Childcare Centre Accounting Singapore: Preschool Fees, ECDA Funding, GST and Tax
Childcare centre accounting in Singapore rests on one rule: you earn a fee as you provide the care. Fees paid in advance and refundable deposits stay as liabilities until then, and ECDA subsidies paid to you for a child are part of that child's fee, not a grant. GST and the $1 million registration test use that full fee; grants follow separate tax rules.
This guide is for owners and finance managers of private infant care, childcare and kindergarten companies, including Partner Operators. Amounts are in Singapore dollars, and the rules are as at November 2026.
Key takeaways
- Revenue: fees are earned over the month or term of care, so advance fees and refundable deposits are liabilities until then.
- GST: a GST-registered operator charges 9% GST on the full fee before deducting a subsidy awarded to the child, so count full fees for the $1 million registration test.
- Grants: operating grants are taxable. Capital grants are not, but spending funded by a government capital grant approved on or after 1 January 2021 gets no deduction or allowance.
- Renovation: up to $300,000 of qualifying spending in YA 2025 to YA 2027 is deductible under section 14N.
- Payroll: employer CPF is 17% for staff aged 55 and below. Pay CPF and SDL by the 14th of the following month to avoid enforcement action and 1.5% monthly interest.
Table of Contents
- How Do You Account for Preschool Fees, Subsidies and Deposits?
- Are ECDA Grants and Subsidies Taxable?
- Do Childcare Centres Charge GST in Singapore?
- Preschool Staff Costs and Payroll
- Can a Childcare Centre Claim Renovation Costs for Tax?
- Consolidation and Audits for Multi-Centre Groups
- Chart of Accounts and Month-End Checklist for Childcare Centres
- Childcare Centre Compliance Calendar
- Common Childcare Centre Accounting Mistakes in Singapore
- When Should a Preschool Get Professional Help?
- Frequently Asked Questions
- Official Sources
How Do You Account for Preschool Fees, Subsidies and Deposits?
Operator models and who pays
Your Early Childhood Development Agency (ECDA) model decides who pays and whether your fees are capped:
| Model | Fees | Who pays |
|---|---|---|
| Private operator | Set by you | Parents, plus ECDA subsidies for Singapore Citizen children |
| Partner Operator (2026 to 2030 term) | Full-day fees up to $650 (childcare) and $1,290 (infant care) a month for Citizen children, excluding GST | Parents, subsidies and ECDA funding |
| Anchor Operator (five large operators) | Full-day fees up to $610 (childcare) and $1,235 (infant care), and $150 (kindergarten), excluding GST | Parents, subsidies and ECDA funding |
ECDA's Basic Subsidy, for every Singapore Citizen child at a licensed infant care or childcare centre, and its means-tested Additional Subsidy are paid directly to the centre. This guide assumes a private limited company; charities and companies limited by guarantee report under different frameworks.
Fees are earned as you provide care
Recognise fees in the month or term of care. SFRS for Small Entities recognises tuition fees "over the period of instruction", and its third edition (financial years beginning on or after 1 January 2027, with earlier adoption allowed) treats payments received before the service as a contract liability. Invoices and payments for future months therefore sit in Fees received in advance.
GST timing differs: output tax is due at the earlier of the invoice date and the payment date, so a December invoice for January fees goes into the GST return covering December.
Registration fees depend on your accounting standard
A non-refundable registration fee secures a place, while the care is billed monthly:
| Framework | Registration fee |
|---|---|
| SFRS for Small Entities, years beginning before 1 January 2027 | Can be recognised when received if it buys only the place and the care is billed separately, by analogy with its membership-fee example |
| Its third edition from 1 January 2027, and FRS 115 | Part of the price of the care, recognised as the care is provided |
Companies that are not publicly accountable can use SFRS for Small Entities if they meet two of three tests: revenue of $10 million or less, total assets of $10 million or less and no more than 50 employees.
How should a preschool account for deposits?
As a liability, not revenue: a refundable deposit belongs to the parent. Hold it in Parent deposits held, with a register by child, until you apply it to fees, such as the final month, or keep it under your terms. For GST, IRAS treats a refundable security deposit as outside GST until it is used, while a deposit that is really a part-payment of fees is taxed when received. Forfeitures are less clear-cut: IRAS treats a forfeited tenancy deposit as outside GST but taxes hotel no-show charges, and its published examples do not cover a forfeited preschool deposit.
Worked example for a subsidised child
Centre A (hypothetical) is GST-registered and charges $1,300 a month for full-day childcare. A Singapore Citizen child gets the $300 Basic Subsidy (the mother works) and an Additional Subsidy we assume is $200, both paid by ECDA to the centre. Both are treated as awarded to the child (see the GST section), so GST is charged on the full fee:
| March invoice | Amount |
|---|---|
| Full monthly fee | $1,300.00 |
| GST at 9% on the full fee | $117.00 |
| Less: ECDA subsidies | ($500.00) |
| Parent pays | $917.00 |
Book revenue of $1,300, output tax of $117, $917 due from the parent and $500 due from ECDA. Booking only the $917 understates revenue and GST. ECDA pays a month's subsidy only if the child attended at least one day, so reverse the receivable for a month with no attendance.
Are ECDA Grants and Subsidies Taxable?
Mostly, yes. IRAS taxes a grant that supplements trading receipts or defrays operating expenses, but not one given to buy capital assets. Spending funded by capital grants from the Government or statutory boards approved on or after 1 January 2021 gets no tax deduction or capital allowance. IRAS's grants list does not cover ECDA funding, so classify each grant by what its letter of offer pays for.
| Funding | Income tax | Accounts (SFRS for Small Entities) |
|---|---|---|
| ECDA subsidies for a child | Taxable as fee income | Revenue, with an ECDA receivable |
| Operator funding and grants for programmes or running costs, such as the Preschool Opportunity Fund | Generally taxable | Income when the conditions are met |
| Capital grants, such as for renovation | Not taxable | Income when the conditions are met |
| Wage credits, government-paid leave reimbursements and the SME Cash Grant 2026 | Taxable | Other income |
| CIT Rebate Cash Grant | Not taxable | Other income |
How to account for preschool government grants
Under SFRS for Small Entities, a grant without future performance conditions is income when receivable, one with conditions is income when they are met, and cash received earlier is a liability. A subsidy paid towards a specific child's fee cannot be distinguished from normal trading, so it is revenue, not a grant. Full FRS (FRS 20) instead matches grants to the costs they compensate.
Keep non-taxable grants in their own account so they are removed in your tax computation. For other 2026 measures, see our Budget 2026 guide for SMEs.
Do Childcare Centres Charge GST in Singapore?
Yes, if the centre is GST-registered. Childcare and preschool fees are not exempt, so a registered operator charges 9%. Registration is compulsory once taxable turnover exceeds $1 million in a calendar year, or is expected to within the next 12 months.
Count full fees for the GST threshold
Where the subsidy is awarded to the child, IRAS requires GST on the full fee because "that is the value of its service", and taxable turnover is the total value of your taxable supplies. So count full fees plus other taxable sales such as enrichment and transport. Centre B (hypothetical, unregistered) has 75 full-day children on an average fee of $1,200 a month, and parents pay an average of $750 after subsidies:
| Measure | Calculation | Annual total |
|---|---|---|
| What parents pay | 75 × $750 × 12 | $675,000 |
| Full fees (taxable turnover) | 75 × $1,200 × 12 | $1,080,000 |
If that is its 2026 turnover, Centre B must apply between 1 and 30 January 2027 and is registered from 1 March 2027. Late registration is backdated, so GST is due on past fees even if you never charged it, and IRAS can add a fine of up to $10,000 and a 10% penalty, which it generally waives if you disclose the lateness when you apply. Our guide on whether you need to register for GST explains the forward-looking test too.
Full fee or subsidised fee
IRAS says the answer "depends on whether the subsidy is awarded to the parent/child or to the GST registered childcare operator".
| Subsidy awarded to | ECDA example | GST charged on |
|---|---|---|
| The parent or child, even if paid to you | Basic and Additional Subsidies | The full fee, before the subsidy |
| The operator, so it can charge less | Funding to keep to a Partner or Anchor Operator fee cap | The subsidised fee |
ECDA says Partner and Anchor Operators receive funding to keep to fee caps that exclude GST (ECDA: Partner Operator Scheme). The funding goes to the operator, so a Partner Operator charges GST on its $650 cap, making $708.50, and deducts the child's subsidy afterwards.
Input tax and pricing
Outright grants are outside GST but can restrict input tax. IRAS treats a business whose subsidised services are funded by grants as partly non-business, so input tax on shared costs is apportioned; its worked example is a training provider, and operator funding that keeps fees capped would follow the same logic. IRAS also tells childcare operators not to claim input tax on renovation funded by a GST-inclusive government grant.
Once registered, quote GST-inclusive fees. Voluntary registration rarely suits a preschool, because parents cannot reclaim GST and voluntary applicants from 1 April 2026 must also use InvoiceNow.
Preschool Staff Costs and Payroll
Staff are usually a preschool's largest cost. The main 2026 rules:
| Item | Rule | Tax |
|---|---|---|
| Employer CPF | 17% for Citizens and third-year-plus PRs aged 55 and below (lower above 55), on ordinary wages up to $8,000 a month | Deductible |
| Skills Development Levy (SDL) | 0.25% of each employee's monthly wages, minimum $2, maximum $11.25 | Deductible |
| Foreign worker levy | Deducted by GIRO on the 17th of the following month | Deductible, net of rebates |
| Senior Employment Credit | Up to 7% of wages for Citizens aged 60 and above earning under $4,000 a month | Taxable |
| CPF Transition Offset | 0.25% of wages for staff aged above 55 to 65 | Taxable |
| Progressive Wage Credit Scheme | 30% of qualifying 2026 pay rises for Citizen and PR staff earning up to $3,000 before the rise | Taxable |
Pay CPF and SDL by the 14th of the following month to avoid enforcement action and interest of 1.5% a month, which is not deductible. Late CPF can also cost you wage credits and SME Cash Grant headcount. From 1 January 2027, employer CPF rises to 16.5% for staff aged above 55 to 60 and 13% for those above 60 to 65, and the S Pass minimum qualifying salary for new applications rises to $3,600.
With five or more employees, you must submit Form IR8A data through the Auto-Inclusion Scheme by 1 March, and Form IR21 is due at least a month before a non-Citizen employee stops working for you. Owner-directors should compare director salary and dividends.
Can a Childcare Centre Claim Renovation Costs for Tax?
Yes. Different lines of one fit-out get different treatment:
- Section 14N deduction for non-structural works such as partitions, flooring, false ceilings, lighting, wiring and sanitary or kitchen fittings, and from YA 2025 non-structural designer fees. Up to $300,000 per fixed three-year period (YA 2025 to YA 2027) is deducted over three YAs, or in one by irrevocable election.
- Capital allowances for furniture and equipment, generally over three years. Items of $5,000 or less can be written off in one year, up to $30,000 a YA, and computers are written off 100% in one year.
- No relief for structural works that need approval from the Commissioner of Building Control.
The cap is per company, not per centre. Renovation done before you open counts as incurred on your first day of business, and a deduction not claimed for the YA in which the spending is first incurred is lost.
Centre C (hypothetical) fits out leased premises in the year to 31 December 2026 (YA 2027), with no earlier claims in the period:
| Item | Cost | YA 2027 treatment |
|---|---|---|
| Partitions, flooring, ceilings, lighting, wiring, sanitary and kitchen fittings | $250,000 | Section 14N |
| Designer fees, non-structural | $20,000 | Section 14N |
| Furniture, cots and appliances, $5,000 or less each | $45,000 | $35,000 ($30,000 plus a third of $15,000) |
| Laptops and tablets | $8,000 | $8,000 |
| Removing a wall that needs Building Control approval | $15,000 | Nil |
The section 14N claim is $270,000: $90,000 a year for YA 2027 to YA 2029, or all of it in YA 2027 by election, which takes that year's claims to $313,000. Had a $50,000 government capital grant approved on or after 1 January 2021 funded part of those works, only $220,000 would qualify, and the grant would not be taxable. Keep the itemised list of works, confirmation that none needed Building Control approval, and the invoices. For running costs, see our guide to deductible business expenses.
Consolidation and Audits for Multi-Centre Groups
| Point | One company, several centres | One company per centre |
|---|---|---|
| GST $1 million test | All fees combine | Each company separately |
| Partial tax exemption | One | One per company |
| A new centre's losses | Offset other centres automatically | Need group relief |
| Section 14N cap | One $300,000, shared | $300,000 per company |
Group relief transfers current-year unutilised capital allowances, trade losses and donations between Singapore-incorporated companies with at least 75% common ownership and the same year end. It is claimed on Forms GR-A and GR-B with Form C, so neither company can file Form C-S. Under SFRS for Small Entities, a holding company presents consolidated financial statements unless it is itself a subsidiary of a consolidating group; our consolidation and group reporting service prepares them.
For audit exemption, a company in a group must pass the small-company tests both on its own and on the group's consolidated figures, for each of its past two financial years. A group with more than 50 full-time staff at its year end fails the employee test, so it must pass on both revenue and total assets, each $10 million or less. ACRA is reviewing these thresholds but had not changed them as at November 2026; see our guide to the small company audit exemption.
Chart of Accounts and Month-End Checklist for Childcare Centres
Adapt this chart to your centre. It separates the items that differ for revenue timing, GST or tax; tag every line by centre if you run more than one.
Suggested chart of accounts
| Code | Account | Why it is separate |
|---|---|---|
| 4010-4030 | Programme fees: infant care, childcare, kindergarten | Full fees, including subsidies |
| 4040 | Registration fees | Timing depends on your standard |
| 4050 | Enrichment, transport and sales | Count towards the GST threshold |
| 4510 | ECDA and operating grants | Taxable when conditions are met |
| 4520 | Wage credits and leave reimbursements | Taxable |
| 4530 | Capital grants and CIT Rebate Cash Grant | Not taxable |
| 1110-1120 | Fees receivable: parents, and subsidy receivable: ECDA | Reconciled child by child |
| 1510-1530 | Section 14N works, structural works, equipment | Different tax treatment |
| 2110 | Fees received in advance | Released monthly |
| 2120 | Parent deposits held | Not revenue until applied or forfeited |
| 2130 | Grants received in advance | Liability until conditions are met |
| 5010-5050 | Salaries, CPF, SDL, levy | Staff cost ratio |
| 5110-5130 | Food, learning materials, enrichment providers | Cost per child |
| 6040 | Repairs and maintenance | Deductible, unlike renovation |
Month-end close checklist
- Reconcile enrolment to billing. Match ECDA's Centre Management System records and your own register to the month's invoices.
- Book full fees. Record each child's full fee as revenue and split the receivable between the parent and ECDA.
- Reconcile ECDA subsidies. Match payments to children and reverse the subsidy for any child who attended no days that month.
- Defer and release fees. Move billings for future months to Fees received in advance and release last month's balance.
- Update the deposit register. Record new deposits, refunds, deposits applied to fees and forfeitures.
- Close payroll. Pay CPF and SDL by the 14th and check the foreign worker levy deduction on the 17th.
- Review grants. Recognise grant income only where the conditions are met, and tag capital grants to the assets they fund.
- Classify new assets. Split renovation invoices into section 14N works, structural works and equipment.
- Reconcile bank and payment channels. Match receipts to parents' accounts and clear unidentified amounts.
- Report. Prepare management accounts every month and the GST F5 every quarter.
KPIs to review every month
| KPI | How to calculate it | Warning sign |
|---|---|---|
| Occupancy | Children enrolled ÷ places available | Places you staff but cannot fill |
| Staff cost ratio | Staff costs ÷ fee revenue | Hiring ahead of enrolment |
| Fee revenue per child | Full fees ÷ average enrolment | Discounts or a shifting age mix |
| Overdue fees | Parent balances over 60 days | Collection problems |
| Unmatched subsidy | ECDA subsidy billed but not received | Rejected or missing claims |
Our management accounts report these KPIs by centre every month.
Childcare Centre Compliance Calendar
A childcare company pays corporate tax at 17% on chargeable income after the partial tax exemption (75% of the first $10,000 and 50% of the next $190,000), or the start-up exemption in its first three YAs (see the FAQ). Revenue expenses incurred within one year before you are deemed to start business are deductible, so keep pre-opening invoices. Most companies with revenue of $5 million or less can file Form C-S.
For a company with a 31 December year end (financial year 2026, YA 2027):
| When | What |
|---|---|
| Monthly, by the 14th | Previous month's CPF and SDL |
| Monthly, on the 17th (or the next working day) | Foreign worker levy deducted by GIRO |
| One month after each GST quarter | GST F5 and payment |
| 1 March 2027 | Form IR8A data through the Auto-Inclusion Scheme |
| 31 March 2027 | Estimated Chargeable Income, unless revenue is $5 million or less and ECI is nil |
| 30 June 2027 | AGM, unless exempt, for example by sending financial statements to members by 31 May |
| 31 July 2027 | Annual return to ACRA |
| 30 November 2027 | Form C-S, Form C-S (Lite) or Form C |
| As ECDA requires | Licence, enrolment and subsidy transactions in the Centre Management System |
Common Childcare Centre Accounting Mistakes in Singapore
- Booking only what parents pay, which understates revenue, GST and turnover.
- Treating advance fees and deposits as income when the cash arrives.
- Leaving ECDA subsidies unreconciled, so unpaid months go unnoticed.
- Taxing every grant, or none. Capital grants and the CIT Rebate Cash Grant are not taxable; operating grants are.
- Claiming deductions or input tax on grant-funded renovation, or section 14N on structural works.
- Paying CPF late, which costs interest and can cost you wage credits.
- Taking fees or deposits before the licence is issued, which ECDA prohibits.
When Should a Preschool Get Professional Help?
You may not need ongoing help if you run one centre clearly below the GST threshold on full fees and already reconcile fees, subsidies and deposits every month; annual accounts and a tax return may be enough. Get advice before you cross $1 million, open a second centre, join the Partner Operator scheme or commit to a large fit-out.
Tax Filing SG is run by ex-Big 4 Singapore Chartered Accountants (ISCA members). We can keep the books monthly, file GST and run payroll; see our accounting services, and we quote once we have reviewed your centre's records.
Frequently Asked Questions
Do preschools need an audit?
Not always. A private preschool company is exempt if, for each of its past two financial years, it meets two of three tests: revenue of $10 million or less, total assets of $10 million or less, and 50 or fewer full-time employees. In a group, the group must pass too. Shareholders with at least 5% of the shares can still require an audit, and a lender or funder may ask for one.
Can a preschool collect fees or deposits before its licence is issued?
No. ECDA states that preschools must not advertise, commence operations or accept monetary payments without holding a valid licence. ECDA aims to process a new licence application within 14 working days, counted from the later of a complete application and meeting all requirements at the site visit, so build that time into your opening plan.
Can a new childcare centre company claim the start-up tax exemption?
Yes, if it is incorporated and tax resident in Singapore and, throughout the basis period, has no more than 20 shareholders who are all individuals or include an individual holding at least 10%. The exemption covers 75% of the first $100,000 and 50% of the next $100,000 of chargeable income in its first three YAs, and a YA before the centre opens still uses one up.
Is the SME Cash Grant 2026 taxable for a childcare centre?
Yes. The SME Cash Grant 2026, paid from 2 November 2026 at $500 per local employee up to $2,500, is taxable and must be declared in Form C-S or Form C. Only employees whose CPF was paid on time count. The $2,000 CIT Rebate Cash Grant is different: it is not taxable, so exclude it from taxable income.
How long must a childcare centre keep its records?
At least five years from the relevant Year of Assessment. Keep enrolment and billing records, ECDA subsidy statements, grant letters, payroll and CPF records, and renovation invoices with the itemised list of works. If records are inadequate, IRAS can estimate your income, disallow claims, including GST input tax, and impose penalties of up to $5,000.
Official Sources
- IRAS: Provision of subsidised services (childcare subsidies)
- IRAS: Receiving grants
- IRAS: Do I need to register for GST?
- IRAS: Taxable and non-taxable income
- IRAS e-Tax Guide: Renovation or refurbishment deduction (PDF)
- ECDA: Infant and Childcare Subsidy Scheme
- Accounting Standards Committee: SFRS for Small Entities
- ACRA: Audit exemptions
Want your centre's fees, subsidies and GST set up properly?
Send us your fee schedule and latest accounts on WhatsApp, and a Singapore Chartered Accountant will tell you what needs to be filed and our fee for your case before you commit.
About Tax Filing SG — We are a Singapore accounting practice run by ex-Big 4 Singapore Chartered Accountants (ISCA). We handle accounting, corporate tax, GST and company secretarial work for Singapore SMEs, including overdue and late filings.
Last updated: 9 November 2026. This article is general information based on IRAS and ACRA guidance as at November 2026, not advice for your specific situation. Rules, rates and deadlines change, so check the official sources above or speak to us before acting.