Tips for Creating a Home Daycare Contract

One of the most important things you can do when starting a home daycare is create a solid contract and policy handbook (or combine them into one document, as I do). Your home daycare contract clearly outlines your rules, policies, and expectations for families, helping you attract clients who are a good fit for your program from the very beginning.

Without a written contract, you’re leaving your business vulnerable to misunderstandings, payment disputes, and countless avoidable headaches.

Creating a Home Daycare Contract

Your contract sets the foundation for how you want to run your daycare. It communicates your expectations to families and helps ensure everyone is on the same page before care even begins. Just as importantly, it protects both you and your business by creating a legally binding agreement between you and your clients.

Whether you’re dealing with late payments, repeated late pick-ups, sick children arriving at daycare, or a family leaving without notice, having everything clearly documented makes these situations much easier to handle. That’s why it’s worth investing the time to create a thorough, well-thought-out contract.

Questions to Consider When Writing Your Contract

Before you start writing, think about how you want your business to operate.

• What hours will you work? Will you offer open hours or contracted hours for each family?
• How will tuition be paid? Weekly, bi-weekly, or monthly? I highly recommend requiring payment before care to ensure you’re paid for your services and to discourage daycare hopping.
• Will you charge late fees for overdue tuition or late pick-ups?
• What is your policy for holidays and vacation time? Will your closures be paid or unpaid? What happens when families take vacations? Will they still be responsible for tuition? (My answer is yes!)
• What illnesses or symptoms will require children to stay home? How quickly must parents pick up a sick child? Can children return the next day, or do they need to be symptom-free for 24 hours?
• How much notice is required if a family decides to leave your program? Two weeks? Four weeks?

Taking the time to answer these questions now will save you countless conversations—and frustrations—later.

Should Your Contract and Handbook Be Separate?

My contract is about six pages long (seven if you include my authorization forms for transportation, sunscreen, photos, and similar permissions). I chose to combine my contract and policy handbook into one document.

Some providers prefer having two separate documents: a contract that covers the financial and enrollment details, and a parent handbook that contains all of the daycare policies.

I actually started out that way, but I found that parents carefully read the contract while skimming—or completely ignoring—the handbook. That meant I was constantly repeating the same policies during the year.

Combining everything into one document solved that problem. Since parents sign one agreement acknowledging they have read and understand all of my policies, I spend much less time explaining the same expectations over and over.

There’s no right or wrong approach. Both options work well as long as parents sign acknowledging they have read and agree to follow your policies. Choose the system that works best for you.

What My Home Daycare Contract Includes

I update my contract from time to time, but these are the sections I currently include:

• Terms (annual renewal, trial period, termination overview)
• Contracted Hours
• Tuition Rates
• Payment Schedule
• Late Payment Policies
• Late Pick-Up Fees
• Returned Check (NSF) Fees
• Hours of Operation
• Holiday and Vacation Closures
• Weather and Emergency Closures
• Absence Policy
• Illness Policy
• Medication Administration
• Medical Emergencies
• Arrival and Departure Procedures
• Authorized Pick-Up
• Discipline Policy
• House Rules
• General Policies and Information
• Supplies Parents Must Provide
• Potty Training Policy
• Birthday and Holiday Celebrations
• Meals and Snacks
• Nap and Rest Time
• Trial Adjustment Period
• Termination Policy
• Confidentiality
• Parent Acknowledgment and Signatures

The Most Important Section: Illness Policies

If I had to choose one section that gets referenced the most, it would be my illness policy.

This is the area that tends to be tested most often, so I make sure parents fully understand it before enrollment. During interviews, I always review this section in detail.

My illness policy covers:

• Symptoms that require children to stay home.
• Symptoms that require immediate pick-up.
• How long children must be symptom-free before returning.
• How quickly parents must arrive after being called.
• What happens if a parent cannot be reached.
• Medication administration procedures.
• Emergency contact expectations.

Illness is one policy I never negotiate. One sick child can quickly affect every child in my daycare—not to mention my own family.

Don’t Forget Your Vacation Policy

One policy I often see new providers overlook is vacation time.

Many providers feel guilty taking time off, but the reality is that running a home daycare is demanding work. Most of us work 10-hour days, five days a week, with very few real breaks. You deserve time to rest and recharge.

At the beginning of every year, my husband and I plan our vacations and personal days. Once those dates are finalized, I send every daycare family a calendar with all of my holiday closures and vacation days so they have plenty of notice. I also send reminders one month before and again one week before each closure.

Remember, your clients take vacations without feeling guilty—you shouldn’t feel guilty about taking yours, either.

Make Your Contract Work for You

There are plenty of sample home daycare contracts available online, and they can be a great starting point. You can even find a copy of the one I use in my store. Just remember that your contract should reflect your business, your policies, and your expectations.

Don’t be afraid to customize it. Add sections that are important to you, remove policies that don’t apply to your program, and update it as your business grows. Your contract should evolve right along with your daycare.

It’s your business, and you can run it how you want.  If a parent wants to negotiate or has issues with your policies, that’s a sign they are not a good fit for your program, and you both need to continue looking for someone who is a better fit.

What was a priority in your home daycare contract?

Find more in my How to Run a Home Daycare Series:
Avoiding Burnout for the Daycare Provider
Tips for Interviewing Clients
Pros & Cons of Starting a Home Daycare

Looking for more post about running a daycare? Check out my daycare page to learn about starting or running an in-home daycare or shop my collection of ebooks and daycare forms in my store.

Updated 2026