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Employer Childcare ROI Calculator

Model a childcare investment against turnover, absenteeism, and the 2026 Section 45F credit — with every assumption in the open.

Educational estimate 2026 IRS §45F rules All assumptions editable

Your inputs

Annual figures. Change anything; results update as you type.

1Workforce

Total employees

Employees with young children

Employees who could plausibly use the program.

Average annual salary

Annual turnover rate

Share of employees who leave in a year.

2Cost of the problem

Replacement cost per departure

% of salary

Recruiting, onboarding, training, lost productivity.

Childcare-related absence days per parent-employee

days / yr

Cost per lost workday

Leave 0 to use salary ÷ workdays per year (see assumptions).

3Your investment

Total annual childcare investment

Everything you expect to spend in the year: facility, operator contract, subsidies, referral services.

Qualified childcare expenditures

Portion eligible for the 40% / 50% credit: facility costs or contracts with a qualified facility or intermediary.

Qualified resource & referral expenditures

Portion eligible for the 10% credit.

Eligible small business?

For tax years beginning in 2026: average annual gross receipts over the preceding five years of $32 million or less (IRC §448(c) test, as applied by §45F).

Assumptions used in the math +

Turnover reduction among parent-employees

Relative reduction. Library default is conservative; the five Field Studies report roughly 14% to 50%.

Reduction in childcare-related absences

Nexura default assumption. Programs address only part of care disruptions.

Workdays per year

Used only when cost per lost workday is left at 0.

Locked to current law (not editable):

Credit rate, qualified childcare expenditures: 40% (50% eligible small business)

Credit rate, resource & referral: 10%

Annual credit cap: $500,000 ($600,000 eligible small business)

Applies to amounts paid or incurred after Dec. 31, 2025; caps inflation-adjusted after 2026

Source: IRS — Employer-provided child care credit: Tax year 2026 and later. The credit is a nonrefundable general business credit claimed on Form 8882; it can only offset tax you owe, and this tool does not model your tax liability, carryforwards, basis reduction, or recapture.

First-year estimate

—

Return on net investment, year one

Workforce savings

Turnover savings

—

Absenteeism savings

—

Total workforce savings

—

Investment

Gross investment

—

Section 45F credit

—

Net investmentGross investment minus 45F credit

—

Return

Net first-year resultSavings minus net investment

—

PaybackNet investment ÷ monthly savings

—

Qualified expenditures exceed your total investment. Check the two figures — qualified amounts are normally a subset of total spend.

The credit is limited by the annual cap for this filer type.

Employees with young children cannot exceed total employees.

Educational estimate only. Not tax, legal, or financial advice. Results depend entirely on the figures and assumptions you enter. Whether specific expenditures qualify under Section 45F, how the credit interacts with your tax position, and any state credits are questions for your tax adviser. Current IRS guidance: irs.gov — Employer-provided child care credit (tax year 2026 and later).

How the math works

Every line, shown.

The calculator uses six formulas. Nothing is hidden and nothing is weighted.

Turnover savings = employees with young children × turnover rate × turnover reduction × (average salary × replacement cost %)

Absenteeism savings = employees with young children × absence days × absence reduction × cost per lost workday
If cost per lost workday is 0, the tool uses average salary ÷ workdays per year.

45F credit = lesser of [ (40% or 50%) × qualified childcare expenditures + 10% × qualified resource & referral expenditures ] and the annual cap ($500,000 or $600,000)

Net investment = gross investment − 45F credit

ROI % = (total workforce savings − net investment) ÷ net investment

Payback (months) = net investment ÷ (total workforce savings ÷ 12)

Where the defaults come from

Replacement cost, 33% of salary — Work Institute's conservative method for estimating the cost of turnover (2024 Retention Report). Many roles cost more; adjust to your own data.
Five childcare-related absence days per year — in line with published estimates of working days parents miss to childcare disruptions (Child Care Aware of America; Washington state disruption study). Your HR records are better than any national figure.
15% turnover reduction — a Nexura default set at the low end of what the Library's Field Studies report (Vermeer: 14% lower turnover among center users; Kaniksu: 38% to 19% organization-wide; Tyson: 30–40% better retention among participating parents). Outcomes vary widely by design and by workforce.
50% reduction in childcare-related absences — a Nexura default assumption, not a sourced figure. Programs typically address some, not all, care disruptions.
Section 45F figures — IRS, tax year 2026 and later; statutory text at 26 U.S.C. §45F.

What this tool leaves out

Your actual tax liability. The 45F credit is nonrefundable and only offsets tax owed; unused credit follows general business credit carryback and carryforward rules.
Basis reduction and the rule against double benefits: expenditures used for the credit cannot also be deducted or used for another credit.
Recapture if a qualified facility stops operating or changes hands within ten years.
State employer-childcare credits, which exist in a number of states and can stack with 45F.
Recruiting advantages, employee tuition revenue, community slots, productivity, and the value of shifts covered — real in the Field Studies, but not modeled here.