Last Updated April 13, 2023
A Child Care Contract is also known as:
- Agreement for child care services
- Babysitter contract
- Home daycare contract
- Nanny employment contract
What is a Child Care Contract?
A Child Care Contract outlines the terms and conditions for child care services between a family and a caregiver. You can customize LawDepot’s Child Care Contract template to suit a variety of arrangements, including drop-in, in-home, temporary, or regularly scheduled child care. Use our template if you’re a parent hiring a babysitter or nanny, or if you’re a professional child care provider such as a daycare or day home.
LawDepot’s Child Care Contract template addresses the key terms that ensure both parties have a clear and mutual understanding of the agreement. Fill out the questionnaire with the following information to complete your custom agreement:
- The child care services to be provided (supervision, meal preparation, educational activities, etc.)
- Payment details (option to include late payment charges or a deposit)
- How expenses may or may not be reimbursed
- The facilities or material assistance available (things that the client makes available to the child care provider, such as vehicles or home kitchen access)
To provide additional protection to the parents or service provider, our template also includes optional clauses regarding:
- Confidentiality
- Duty of care
- Limitation of liability
A confidentiality clause requires the child care provider to keep sensitive information about the child or family private. The requirement for confidentiality may remain in effect indefinitely.
With a specified duty of care, the caregiver must provide a reasonable standard of care to prevent injuries in any situation in which they’re supervising the child or children. For instance, if the caregiver fails to secure a child properly into a car seat, gets into an accident, and injures the child, the parents may hold the caregiver liable for medical bills and compensation.
A limitation of liability clause makes clear that the child care provider will have no liability to the client or any other party for any loss or damage (whether direct or indirect) which may arise from the provision of the services. However, this does not protect the child care provider from their own negligence.
How do you calculate child care costs?
Generally, child care providers establish their own billing details, such as their billing rate, deposit amount, late fee amount, and tax inclusion.
Billing rate
You can charge either a flat fee (a payment made in full at a certain time) or an hourly rate (a payment that the caregiver earns as they work and that the client pays periodically). Factors that may affect your billing rate include:
- The length of the contract (whether it be temporary or ongoing)
- The skills required for the job (if the client requires educational tutoring or if the child has special needs)
- The scope of child care (if it includes supervision, transportation, meal preparation, etc.)
Deposit amount
Child care providers may require clients to make a deposit, usually between 10% and 50% of the total contract amount, before they begin supplying care. Factors that affect the deposit amount may include:
- The stability of the client’s financial situation
- The degree of trust between the client and the child care provider
- The presence of a rival business that may offer competitive prices
Late fees
You may set a reasonable time period for the client to pay an invoice (often within 15 to 30 days of receipt). If payments aren’t made within this time frame, child care providers may charge late fees in addition to the outstanding invoice amount. Typically, late fees are no more than 10% per year on any overdue amounts. Caregivers may choose to impose late fees to:
- Encourage clients to pay on time
- Maintain a positive cash flow
- Avoid carrying clients’ debt
Sales tax
If you’re an independent contractor (i.e., you work for yourself or own a small business), you’ll need to pay taxes differently than an employee. For example, unless you are a small supplier, you’re required to charge, collect, and transfer sales taxes for your services and any supplies you use to do your job. Be sure to research how to charge GST/HST in your province or territory.
Although supplies and materials aren’t taxable if the client pays for them, child care providers can claim tax relief on any expenses that are for their business. For instance, you can expense any groceries, diapers, toys, or art supplies you buy to take care of a client’s children. If you provide child care in your own home, you may be able to deduct expenses such as electricity, insurance, or rent from the taxes you pay.
Why are policies and procedures important in childcare?
Some government policies mandate how child care providers should handle certain situations, such as what to do when a child has a communicable disease or how to serve snacks and meals for children in full- or part-time care.
Both parents and childminders should research and adhere to local guidelines to avoid potential liability disputes. Although LawDepot’s Child Care Contract includes an indemnification clause, a child care provider’s liability also depends on your jurisdiction’s applicable laws.
As such, you may wish to outline certain emergency procedures or guidelines in your Child Care Contract to ensure that all parties understand the expectations for child care providers. If needed, add these instructions in the Additional Clauses section of the questionnaire.
As a parent, you may also wish to complete a Child Medical Consent form so the child care provider can consent to medical treatments in the absence of a legal guardian.
How do I cancel my Child Care Contract?
There may be a time when one or both parties decide to terminate the contract before its official end date. In this case, you can set a period of time for either party to provide notice of early termination.
As the child care provider, you may also want to address partial payment for services in your contract. Often, providers require partial payment if the client terminates the contract after they've invested a significant amount of time or resources. You can add any specific cancellation policies in the Additional Clauses section of the questionnaire.