Search: Employer & Community Services > Child Care Options For Employers > Providing Financial Assistance to Employees Child care expenses can place severe financial strain on a family. Costs for child care can range from $1,500 to $15,000 per year, depending on child care fees and the number of children in a family. Many families spend at least 10% of their income to pay for child care services. In single-parent or low-income families, that percentage can be considerably higher. The high cost of care prevents some families from choosing the highest quality care. As a result, parents may select unstable arrangements that create greater stress and reduce their effectiveness at work, and may compromise their child's development. Employers can help families with child care costs in a number of ways. Dependent Care Spending Assistance Plan (DCAP): Money is set aside from an employee's gross salary into a nontaxable spending account to pay for child care. Neither the employer nor the employee pays taxes on the amount of salary reduced for child care. The employee is able to pay for child care expenses with tax-free dollars. Flexible Benefit Plans: Also called a "cafeteria plan," these plans allow employers to offer a range of benefits. Employees choose from a menu of benefits and customize their benefits package. For example, some employees may have health insurance provided by a spouse's employer and may choose a child care benefit instead. Child Care Vendor Plan: An employer or group of employers contracts with a local child care program to reserve slots for company employees. The employers pay a portion of the employee's child care costs directly to a child care program. Advantages: Most options require little administrative responsibility Can support and strengthen community services Appropriate for any size company Does not require capital investment or start-up costs Considerations: Some options can be costly Only impacts the cost of care; not a solution for low supply or poor quality. Back to top