A clear daycare payment policy is the cheapest way to get paid on time. When families know the due date, the late fee and how to pay before their first day, most billing problems never start. This guide gives you a payment policy template you can copy, and shows how to set late fees, payment methods and autopay rules that parents accept.
The short version
- Put due dates, late fees, payment methods and what happens after non-payment in one written policy.
- Have every family sign it at enrollment, and apply it the same way to everyone.
- Use a short grace period, then one clear late fee. Check your state's licensing rules first.
- Autopay by bank (ACH) is the easiest way to stop late payments, and usually the cheapest to process.
- Let your childcare billing software send the invoices, reminders and late fees for you.
Start free, set up autopay in minutes →
What a daycare payment policy should cover
Your payment policy is part of your parent handbook. It should answer every money question a family might ask, so nobody can say they didn't know. Cover these points:
- Tuition and billing cycle: the rate for each program and whether you bill weekly, every two weeks or monthly.
- Due date: the exact day payment is due, for example every Monday for weekly billing or the 1st for monthly billing.
- Payment methods: bank transfer (ACH), card, check or cash, and which one you prefer.
- Processing fees: whether the center or the parent pays card and bank fees.
- Late fees: the grace period, the fee amount and when it applies.
- Returned payments: what happens when a bank payment or check bounces.
- Absences, holidays and closures: whether tuition is still due on days the child is absent or the center is closed.
- Deposits and registration fees: amounts and whether they are refundable.
- Subsidy and co-pay families: how the family share and the agency share are billed.
- Non-payment: how many days past due before care is paused or ended.
- Withdrawal notice: how much notice a family must give before leaving.
Free daycare payment policy template
Copy this template into your handbook and replace the words in brackets with your own rules.
[Center name] Payment Policy
Tuition. Tuition for each program is listed on the current rate sheet. Tuition is billed [weekly / monthly] in advance.
Due date. Payment is due by [day and time, for example Monday at 9:00 AM / the 1st of the month].
How to pay. Families pay through our parent app by automatic bank payment (ACH) or card. [Checks and cash are accepted at the front desk.]
Processing fees. [The center pays bank payment fees. Card payments include a processing fee paid by the family.]
Late fees. Payments not received within [2] business days of the due date are charged a late fee of [$25]. [An additional $5 is charged for each further day, up to $50.]
Returned payments. A returned bank payment or check is charged a fee of [$25], and the family must pay by [another method] for the next [2] billing periods.
Absences and closures. Tuition is due for scheduled days, including sick days, vacation days and the holidays listed in our calendar.
Subsidy families. Families receiving childcare assistance pay their co-pay on the same schedule. The agency share is billed to the agency.
Non-payment. If an account is [14] days past due, care may be paused until the balance is paid.
Withdrawal. Families must give [2 weeks'] written notice before withdrawing. Tuition is due for the notice period.
I have read and agree to this payment policy. Parent signature: ____________ Date: ________
How to set a late payment policy parents accept
A late fee works when it is clear, fair and applied to everyone the same way. Most centers use one of these models:
- Flat fee: one fee after the grace period. It is simple to explain and simple to enforce.
- Flat fee plus a daily fee: a starting fee, then a small amount each day the balance stays unpaid, with a cap.
- Percentage of the balance: a share of the unpaid amount, which scales with tuition.
Whatever you choose, add a short grace period so a bank delay doesn't trigger a fee, and send a reminder before the due date. Late-fee and surcharge rules can differ by state, so check your state's childcare licensing rules and consumer rules before you publish the policy.
For more ways to cut late payments, read how to reduce late and missed tuition payments.
Payment methods and who pays the fees
Every payment method has a cost. On tuition, these fees add up faster than most owners expect, especially with weekly billing, where each family makes about 4.33 payments a month.
$0.49 per ACH payment. A flat fee, whatever the amount: a $250 tuition payment and a $2,500 one cost the same. Card payments are 2.79%. Start free →
- Bank transfer (ACH): usually the lowest fee and the most reliable for autopay. With MyKidReports, each ACH payment costs a flat $0.49, whatever the amount.
- Card: convenient for parents but more expensive. With MyKidReports, card payments cost 2.79%.
- Check and cash: no processing fee, but more staff time and more late payments.
Decide whether the center absorbs these fees or passes them to families, and write it in the policy. Some states limit card surcharges, so check before you pass card fees on. To see what fees cost a center your size, try the daycare fee calculator.
Weekly or monthly billing?
Weekly billing matches how many families get paid and keeps balances small, so missed payments hurt less. Monthly billing means fewer invoices and fewer payment fees. Many centers bill infants and toddlers monthly and drop-in or part-time care weekly. Pick one cycle per program and say so in the policy.
Billing subsidy and co-pay families
For families with childcare assistance, bill the family share (the co-pay) to the parent and the agency share to the agency. Keep the two on separate lines so you can see what each side still owes. Your billing system should split each invoice for you, so subsidy families reconcile as cleanly as private-pay families.
How to roll out your payment policy
- Add the policy to your parent handbook and enrollment packet.
- Ask every family to sign it before their first day, including current families when you change it.
- Set up autopay at enrollment, so the first payment is already automatic.
- Send a reminder two or three days before each due date.
- Apply late fees the same way for every family, every time.
- Review the policy once a year and give families written notice of any change.
Put your payment policy on autopilot
Writing the policy is the easy part. Enforcing it every week takes time. MyKidReports childcare billing software sends recurring invoices, collects by autopay, adds your late fee after the grace period and splits subsidy and family shares, so your policy runs itself. It costs $0.99 per child a month and is free for up to 5 children.
Need an invoice format too? Use our free daycare invoice template.
Daycare payment policy questions
What should a daycare payment policy include?
Tuition rates, the billing cycle, the due date, accepted payment methods, who pays processing fees, the grace period and late fee, returned-payment fees, rules for absences and closures, subsidy co-pays, what happens after non-payment and how much notice a family must give before leaving.
How much should a daycare late fee be?
There is no single right amount. Many centers use a flat fee after a short grace period, sometimes with a small daily fee and a cap. Check your state's licensing rules, then pick an amount that is clear and that you will apply every time.
Can a daycare charge parents a card processing fee?
Often yes, but some states limit card surcharges. Check your state's rules first, and write the fee into your payment policy so families agree to it at enrollment.
Should tuition be due when a child is absent?
Most centers charge tuition for scheduled days whether or not the child attends, because staff and space are reserved. Say this clearly in the policy, including how holidays and closures are handled.
How do I get parents to pay daycare on time?
Have every family sign a clear payment policy, set up autopay at enrollment, send reminders before the due date and apply late fees consistently. Daycare billing software can do the reminders and late fees for you.