Charging Hourly vs. Flat Rate?

[Willow]

Or maybe I'm misunderstanding ... I charge a flat weekly rate based on the maximum hours that the families need. Many of my families are charged a different rate because they have different scheduled hours but their weekly rate is always the same. Is that what you mean by hourly?

Not quite, but almost

All of my families work or go to school full time. They NEED care Monday through Friday x-am through x-pm so it's never been an issue for me to have a child come 40 hours one week and only 8 the next. If they pulled that they'd lose their jobs or fail out of school. These are two parent working families who need the income. I screen carefully for this at interview time. They must value stability, and understand full well that kids keeping the same schedule day to day is incredibly important. It's not difficult to pick parents like that out, they're pretty obvious

In the very unforeseen and rare circumstance that say, there is a death in the family and they need to attend a funeral out of state, have a grandparent want to kidnap them for the week or they happen to take a vacation, that's where my 20 hour minimum would come into play. But if they happen to just get off work early by a half hour or school is out a day or two here and there that's where hourly pays off for them.

I keep track of in an out times, add them all up, multiply by my hourly rate and send my invoices off every two weeks - after services rendered. Totals rarely vary more than $20 from invoice to invoice and I'm completely fine with that.

Those little bits don't impact my bottom line much at all and I like that parents promptly shoot over here if they have the chance to come early. Kids are happy, parents love it, and I make money and retain great clients who jump at the chance to spread the word about me as a great and fair provider. Win, win, win...win, win

Even as a single mother of two I made plenty enough to pay my bills, take care of necessary daycare expenses and have wiggle room to spoil myself and my kids. I'm not going to lie, the invoicing can really be a pain, especially with families who have two kiddos and one is gone at pre-k for a portion of the day. But I see that as the only downfall and the payoff makes it well worth the extra hassle.



All that said, I will say I understand full well why it wouldn't be for everyone. I keep a small group, and for large groups it would be pretty tough to manage. If you've been burned enough times I can see why you'd do things differently as well.

[Unregistered]

Cover all your bases and make sure there are no misunderstandings with a new contract

I bill flat rate with contracted hours.

that and if they go over contract hours charge an over time fee such as $1/minute early drop off or late pick up; or $5 for every 15 minute incriment early drop off/late pick up both starting with in 5 minutes of being early or late. Because that can mess with your numbers if you have part timers coming in and out at different times of the day, which can get you introuble with licensing if they come to do an inspection that one time 1 have 1 more kid- it happened once to a lady I used to work for one of her assistance when to get some kindergartners and she was one kid over when the inspector came and she got had to pay a penalty/fee and all the parents in her program as well as the ones who sign up for the next year had to sign a paper that said they understood that she was alone with one extra child than she was allowed to have for 15 minutes- luckly she's been in business for over 30 years and she was well respected in her community (she was one of the most indemand providers in her area) and her parents thought it was stupid that the inspector wrote her up for that.

[EAP]

I'm considering changing my fee structure to include a higher fee for 50+ hours of care or 10+ hours a day, I am not sure which is the better way to go. My hope is the 50 hours plus would discourage long days.

5-20 hours (used in a 2 day time period) xxx/week
21-30 hours (used in a 3 day time period) xxx/week
31-50 hours (used in a 5 day time period) xxx/week

choices:

Anything over 10 hours/day $5/hour (charged for any portion of the hour used)

or

50+ hours is xxx/week

Which makes more sense?

ETA: just saw how old this post was ! haha - I searched the topic hoping for a recent thread...oops!

[rmc20021]

I USED to do hourly when I started daycare the first time around many years ago and would NEVER go back to it.

I found parents would find reasons and free sitters to keep their kids all the time. I never knew what my income would be. And trying to keep track of everyone's hours!!!! Then there's always parents who want to 'argue' about how many hours you're charging for...they have 'different' hours figured out. Nope, not worth it to me.

[EAP]

My parents are contracted to their hours so they would always fall in a certain range I can predict - if they wanted to change from 5 day to 2 day that would require an actual contract change that I would need to approve.

[rmc20021]

I'm considering changing my fee structure to include a higher fee for 50+ hours of care or 10+ hours a day, I am not sure which is the better way to go. My hope is the 50 hours plus would discourage long days.

5-20 hours (used in a 2 day time period) xxx/week
21-30 hours (used in a 3 day time period) xxx/week
31-50 hours (used in a 5 day time period) xxx/week

choices:

Anything over 10 hours/day $5/hour (charged for any portion of the hour used)

or

50+ hours is xxx/week

Which makes more sense?

ETA: just saw how old this post was ! haha - I searched the topic hoping for a recent thread...oops!

I charge for anything over 10 hours per day because I felt if I used 50 hours per week that parents might think it's ok to pick up at the 11th hour and make up for it later in the week. I don't want to have plans, thinking all my dck's are leaving by 5 pm and have that one who thinks they can use an extra hour to arrive at 6 pm for pickup. I want to know all my kids will be gone after 10 hours every day.

[daycarediva]

I'm considering changing my fee structure to include a higher fee for 50+ hours of care or 10+ hours a day, I am not sure which is the better way to go. My hope is the 50 hours plus would discourage long days.

5-20 hours (used in a 2 day time period) xxx/week
21-30 hours (used in a 3 day time period) xxx/week
31-50 hours (used in a 5 day time period) xxx/week

choices:

Anything over 10 hours/day $5/hour (charged for any portion of the hour used)

or

50+ hours is xxx/week

Which makes more sense?

ETA: just saw how old this post was ! haha - I searched the topic hoping for a recent thread...oops!

This is what works well for me. When this thread was written, I had all FT kids or they paid for a FT spot. Since then, I had a bit of turnover (family moved, dcm lost her job and I termed) and filled a couple of those spots in with PT'ers and my rate schedule for this is below.

I ONLY ALLOW 10 hour days, contracted hours with agreed upon drop off and pick up times. If they want more than that, it is $5/hour or partial hour and I have to approve the schedule change in advance. There are forms by my front entrance that they can grab and submit to me with date and time. I let them know if they are approved, and they have to pay the morning of/prior to the extended care time.

50 hours/or 5-10 hour days-175/week
40 hours/or 4-10 hour days-160/week
30 hours/or 3-10 hour days-135/week
20 hours/or 2-10 hour days-100/week *I only do 2 days if they can work around another PT schedule*
10 hours-$50 or $5/hour with a minimum of 4 hours/$20

This works out great for me, it's a little less money, but also less work. I do have one family that uses me for T-W-TH and another that uses me for M-F, so for one space, I am making $235 instead of $175 regular FT rate.

[LaLa1923]

I'm considering changing my fee structure to include a higher fee for 50+ hours of care or 10+ hours a day, I am not sure which is the better way to go. My hope is the 50 hours plus would discourage long days.

5-20 hours (used in a 2 day time period) xxx/week
21-30 hours (used in a 3 day time period) xxx/week
31-50 hours (used in a 5 day time period) xxx/week

choices:

Anything over 10 hours/day $5/hour (charged for any portion of the hour used)

or

50+ hours is xxx/week

Which makes more sense?

ETA: just saw how old this post was ! haha - I searched the topic hoping for a recent thread...oops!

I do a flat rate based on 45 hours and after that it's $5 an hour.

[MarinaVanessa]

I do both.

For example ...

Full-time is 4-5 days per week and charged at a flat weekly rate of $$$ per week, paid on the child's last day of attendance for that week which covers the following week in advance. This flat fee covers up to 50 hours per week and up to 10 hours per day. Anything over 10 hours per day or over 50 hours per week is charged an extra fee at the rate of my drop-in. Their spot is guaranteed.

Part-time is charged on a flat weekly rate also (is charged more hourly than full-time) which depends on the child's pick-up time (Nan's fee schedule). Part-time is considered 2-3 days per week up to 30 hours per week and no more than 10 hours per day. Anything over 10 hours per day or over 30 hours per week is charged an extra fee at the rate of my drop-in. Their spot is guaranteed.

Drop-in clients are charged a daily or hourly rate (daily is more expensive than a full part-time day but less expensive hourly than drop-in hourly). Their spot is not guaranteed and based on availability. Flexibility costs extra.


In all honesty I think that the reason why OP doesn't have issues with people misusing their times is because you charge weekly... otherwise I think that your clients may all of a sudden find friends/family to help care for their child on some days in order to save money but leave them in DC longer on some days since they are now saving money.

[LaLa1923]

I do both.

For example ...

Full-time is 4-5 days per week and charged at a flat weekly rate of $$$ per week, paid on the child's last day of attendance for that week which covers the following week in advance. This flat fee covers up to 50 hours per week and up to 10 hours per day. Anything over 10 hours per day or over 50 hours per week is charged an extra fee at the rate of my drop-in. Their spot is guaranteed.

Part-time is charged on a flat weekly rate also (is charged more hourly than full-time) which depends on the child's pick-up time (Nan's fee schedule). Part-time is considered 2-3 days per week up to 30 hours per week and no more than 10 hours per day. Anything over 10 hours per day or over 30 hours per week is charged an extra fee at the rate of my drop-in. Their spot is guaranteed.

Drop-in clients are charged a daily or hourly rate (daily is more expensive than a full part-time day but less expensive hourly than drop-in hourly). Their spot is not guaranteed and based on availability. Flexibility costs extra.


In all honesty I think that the reason why OP doesn't have issues with people misusing their times is because you charge weekly... otherwise I think that your clients may all of a sudden find friends/family to help care for their child on some days in order to save money but leave them in DC longer on some days since they are now saving money.

Where is her fee schedule??

[lovemykidstoo]

This is how I've done it for 20 years! I love it. I never even remind my parents to pay. Every Friday, they all come in with cash automatically. Nice!

Same here!

[MarinaVanessa]

Where is her fee schedule??

I will PM you a link to an example.

[Unregistered]

DHS Payments

With your family's that get help thru DHS, how does that work if your daycare has a flate rate? New to daycare and have a few families the only way they can get daycare paid for is thru DHS payments. Paperworks states the DHS will pay 95% and client to pay 5%. If I have a flate rate will DHS pay my flate rate? Just having questions regarding after school care. Kids are only there 2 hours daily and 10 hours weekly. Full-time babies are there more and I will have no trouble with their hours.

Thanks!

[Blackcat31]

With your family's that get help thru DHS, how does that work if your daycare has a flate rate? New to daycare and have a few families the only way they can get daycare paid for is thru DHS payments. Paperworks states the DHS will pay 95% and client to pay 5%. If I have a flate rate will DHS pay my flate rate? Just having questions regarding after school care. Kids are only there 2 hours daily and 10 hours weekly. Full-time babies are there more and I will have no trouble with their hours.

Thanks!

What state are you in?

Some states do not allow providers to charge families on assistance anything more than the state pays out.

I am in MN and I charge about $3 more per day than the state assistance program pays out so my daycare parents pay that $3 per day PLUS whatever co-pays they have.

[Second Home]

When I first opened ( 11+ years ago) I did hourly and it was a nightmare . Even with a contract that clearly spelled out rates and what would be owed there was always one dcp who would not want to pay what they owd because they were 1 minute early so they did not feel they needed to pay for the hour , or the dcm who would count up the minutes for the whole week and try to pay me by the minute so she would pay less .

Not worth it .