What occupancy does your service actually need?
Rebecca Gunn. Business Manager September 2026
Most providers can tell you their occupancy without looking it up. Far fewer can tell you the number it has to beat.
That second number is break-even occupancy: the point where the fees coming in cover everything going out. Above it you have a surplus. Below it you are funding the service from somewhere else, and every week that continues makes the recovery harder and more expensive.
It is not a sector figure. It is specific to your service, and it moves when your fee moves, when your wages move, and when your opening hours change. A service at 75 per cent can be comfortably profitable. Another at 82 per cent can be losing money every week. Occupancy on its own does not tell you which one you are.
The arithmetic
Seven numbers get you there.
Licensed places. Days open per week. Weeks open per year. Average daily fee. Children attending on an average day. Weekly staff cost. All other weekly costs.
From those:
Weekly revenue is children attending, multiplied by your average daily fee, multiplied by days open.
Weekly costs are staff plus everything else. Rent, food, utilities, insurance, consumables, software, cleaning, maintenance, and the management or administration cost sitting above the service.
Break-even occupancy is weekly costs divided by the revenue you would earn at full capacity.
Worked through: a service with 100 licensed places open five days, charging an average of $145 a day, running at 76 attending children, brings in roughly $55,100 a week. At full capacity it would bring in $72,500. If total weekly costs are $49,300, break-even sits at about 68 per cent. That service is above water, but the gap between 68 and 76 is eight percentage points, which is eight children. Lose eight children and it is running at cost.
Worked example
100 licensed places, open five days, $145 average daily fee, 76 children attending, $49,300 total weekly costs.
That is the useful part. Not the percentage, but the number of children between you and zero.
Where this service sits
The lime band is the margin. Eight children wide. Everything to the left of the marker pays for the service before it pays the owner anything.
Why your number is not your neighbour's
Three things move break-even more than anything else.
Staff cost as a share of revenue. This is the lever. In the example above, staff at $33,000 a week is around 60 per cent of revenue. Every percentage point you move that figure moves break-even by roughly a point and a half. Nothing else on the cost line has that effect.
Your fee. A service charging $120 a day needs materially more children through the door than one charging $160 to cover the same cost base. Providers often benchmark occupancy against services nearby without checking whether those services charge what they charge.
Days and weeks open. A service open 51 weeks has a different break-even to one closing for two weeks over Christmas, even with identical costs, because the annual revenue base is different while most of the cost base is not.
What a single occupancy figure hides
Room level. A service at 75 per cent overall can be turning families away from the toddler room while the nursery sits at 60. Those are different problems with different fixes, and the headline number shows neither. We have walked into services where the owner was running enquiry campaigns to fill a centre that was already full in two rooms out of three.
Seasonality. One week is not the year. The January dip and the school-transition drop are predictable, and a break-even worked out in a strong week will flatter you.
Staff cost is not fixed. The arithmetic treats it as a constant, and it is not. It moves with occupancy as staffing shifts across the day. In practice your true break-even is usually a little lower than the calculation says, which is the one direction the error runs in your favour.
Not the percentage. The number of children between you and zero.
Free tool
Work out your own break-even
Seven numbers. Nothing is stored and we do not ask who you are. If you want the fuller version, the service health check takes eighteen numbers rather than seven, reads them room by room, and I write every one of those reports myself.
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