Fiscal Check-Up for Family Child Care Part 3: Time-Space Percentage – A Number Worth Knowing

A woman wearing glasses and a suit is smiling in front of a flag.

Sim Loh is a family partnership coordinator at Children’s Village, a nationally-accredited Keystone 4 STARS early learning and school-age enrichment program in Philadelphia, Pennsylvania, serving about 350 children. She supports children and families, including non-English speaking families of immigrant status, by ensuring equitable access to education, health, employment, and legal information and resources on a day-to-day basis. She is a member of the Children First Racial Equity Early Childhood Education Provider Council, a community member representative of Philadelphia School District Multilingual Advisory Council, and a board member of Historic Philadelphia.


Sim explains, “I ensure families know their rights and educate them on ways to speak up for themselves and request for interpretation/translation services. I share families’ stories and experiences with legislators and decision-makers so that their needs are understood. Attending Leadership Connections will help me strengthen and grow my skills in all domains by interacting with and hearing from experienced leaders in different positions. With newly acquired skills, I seek to learn about the systems level while paying close attention to the accessibility and barriers of different systems and resources and their impacts on young children and their families.”

This document may be printed, photocopied, and disseminated freely with attribution. All content is the property of the McCormick Center for Early Childhood Leadership.

Note: This resource is part of a series focused on fiscal check-ups for family child care providers. Read the rest of the series here: Part 1 | Part 2


Part 2 in this blog series, Fiscal Check-Up for Family Child Care Part 2: Tips for Tracking Actuals and Budgeting, briefly mentioned how you might use your Time-Space Percentage to determine the tax deduction allowed for the business use of your home. This blog addresses what Time-Space Percentage is and how it can be used.


If you are a family child care provider who cares for children in your home, then according to the National Association for Family Child Care (NAFCC), “The most important number in a family child care provider’s business is her Time-Space Percentage” (NAFCC, n.d.). Those of us who work with the Business Administration Scale for Family Child Care (BAS) tend to agree with that statement!


“What’s so great about Time-Space Percentage?” you might ask? For family child care providers operating programs in their home, the Time-Space Percentage is the percent of shared business and personal expenses that can be deducted on taxes as a business expense (Copeland, 2011). And more tax deductions mean more money saved. Because these family child care providers use their home for their business, they have the opportunity to calculate the percent of the year the home was used for business and the percent of the square footage of the home that was used for the business, resulting in their Time-Space Percentage—that number worth knowing (Copeland, 2011).


Once a provider has correctly calculated their Time-Space Percentage, they can then apply that percentage to a variety of shared business and personal expenses in order to claim tax deductions. For example, if a provider’s Time-Space Percentage is 33% she can deduct 33% off the shared personal and business expenses related to the business use of her home. This would mean 33% of her rent or mortgage interest would be deductible, 33% of her utilities would be deductible, 33% of home repairs, 33% of cleaning and laundry supplies she buys and then uses for both the business and personally, and 33% of furniture purchased for rooms used by both the provider and her family as well as the child care business could be deducted, you get the picture. In essence, Time-Space Percentage may boil down to a lot of money in tax deductions for providers. When it comes to calculating your own Time-Space Percentage, you will need to start with two important things: 1) records to substantiate purchases and time worked in the home and 2) a tax preparer with specialized knowledge about family child care (Talan & Bloom, 2018).


I also recommend checking out Tom Copeland’s blog posts on the subject (see the References below). As an attorney with decades of experience in the business of family child care, Tom walks you through the formula for calculating your Time-Space Percentage and what to look for in a tax preparer (Copeland, 2011; Copeland 2020).


If you would like to join a Community of Practice (CoP) of family child care providers to learn more about financial operations for family child care providers and many other business topics, attend the 7th Taking the Lead (TTL) leadership academy in Chicago, Illinois from October, 2020 – June 2021.


References


Copeland, T. (2020, February 24). Calculate Your Own Time-Space Percentage.
http://tomcopelandblog.com/calculate-your-own-time-space-percentage


Copeland, T. (2020, January 16). How to Find, Choose, and Work with a Tax Professional. Taking Care of Business. http://tomcopelandblog.com/how-to-find-choose-and-work-with-a-tax-professional-2


Copeland, T. (2011, January 27). Time-Space Percentage Quiz. Taking Care of Business. http://tomcopelandblog.com/the-time-space-percentage-quiz



National Association for Family Child Care (n.d) The Time-Space Percentage. National Association for Family Child Care. https://www.nafcc.org/Time-Space-Percentage


Talan, T. N. & Bloom, P. J. (2018). The Business Administration Scale for Family Child Care (2nd ed.). Teachers College Press.


Robyn Kelton, M.A., is a Quality Training Specialist for the McCormick Center for Early Childhood Leadership at National Louis University (NLU). Robyn conducts training and research on the Business Administration Scale for Family Child Care (BAS) and the Program Administration Scale (PAS) and serves as a national reliability anchor for both tools. In addition, Robyn reviews BAS and PAS assessments for the assessor certification system. Robyn holds a Bachelor of Arts degree in psychology from the University of Kansas and a Master of Arts degree in psychology with an advanced certificate of study in organizational psychology from NLU. Robyn is currently a doctoral student in the brain, behavior, and quantitative science psychology program at the University of Kansas. Prior to joining the McCormick Center, Robyn spent three years as a lead teacher in a kindergarten classroom for an after-school program. Robyn’s research interests include leadership in early care and education, family child care, child development, and autobiographical memory.

By Robyn Kelton, M.A. June 27, 2025
INTRODUCTION Turnover rates in child care are among the highest in education, with over 160,000 workforce openings predicted annually (Bassok et al., 2014; Doromal et al., 2022; Joughin, 2021; U.S. Bureau of Labor Statistics, 2025). While some turnover is expected and even necessary, the levels of turnover experienced in the field of early childhood education and care (ECEC) are not only alarmingly high but deeply problematic. In 2021, a national survey conducted by the National Association for the Education of Young Children found that over 80% of child care centers were experiencing a staffing shortage, with the majority of those programs reporting one-to-five open roles, but 15% reporting between six and 15 open roles (NAEYC, 2021). Staffing shortages result in lost revenue, financial uncertainty, and program instability, often forcing administrators to operate below capacity and/or under reduced hours (NAEYC, 2021; NAEYC, 2024; Zero to Three, 2024). Limited enrollment slots and classroom and program closures lead to increased waiting lists (Zero to Three, 2024; Carrazana, 2023). In turn, families are placed in a highly vulnerable position of needing to leave the workforce to stay home with their child or turn to potentially unsafe or unregulated child care. Moreover, increased turnover in classrooms interrupts continuity of care and disrupts the relationships built between children and their educators (Reidt-Parker, J., & Chainski, M. J. (2015). Research has begun to highlight some of the programmatic and personnel characteristics predictive of increased staff turnover in ECEC programs. Low wages are most commonly identified as a strong predictor of turnover (Amadon et al., 2023; Bryant et al., 2023; Fee, 2024; Guevara, 2022; Totenhagen et al., 2016). However, workforce advocates and some researchers have begun to expand conversations on compensation to explore the impact the profession’s general lack of benefits such as paid time off, access to health insurance, and retirement benefits has on retention (e.g., Amadon et al., 2023; Bryant et al., 2023; Fee, 2024; Lucas, 2023). While informative, this body of work has typically approached benefits as binary variables (i.e., have or do not have) rather than reflect the spectrum on which benefits are commonly offered (e.g., the number of days off, the percent of insurance covered by the employer, and levels of retirement matching funds). This Research Note aims to expand on previous work investigating the relationship between benefits and turnover by exploring the possibility of a more nuanced relationship between the variables to determine if the level of benefits offered impacts turnover rates. METHOD This study used data collected via formal Program Administration Scale, 3rd Edition (PAS-3) assessments conducted by Certified PAS-3 Assessors between 2023 and 2025. To become certified, PAS-3 assessors must first achieve reliability (a score of at least 86%) on a test conducted after four days of training on the tool. Next, they must conduct two PAS assessments within three months of reliability training. PAS-3 national anchors reviewed the completed assessments for consistency, accuracy, and completeness. The study analyzed data from 133 PAS-3 assessments collected during the certification process across 12 states, the District of Columbia, and the U.S. Mariana Islands.  Measures Data for this study were collected using the PAS-3, a valid and reliable tool used to measure and improve Whole Leadership practices in center-based programs (Talan, Bella, Jorde Bloom, 2022). The PAS-3 includes 25 items, each composed of 2-5 indicator strands and scored on a 7-point Likert scale (1 = inadequate, 3 = minimal, 5 = good, and 7 = excellent). Item scores are averaged to determine a mean PAS-3 score. Of particular interest to this study is Item 5: Benefits. Item 5 measures employee access to health insurance and considers what percentage of the cost is paid by the employer, the total number of paid time off days within the first and fifth years of employment, access to a retirement plan, and the percentage at which the employer will match the employee’s contribution. Last, Item 5 explores provisions made to cover the costs of staff’s professional development. Non-applicable is allowed as a response for indicators related to health insurance and retirement if there are no full-time staff employed by the program. Sample Program enrollment ranged in size from four children to 285, with a mean enrollment of 65 and a median of 55. Total program staff for the sample ranged from two to 44 staff, with an average of just under 14 staff (13.93) and a standard deviation of 8.80. Table 1 below provides a detailed breakdown of staff by role and full-time and part-time status.
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