How To Accept Payments For A Daycare

A daycare bills tuition to parents on a weekly or monthly cycle, holds registration deposits, and often administers subsidy funding with its own rules. Enrolment is the business, so the payment setup exists to make tuition automatic and to handle the awkward conversations, late pickup, unpaid balances, withdrawal, without damaging a relationship built on trust with someone's child.

Updated July 28, 2026 · figures verified against the sources cited below.

How daycare money actually arrives

Four flows. Tuition: the recurring core, billed weekly, fortnightly, or monthly in advance rather than in arrears. Registration and deposit at enrolment, holding the place. Subsidy or assistance funding where families qualify, paid by a programme on its own timetable with its own documentation requirements. And extras: late pickup fees, extended hours, meals, field trips, and supply charges.

By the numbers (July 28, 2026)

Square's published 2026 US rate for this lane: 3.5% + 15¢ on a stored or keyed card. A $1,250 monthly tuition carries $43.90 in fees. The ACH route, 1% with a $10 ceiling, costs $10.00 and keeps $33.90. Charged automatically on a stored method before the care period rather than after it, which is what keeps a weekly payroll funded.

Tuition in advance, on autopay

Bill before the care period, not after. A daycare that invoices in arrears is extending credit to every family simultaneously while its own payroll runs weekly, and recovering an unpaid balance from a family that has already left is close to impossible. Set up autopay on a stored payment method at enrolment as part of the agreement, charged on a fixed date, with the schedule stated for the year. Families accept this readily when it is the enrolment process rather than a later request.

Late pickup and the fee that has to be enforced

Every centre has the same problem: a parent arriving twenty minutes late means staff paid overtime and a ratio to maintain, and the fee exists to prevent it rather than to punish. State it in the agreement with the amount and the increment, charge it automatically to the payment method on file, and apply it consistently. Centres that charge it inconsistently train families to gamble on which days it matters, which is worse for staff than either charging it always or never charging it at all.

Subsidy funding and the two-payer reality

Where families receive assistance, the centre often collects part from the programme and part from the family, and both parts need tracking separately. Programme funding follows its own authorisation, documentation, and payment timetable, and an expired authorisation means care already delivered may be unfunded. Track authorisation dates as carefully as attendance, tell families in advance when renewal is due, and never let care continue on an assumed authorisation, because retroactive subsidy gaps are among the hardest balances a centre will try to collect.

Withdrawal, balances, and the licensing layer

Write the policy before it is needed: notice period for withdrawal, what the deposit covers, what happens to a place held over a holiday, and how unpaid balances are handled. Apply it consistently and exercise discretion privately rather than as precedent. Childcare is a licensed setting, and requirements covering agreements, fee disclosure, deposits, and records vary by jurisdiction, so confirm what governs your centre specifically rather than adopting another centre's paperwork.

Sources

• NerdWallet — Square Fees: Calculator and Pricing for 2026
• Swipesum — Square Fees Explained 2026 (verified against Square's published pricing)

What people ask me

Should daycare tuition be billed in advance?

Yes. Billing in arrears extends credit to every family while payroll runs weekly, and recovering a balance from a family that has already left is close to impossible.

How should tuition be collected?

Autopay on a stored payment method arranged at enrolment as part of the agreement, charged on a fixed date with the schedule stated for the year.

How should late pickup fees work?

Stated in the agreement with amount and increment, charged automatically to the method on file, and applied consistently rather than selectively.

What about subsidy funding?

Track programme authorisation dates as carefully as attendance, warn families before renewal is due, and never let care continue on an assumed authorisation.

What policies should be written in advance?

Withdrawal notice, what the deposit covers, holiday place-holding, and unpaid balance handling, applied consistently with discretion exercised privately.

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