How to Start a Daycare in Texas

Last updated: February 23, 2026

Starting a daycare in Texas means working with one of the largest and most structured child care licensing systems in the country. The Texas Health and Human Services Commission (HHS) oversees all child care operations through its Child Care Regulation (CCR) division, and Texas offers four distinct operation types – from a small listed family home caring for a few children to a full licensed child care center with no set capacity limit. Every person who provides care must pass multiple background checks before they ever interact with a child.

This guide covers every requirement, cost, and step to legally start and operate a daycare in Texas, whether you’re opening a small home-based operation or a commercial child care center.

Daycare Requirements in Texas at a Glance

How to Start a Daycare in Texas (Step by Step)

Step 1: Choose Your Daycare Type

Texas HHS Child Care Regulation recognizes four categories of child care operations, each with different requirements, capacity limits, and inspection schedules:

• Listed Family Home: Cares for up to 3 unrelated children in the caregiver’s own home. Renewal fee: $20/year. Not routinely inspected by HHS. This is the simplest entry point for new daycare operators.
• Registered Child Care Home: Cares for up to 12 children in the caregiver’s home. Subject to unannounced inspections every 1-2 years. Offers more capacity than a listed home with moderate regulatory oversight.
• Licensed Child Care Home: Cares for 7-12 children in the caregiver’s home. Receives at least 1 unannounced inspection per year. Higher level of HHS oversight than a registered home.
• Licensed Child Care Center: No set maximum capacity – operates from a commercial facility. At least 1 unannounced inspection per year. Highest regulatory requirements but greatest revenue potential.

Your choice determines your licensing path, inspection frequency, staffing requirements, and startup costs. Listed family homes have the lowest barrier to entry, while licensed centers require significantly more capital and staffing but offer unlimited capacity.

Step 2: Form Your Texas LLC

File your Certificate of Formation online at SOSDirect. Total cost: $300. Processing takes 2-3 business days for online filings.

Your LLC name must include “LLC,” “L.L.C.,” or “Limited Liability Company” and must be distinguishable from existing entities on file. You’ll need a Texas Registered Agent with a physical street address in the state – you can serve as your own registered agent if you have a Texas address.

If you want to operate under a different name (e.g., “Bright Horizons Academy” instead of “Bright Horizons Academy LLC”), file an Assumed Name Certificate (Form 503) with the Secretary of State ($25) and with the county clerk.

Step 3: Get Your Federal EIN

Apply for a free Employer Identification Number at IRS.gov. You’ll receive it immediately when applying online. You need this to open a business bank account, and it’s required if you plan to hire employees.

Step 4: Complete Background Checks

Texas requires multiple background checks for every person who will provide care to children. All checks must be completed before that person provides any care.

• Texas DPS Criminal History Check: State-level criminal background check
• FBI Fingerprint Check: Federal criminal background check using fingerprints
• Central Registry Check: Texas child abuse and neglect registry maintained by DFPS
• Sex Offender Registry Check: National sex offender database screening

Who must be checked: All caregivers, directors, owners, and any person with unsupervised access to children. For home-based operations, household members age 14 and older must also be checked.

• Cost: Approximately $2 per background check plus fingerprint processing fees
• Critical rule: No person may provide care until all background check results are received and cleared

Important: Background checks in Texas are relatively inexpensive compared to other states, but the requirement that they be completed before a person begins working means you should start this process early to avoid staffing delays.

Step 5: Complete Required Training

Pre-Service Training (24 Clock Hours)

All child care employees must complete 24 clock hours of pre-service training covering child development, health and safety, and Texas minimum standards.

• Before counting in ratio: At least 8 hours must be completed before an employee can be counted toward staff-to-child ratios
• Course cost: ~$100-$300 (through HHS-approved providers)
• Delivery: Available online and in-person through approved providers

Director Qualifications

Directors of licensed child care centers and homes have additional requirements:

• Minimum qualification: 36 clock hours of training in child care and related topics
• Annual training: 30 hours per year (minimum 6 hours must be in child development)

Caregiver Annual Training

All caregivers must complete 24 hours of annual training each year to maintain their credentials.

CPR / First Aid Certification

Pediatric CPR and First Aid certification is required for all child care personnel.

• Cost: ~$40-$80 per person
• Must be pediatric-specific – adult-only certifications do not qualify
• Renewal: Typically every 2 years, depending on certifying organization

Step 6: Prepare Your Facility

Texas has specific space and safety requirements for child care operations. Ensure your location meets these standards before applying for your HHS permit or license:

Space and Safety Requirements

• Age-appropriate furniture and equipment
• Fenced outdoor play area with safe surfacing
• Working smoke detectors and fire extinguishers
• Childproofing (outlet covers, cabinet locks, safety gates as needed)
• Safe sleep environments for infants (if serving children under 1)
• Secure storage for cleaning supplies, medications, and hazardous materials
• Separate diaper-changing and food preparation areas

For Center-Based Facilities

• Commercial building must meet local building codes
• Certificate of Occupancy required
• Fire inspection from local Fire Marshal
• Adequate parking and safe drop-off/pick-up areas

Step 7: Pass Inspections

Texas HHS conducts inspections based on your operation type:

• Listed Family Homes: Not routinely inspected, but HHS may investigate complaints
• Registered Child Care Homes: Unannounced inspections every 1-2 years
• Licensed Child Care Homes: At least 1 unannounced inspection per year
• Licensed Child Care Centers: At least 1 unannounced inspection per year

Center-based facilities also need a fire inspection from the local Fire Marshal. Monthly fire drills are required and must be documented.

Inspection focus areas: Staff-to-child ratios, background check compliance, training records, facility safety, health and sanitation, record-keeping, and supervision practices.

Step 8: Apply for Your HHS Permit or License

Submit your application to Texas HHS Child Care Regulation at hhs.texas.gov.

Required documentation includes:

• Completed application form
• Background check clearance for all personnel
• Training certificates (pre-service hours, CPR/First Aid)
• Director qualification documentation (for licensed operations)
• Fire inspection report (for center-based facilities)
• Proof of liability insurance
• Zoning approval documentation
• Floor plan of the facility

Fees: Application fee is approximately $35 plus $1 per child capacity. Background checks are $2 per check.

Timeline: Listed family homes can be approved in 2-4 weeks. Registered homes take 4-8 weeks. Licensed homes and centers typically take 2-6 months depending on how quickly you complete all requirements.

Step 9: Get Local Permits and Zoning Approval

Texas doesn’t have a statewide business license, but many cities require local permits:

• City business permits: Check with your city clerk or licensing department. Major cities (Houston, Dallas, Austin, San Antonio, Fort Worth) have their own permit requirements.
• Zoning approval: Required before opening – confirm your location is zoned for child care use
• Home occupation permits: If operating from home, many Texas cities require a home occupation permit ($0-$100)
• Certificate of Occupancy: Required for center-based facilities operating in commercial spaces

Home-based daycare operators: Check your city’s home occupation ordinances. Some cities have specific rules for home-based child care, including parking requirements, signage restrictions, and drop-off/pick-up traffic limitations.

Step 10: Get Insurance

General Liability Insurance

Texas HHS requires daycare operators to carry general liability insurance. Coverage amounts vary by operation type and capacity.

• Home-based daycare: $400-$1,500/year
• Center-based daycare: $1,100-$4,000/year
• Important: Standard homeowner’s insurance does not cover business activities – you need a separate commercial policy or a specific child care endorsement

Workers’ Compensation Insurance

Texas is one of the few states where workers’ comp is optional for private employers. However, if you choose not to carry it (becoming a “non-subscriber”), you must:

• File DWC Form 005 with the Texas Department of Insurance annually
• Notify each employee in writing that you don’t carry workers’ comp
• Post a notice at the workplace
• Warning: Non-subscribers lose key legal defenses in employee injury lawsuits. We strongly recommend carrying coverage even though it’s not required.

Texas Daycare Staff-to-Child Ratios

Texas mandates strict staff-to-child ratios under Chapter 746 of the Texas Administrative Code. These ratios must be maintained at all times, including during outdoor play, field trips, and transitions:

Mixed age groups: When children of different ages are in the same group, the ratio for the youngest child in the group applies. Texas also enforces maximum group sizes – even if you have enough staff to meet the ratio, you cannot exceed the group size limit for that age.

Sales Tax: Child Care Is Exempt

Child care services are NOT subject to Texas sales tax. You do not need to collect or remit sales tax on tuition, enrollment fees, or child care service charges. This applies to all types of child care operations in Texas – listed homes, registered homes, licensed homes, and licensed centers.

Cost to Start a Daycare in Texas

Home-Based Child Care (Up to 12 Children)

Center-Based Licensed Child Care (25-75 Children)

Related Texas Business Guides

• Starting a Business in Texas: Complete Guide

← Back to all Texas business guides

Frequently Asked Questions

What license do I need to open a daycare in Texas?

You need a permit or license from the Texas Health and Human Services Commission (HHS) through its Child Care Regulation division. Texas offers four operation types: a Listed Family Home (up to 3 unrelated children, $20/year renewal), a Registered Child Care Home (up to 12 children), a Licensed Child Care Home (7-12 children with annual inspections), or a Licensed Child Care Center (no set maximum, commercial facility). Application fees are approximately $35 plus $1 per child capacity.

What are Texas daycare staff-to-child ratios?

Texas ratios under Chapter 746 are: 0-11 months: 1:4, 12-17 months: 1:5, 18-23 months: 1:9, 2 years: 1:11, 3 years: 1:15, 4 years: 1:18, 5+ years: 1:22, and school-age: 1:26. Texas also enforces maximum group sizes for each age range. For mixed age groups, the ratio for the youngest child applies.

What background checks are required for Texas daycare workers?

Texas requires four separate background checks for all child care personnel: a Texas DPS criminal history check, an FBI fingerprint check, a Central Registry (child abuse/neglect) check, and a Sex Offender Registry check. All checks must be completed before a person provides care. Cost is approximately $2 per check plus fingerprint processing fees.

Is daycare taxable in Texas?

No. Child care services are exempt from Texas sales tax. You do not need to collect or remit sales tax on tuition, enrollment fees, or child care service charges. This applies to all types of child care operations in Texas.

How much does it cost to start a daycare in Texas?

A home-based child care operation typically costs $2,600-$13,500 to start, including LLC formation, HHS licensing, background checks, training, insurance, and basic facility preparation. A center-based licensed child care facility (25-75 children) typically costs $18,000-$95,000+ due to lease costs, build-out, commercial equipment, and staffing.

How much training do Texas daycare workers need?

New caregivers must complete 24 clock hours of pre-service training, with at least 8 hours finished before being counted in staff-to-child ratios. Directors need a minimum of 36 clock hours of qualification training. Ongoing requirements are 30 hours per year for directors (at least 6 in child development) and 24 hours per year for caregivers. Pediatric CPR and First Aid certification is also required for all personnel.