Childcare costs are often cited as a major drag on many households' budgets, with many referring to it as a second mortgage.

But how much is the average family spending on childcare? Are some counties more affordable than others, and how does Ireland stack up against its European neighbours?

So how much does childcare cost in Ireland?

The 'Early Years Sector’ includes everything from creches to early education providers, community childcare facilities and so on.

State body Pobal works with community groups and organisations in a number of areas, including the Early Years Sector, and its annual report gives a lot of detail on the costs involved.

According to its 2020/21 report, the average cost of full-time childcare in Ireland last year was just shy of €187 per week.

That means, on average, you’re looking at almost €810 a month – and about €9,340 euro a year on the basis of the child attending for 50 weeks per year (which takes the likes of Christmas, Easter and other holidays into account – when facilities may not charge a fee).

Does it differ county-by-county?

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Yes – and by a lot in some cases.

As you’d expect, Dublin is the most expensive place in the country for full time childcare.

Specifically, it’s the Dún Laoghaire-Rathdown area of Dublin that tops the table, at an average cost of €244 per week.

That’s about €57 more than the national average.

Multiplied out, you’re looking at €1,058 a month – and over €12,200 a year month.

The rest of Dublin is a bit cheaper – to the tune of around €30 per week – but that still makes them the next most expensive areas of the country.

After that is Wicklow, where the average cost is €213 a week – or €924 a month, or €10,670 a year.

Then we move to Cork – with Cork City costing €204 a week, and the county coming in about €10 cheaper than that.

Despite being more urban, both Limerick and Galway, are a fair bit cheaper than Dublin and Cork.

You’re looking at €175 and €173 there respectively. That’s €760 or €752 a month, or a bit over €8,700 a year.

And Donegal sits between those two at €174 a week.

For the lowest costs, you have to go to Carlow.

There, the average is €152 per week. That’s about €659 a month, and €7,600 a year.

That means that the average parent in Dún Laoghaire-Rathdown is paying about 60% more per week than the average parent in Carlow.

In real terms, that works out at an extra €92 a week – or almost €400 a month – or €4,600 a year.

Is the county the main factor that determines price?

No, there are a lot of factors – and those averages hide a lot too.

The Pobal report points out that, in Dún Laoghaire-Rathdown, they found one provider that was charging €324 per week – that’s €1,400 a month. But in the same area there was another provider that was charging €134 a week – or a bit over €580 a month.

So that’s a remarkable difference in a relatively small area.

And there are lots of other, broad factors that can have an impact.

Urban areas average out at €18 more expensive per month than rural ones, for example. A facility in a more affluent area tends to come with a €50/week premium. Private operators are, on average, €18 more expensive each week than community facilities.

But another big factor, whether it’s a community or private facility, is the age of your child.

Children under one are the most expensive – and the cost falls as they get older.

The average private childcare charges more than €200 a week for a child under one – but charges a bit over €182 a week for a child that’s over five.

That comes down to the fact that you need more staff for smaller children – so it’s going to cost more for a facility to mind a baby compared to a toddler, or a five year old.

Is the difference in costs made up for by the different average incomes in each county?

Sometimes – but often one doesn’t balance out the other.

The Central Statistics Office has data on people’s disposable income, broken down on a county-by-county basis.

Its definition of disposable income is all a person’s income – be it from their job or any social benefits - minus taxes and any social insurance contributions they pay.

For most workers, it’s the money they have in their pay-packet following all their deductions.

According to the CSO, the average person in the country had a disposable income of €23,615 in 2020.

For the sake of comparison let’s imagine a household with a small child and two adults, both on average incomes.

That means, nationally, you have a disposable income of a bit over €47,000 coming into the house.

With the average, national childcare cost works out at a little over €9,000 a year, it means that average household is directing about 20% of their income towards the cost

Dublin is the most expensive county for childcare – but incomes are, on average, higher too, so it still works out at a little over 20% of a two-household income there.

But in other parts of the country, the ratio is worse.

In Laois, for example, two average earners are directing more than 25% of their income towards what would be the average cost of childcare in that county.

Westmeath, Donegal and Offaly aren’t far behind – two average earners there are spending just under 25% of their disposable income on childcare.

If you want to know where things are better – or less bad – you can look to Limerick.

That average household is directing about 17.5% of its disposable income towards childcare each month.

In Carlow, the cheapest county in the country, it is just below the 18% mark.

How much do other child-care options cost?

Some people may want to go down the route of a childminder, or even a nanny or au pair.

Getting figures on this is a little trickier because it’s a less formalised part of the childcare sector.

But according to MindMe.ie – one of the country’s biggest listings sites for care-givers – the cost for an in-home minder tends to be between €10 and €15 per hour.

Again it differs from county-to-county.

In more urban areas like Cork and Galway it averages at €12 an hour, while Kildare and Meath are €11-12.

Dublin, once again, is the most expensive at €15 per hour.

According to Childminding Ireland, the price of a childminder who minds a child or children in their own home is lower again. It says its members charge, on average €5 per hour, though again that may differ from place to place.

So how does all of that compare with the rest of Europe?

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Not well.

The OECD published a report comparing childcare systems across Europe back in 2020 – and it probably gives the best look at where Ireland sits in relation to its neighbours.

Based on the percentage of income that goes to childcare, Ireland the third most expensive country in the European Union – and the fourth most expensive in Europe, if you include the UK.

Cyprus is top of the table, with an average couple there having to divert 30% of their income towards childcare.

In Czechia it’s 29% - as it is in the UK at the moment.

Ireland comes in next at 20%.

But things really start to drop sharply as you move across EU countries after that.

Finland, for example, is next at 15%, then there’s The Netherlands at 12%.

And at the bottom end of the table, you see that the average couple in Greece puts just 6% of their income to childcare. In Germany it’s as low as 1% - while in Italy it’s zero.

How is there such a big difference?

What’s interesting when you look at this OECD survey is that, in terms of the overall cost of childcare, Ireland isn’t quite as bad as those figures may lead you to believe.

The country is still near the top of the table in terms of gross cost, and still well above the EU average – but we’re actually behind the likes of Greece, The Netherlands and Luxembourg, and just ahead of Italy.

And yet, when it comes to how much people actually have to put towards childcare, we’re in a much worse position than those countries.

And the reason for that is that these countries use a range of measure - like grants and tax reliefs - to allow parents to recoup a sizable proportion or, in some cases, the entire amount.

Some countries heavily subsidising it at source, or else the system is largely state-run, so the cost is absorbed into their exchequer.

Let’s look at some specific examples…

It can be hard to compare like with like, because each country takes a different tact in terms of how they deliver childcare and how they cover the cost.

But let’s look at Germany – and how it’s possible that parents there spend just 1% of their income on childcare.
In Germany childcare is heavily subsidised by the national government, but also the regional government. And children there are legally entitled to a place in childcare from the moment they turn one.

Generally speaking the amount the parent pays is based on their income – and if they have a low income, they may pay nothing at all towards childcare.

Those with higher incomes will have to pay something – but that may be less than €100 a month. One figure suggests that, even if you’re a higher earner, you would be paying just €580 a month towards it - which is about €230 less than the average parent is paying here.

Interestingly, about 10 years ago Germany also introduced a payment for parents – of €150 per month - which can be claimed if they don’t make use of childcare but instead care for their young child in the home.

The Nordic countries are often seen as the gold standard – what are the systems like there?

In Sweden, all children have a right to early education from the age of one.

Their parental leave system gives 480 days between the parents, so a parent could easily take a year of paternity or maternity leave to cover the time up to that point.

When they do go into childcare, the fee for one child is capped at 3% of the parents’ income.

The fee is then lower for any subsequent children, or for children of those on lower incomes.

In Denmark, the state covers 75% of the cost of a place in any publicly-funded childcare facility.

Discounts are offered to siblings, or children with special needs, and low income parents can get supports to cover the cost too.

Around 9-10% of an average couple’s income is going towards childcare in Denmark.

In Finland, meanwhile, the state actually helps parents to find childminders or creche places – and the cost is heavily subsidised, again based on income, with costs of around €300 per month at the upper end.

How is that made possible?

As I mentioned, the actual cost of delivering childcare is similar in many countries – or in some cases higher than in Ireland – so essentially, it’s down to how much the State is putting into childcare itself.

And you can see the gap in another chart from the OECD – though it should be said the data is from 2015, so it’s a bit out of date.

But it found that Sweden was putting 1.6% of its GDP towards early childhood education and care.

In Denmark, it’s about 1.3%, in Finland it’s around 1.2%.

Germany is 0.6%.

Ireland, meanwhile, was bottom of the table – with just 0.3% of GDP going towards the area.

Now that difference may not seem dramatic – but you may actually be talking about billions of euro. In Ireland last year, 1% of our GDP was the equivalent of around €4.3 billion.

But of course in order to spend that extra money, it has to come from somewhere else…

Yes. As we know, and as we’ll hear a lot more of in the coming weeks, outside of any dramatic change in the economy, reallocating budget resources means either take money from one area, or finding a way to increase the total amount that’s coming in.

There’s nothing stopping Ireland from putting more of its GDP towards childcare costs – but, outside of a sizable surplus, that money has to come from somewhere else.

The OECD itself says that the likes of the Nordic countries simply consider childcare an essential public service, so they’re willing to make that trade-off.

The alternative is to have higher taxes to try to deepen the pool you can fund things from – and this is also a feature of most other European countries.

Ireland, of course, has one of the lowest Corporation Tax rates in the world – and in particular in Europe.

Our rate is currently 12.5% - but Italy is at nearly 28%.

The Netherlands’ rate is 25% – the Nordic countries, meanwhile, all tax company profits at a rate of 20-22%.

So they’re taking a bigger proportion of the profits made by each company than we are.

VAT is also slightly higher in Nordic countries – but perhaps the big difference is around income tax.

In Finland, a higher earner – someone earning over €83,000 a year – would be looking at a rate above 65%. But even someone on a fairly average wage – over €29,000– would be facing a rate of somewhere in the region of 50%.

In Sweden, the average rate is around 32% – but people earning over €50,000 a year get an extra 20% added to that, so that brings the rate above 50%.

Another interesting feature of the Swedish system is a fairly sizable employer contribution, too.

It’s set at more than 31% of an employee’s salary – and it’s a huge contributor to the Swedish exchequer. It accounts for about a quarter of the country’s tax revenue.

That helps to cover the cost of many of the generous social security policies that Sweden has in place.

So what kind of supports are there to help families here with childcare costs?

There’s a Universal Childcare Subsidy for children over six months, but who are too young to start the Early Childhood Care and Education scheme (which kicks in for children that are at least 2 years and 8 months old)

The universal subsidy is worth 50c an hour, up to a maximum of 45 hours. So that means, at most, it’s covering €22.50 of the weekly childcare bill.

There’s also an income-assessed subsidy for children up to 15 – this one is a bit more complex because it differs depending on a household’s income, the child’s age, and also the number of hours it covers depends on whether the parents are working full time or not.

But it can offer a subsidy of between 33c and €5.10 an hour, up to 45 hours a week. So at the top end that could be €229 a week.

And then there’s the ECCE scheme I mentioned – which covers the cost of three hours of pre-school a day, during the school calendar.