if your employer offers one.
The formula
Center or family care = New York City starting price × (days ÷ 5) × (weeks ÷ 50), with a 10% sibling discount for each additional child. Nanny = hourly rate × hours × weeks × 1.0765 (employer payroll taxes). FSA saving = the lower of $7,500 or the cost × your combined marginal tax rate.
Starting estimates used for New York City: infant center $30,000, toddler $26,000, preschool $22,000, family child care $19,000 per year, nanny $27 an hour. These are Rate and Reason estimates, not official figures.
Worked example for New York City
| Item | Amount |
|---|---|
| Care type | infant |
| Children | 1 |
| Starting price per child (New York City estimate) | $30,000 |
| Yearly cost | $30,000 |
| Dependent care FSA (up to $7,500) x your marginal rate 41.4% | -$3,107 |
| Net yearly cost | $26,893 |
What affects childcare costs in New York City
Staff-to-child ratios set by the state are the main reason infant care costs more than preschool. Rent dominates the NYC budget, but the city also has high grocery and service prices. On the other hand, many residents live without a car, which removes one of the largest costs in other cities.
Common mistakes and tips
- Joining waitlists late — many centers have long waits for infant rooms.
- Missing the FSA enrollment window, which is usually open enrollment or a qualifying life event.
- Forgetting nanny payroll obligations, including Schedule H and state unemployment tax.
- Not checking free public pre-K or subsidy eligibility, which can remove a large cost.
Frequently asked questions
How much does daycare cost in New York City?
This estimate for full-time infant care is $30,000 a year. Prices vary widely by neighborhood and provider.
What is the dependent care FSA limit for 2026?
$7,500 per household, up from $5,000, under the 2025 federal tax law.
Can I use the FSA and the child care tax credit together?
Not on the same dollars. Expenses paid with FSA money cannot also be claimed for the credit.
Is there free pre-K in New York City?
Yes. Pre-K for All offers free full-day pre-K to every four-year-old in New York City, and 3-K offers free seats to many three-year-olds. Families apply through NYC Public Schools. Infant and toddler care is not free, which is why costs drop sharply once a child is old enough for 3-K.
Sources
Disclaimer
This calculator provides estimates for educational purposes only and is not financial, tax, legal, real estate, or insurance advice. Consult a licensed professional before making decisions.