Childcare in New York: the US$26,000 daycare bill, nanny tax and free 3-K

Under-threes are expensive in New York. From the September your child turns three, the city gives you a free seat if you apply on time.

The short version

• Centre-based care for infants and toddlers in NYC averaged about US$26,000 a year in 2024, and home-based family care about US$18,200 [3].
• Australia's Child Care Subsidy stops when you move overseas, and it never paid for care outside Australia anyway [6].
• 3-K (age three) and Pre-K for All (age four) are free for every family in the city, regardless of immigration status or income [1]. School-day seats run 6 hours 20 minutes for the 10-month school year [2].
• Applications open in January and close in late February through MySchools. For the 2026–27 year the deadline was 27 February 2026 [1].
• Hire a nanny and you're an employer. In 2026, paying US$3,000 or more in cash wages triggers Social Security and Medicare tax [4], and New York's domestic worker rules apply [5].

Why the bill comes as a shock

In Australia, the Child Care Subsidy takes a big bite out of daycare fees for most families, and many states now offer free or cheap preschool. None of that follows you. Services Australia says the subsidy stops when you depart if you move overseas [6]. It only ever applies to approved care in Australia.

In New York, you pay full freight until your child is old enough for 3-K. The NYC Comptroller's January 2025 report on child care affordability found [3]:

The Comptroller used the federal benchmark that childcare should cost no more than 7% of family income. On that measure, a toddler place at a centre would only be affordable for a family earning around US$334,000 a year [3]. That's the gap most Aussie families on a single E-3 salary find themselves in.

Manhattan prices typically sit above the citywide average, and waitlists at popular centres can be long. Many families put names down during pregnancy.

Your options for under-threes

There are also free or low-cost infant and toddler programmes, including Early Head Start, for families who qualify on income or other grounds. You can apply at any time through 311, MySchools or directly with the programmes [2]. Most Australians on professional visas won't meet the income tests, but it's worth checking if one parent isn't working.

A 2-K pilot

In February 2026 the city announced it would open an initial 2,000 "2-K" seats for two-year-olds in autumn 2026, with state funding, as a first step towards wider free childcare [1]. That's a small number for a city this size. Treat it as a bonus if you get one, not a plan.

3-K and Pre-K for All: free seats from age three

This is the big one. Every child in New York City can apply for a free 3-K seat the year they turn three, and a free Pre-K seat the year they turn four [1][2].

• 3-K is for children turning three in that calendar year. For 2026–27, that meant children born in 2023 [2].
• Pre-K is for children turning four. For 2026–27, children born in 2022 [2]. Every child who applies is guaranteed a Pre-K seat [2].
• Cost: free for all families, whatever your immigration status, income or language [1].
• Hours: school-day seats run 6 hours 20 minutes over the 10-month school year [2]. Extended day and year seats of up to 10 hours exist, but have extra eligibility rules and some charge a small fee [2].

The programmes run in four kinds of places [2]:

• District schools, inside public elementary schools.
• Pre-K centres run by the Department of Education, offering only 3-K and Pre-K.
• NYC Early Education Centres, run by community organisations.
• Charter schools, for Pre-K only, which usually admit by lottery and run their own applications.

How to apply

1. Watch for January. Applications for the following September open in mid-January. For 2026–27, they opened on 14 January 2026 [1].
2. Create a MySchools account at myschools.nyc. You can also apply by phone on 718-935-2009 or in person at a Family Welcome Centre [1].
3. Rank your programmes in true order of preference. Order matters, not when you apply. It isn't first come, first served [1].
4. Know the priorities. District schools generally favour current students, zoned children with siblings, then zoned children and others in the district. Community centres often prioritise siblings and families using their services [2].
5. Submit by the deadline, usually late February. Every family that applies on time gets an offer [1].
6. Accept and register after offers come out in May. You'll need one proof of age, such as a birth certificate or passport, and two proofs of address, such as a lease and a utility bill [2].
7. Check the waitlist over summer if you didn't get your first choice [2].

You don't need a Social Security number or proof of citizenship to register [2]. An Australian passport works as proof of age.

Arriving mid-year

If you land after the February deadline, you can still apply. Use the "Need a Seat Now?" option in MySchools and contact programmes directly about open seats [2]. Pre-K seats are guaranteed, 3-K seats depend on what's left near you.

The catch for working parents: a 6 hour 20 minute day ends mid-afternoon, and the school year has long breaks. Most families still need after-care, a sitter or a part-time nanny on top.

Hiring a nanny: you're the employer

At home, many families pay a nanny informally. In New York, a nanny who works in your home is usually your employee, and the tax and labour rules are real.

Federal tax

The IRS calls this household employment. In 2026, if you pay one household employee US$3,000 or more in cash wages, you generally withhold 6.2% for Social Security and 1.45% for Medicare, and pay a matching 7.65% yourself [4]. If you pay more than US$1,000 in any calendar quarter, federal unemployment tax applies too [4]. You file Schedule H with your tax return and give your nanny a W-2, which means getting an employer identification number [4].

New York State has its own employer registrations as well, including state unemployment insurance. Many families use a household payroll service to handle it all.

New York's Domestic Workers' Bill of Rights

New York gives nannies and other domestic workers specific protections [5]:

In practice, experienced New York nannies are paid well above the minimum wage, and families commonly guarantee hours and pay for holidays. Put it all in a written agreement.

The visa question

Your nanny must have the right to work in the US. And if you're the visa holder, check your partner's work rights before relying on them for care. E-3 spouses generally have US work rights, but confirm the current USCIS rules for your visa, because that changes the maths on whether one parent stays home.

Childcare and the move home

If you're planning to move back to Australia, the Child Care Subsidy needs a new claim once you return [6]. Get your child's name down at Australian centres early, because waitlists in Sydney and Melbourne are long too. Our guide to schooling Australian kids abroad and coming home covers the school side.

Trying to find a nanny share partner or comparing 3-K programmes in Park Slope? Join Cooee USA, our Facebook group for Australians in the USA. There are plenty of Aussie parents in New York who've done the MySchools dance.

Sources

1. Ahead of 27 February deadline, Mayor Mamdani urges families to apply for 3-K and Pre-K – NYC Mayor's Office, February 2026
2. Applying to 3-K and Pre-K 2026 – Advocates for Children of New York
3. Child care affordability and the benefits of universal provision – NYC Comptroller, January 2025
4. Topic no. 756, Employment taxes for household employees – IRS
5. Domestic workers' rights poster – New York State Department of Labor
6. Travel outside Australia rules for Child Care Subsidy – Services Australia

Keep reading

• Having a baby in New York: costs, cover and Paid Family Leave
• NYC public schools: zoned schools, G&T and the SHSAT
• Cost of living in New York vs Sydney and Melbourne
• Schooling Australian kids abroad and coming home