How to Start a Daycare in California

Last updated: February 23, 2026

Starting a daycare in California means meeting some of the strictest child care licensing requirements in the country. The state’s Department of Social Services (CDSS) oversees all child care licensing through its Community Care Licensing Division (CCL), and the process involves background checks, mandatory training hours, facility inspections, and ongoing compliance with detailed staff-to-child ratios under Title 22 of the California Code of Regulations.

California also has unique business formation costs to plan for, including an $800/year franchise tax (though first-year LLCs are exempt) and capacity-based licensing fees for child care centers that can run over $1,000 for larger operations. This guide covers every requirement, cost, and step to legally start and operate a daycare in California, whether you’re opening a small family child care home or a full child care center.

Daycare Requirements in California at a Glance

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

Step 1: Choose Your Daycare Type

California’s CDSS recognizes three categories of licensed child care operations, each with different capacity limits, staffing requirements, and fees:

• Small Family Child Care Home (FCCH): Cares for 1-8 children in the operator’s own residence. Application fee: $73, annual renewal: $73, orientation fee: $25. This is the most common entry point for new daycare operators.
• Large Family Child Care Home: Cares for 7-14 children in a residence. Requires at least one assistant at all times. Application fee: $140, annual renewal: $140, orientation fee: $25.
• Child Care Center: Typically serves 15+ children in a commercial location. Fees are based on licensed capacity (see table below). Orientation fee: $50.

Child Care Center Licensing Fees by Capacity

Source: CDSS Community Care Licensing Fees

Your choice determines your licensing path, facility requirements, staffing obligations, and startup costs. Small family child care homes have the lowest barrier to entry, while child care centers require significantly more capital but offer greater capacity and revenue potential.

Step 2: Form Your California LLC

File your Articles of Organization online at bizfile Online (California Secretary of State). Filing fee: $70. You must also file a Statement of Information (Form LLC-12) within 90 days for $20.

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 California Registered Agent (called “agent for service of process”) with a physical street address in the state – you can serve as your own agent if you have a California address.

Franchise tax: California imposes an $800 annual franchise tax on all LLCs, due by the 15th day of the 4th month after your LLC is formed (and annually by April 15 after that). However, first-year LLCs are exempt from this tax, giving you a full year before it kicks in.

If you want to operate under a different name (e.g., “Sunshine Kids Academy” instead of “Sunshine Kids Academy LLC”), file a Fictitious Business Name Statement with your 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, hire employees, and file federal taxes.

Step 4: Complete Live Scan Background Checks

California requires Live Scan fingerprinting for all individuals who will have contact with children in your daycare. This is one of the most comprehensive background check processes in the country.

• Who must be screened: All owners, operators, employees, volunteers, and household members (for home-based operations)
• Databases checked: California Department of Justice (DOJ), FBI, and the Child Abuse Central Index (CACI)
• Cost: Approximately $70-$100 per person (DOJ fee + FBI fee + rolling fee)
• Processing time: DOJ results typically return in 1-3 days; FBI results can take 2-4 weeks
• Disqualifying offenses: Certain criminal convictions permanently disqualify individuals from working in child care under California Health and Safety Code

Important: No individual may have unsupervised access to children until their background check is fully cleared. Live Scan results are sent directly to CDSS – you cannot begin operating until all clearances are received. Do not delay this step.

Step 5: Complete Required Training

15-Hour Health and Safety Training

All child care providers and staff must complete 15 hours of health and safety training before they begin working with children. This is not optional and cannot be completed after starting work.

• Topics covered: Pediatric CPR, pediatric first aid, nutrition, childhood illness prevention, safe sleep practices, child abuse identification and reporting
• Cost: ~$50-$200 through approved providers
• Must be completed before working with children

16-Hour Preventive Health Care Training (Operators)

Daycare operators (licensees) must complete 16 hours of preventive health care training covering child health, safety, and disease prevention.

• Cost: ~$75-$200
• Required for license application

Pediatric CPR / First Aid Certification

Pediatric CPR and First Aid certification is required, and at least one trained person must be on-site at all times while children are in care.

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

Infant/Toddler Staff – College Coursework

Staff working with infants and toddlers must complete a 3-unit college course in infant/toddler child development. This is a more rigorous requirement than most states impose and is designed to ensure caregivers understand the unique developmental needs of children under age 3.

Step 6: Attend CDSS Licensing Orientation

Before submitting your license application, you must attend a mandatory licensing orientation session conducted by the Community Care Licensing Division.

• Orientation fee: $25 (family child care homes) or $50 (child care centers)
• What to expect: Overview of licensing regulations, application process, inspection requirements, and ongoing compliance obligations
• Schedule: Contact your regional CCL office for session dates

Step 7: Prepare Your Facility

California has specific space, safety, and equipment requirements for child care operations under Title 22. Ensure your location meets these standards before applying for your license:

Space Requirements

• Indoor space: Minimum 35 square feet per child of usable floor space
• Outdoor play area: Minimum 75 square feet per child (must be adjacent to facility or safely accessible)
• Napping area: Individual cots, mats, or cribs for each child; cribs for infants must meet current CPSC safety standards

Safety and Equipment

• Age-appropriate furniture and equipment
• Fenced outdoor play area with secure gates
• Working smoke detectors, carbon monoxide detectors, and fire extinguishers
• Childproofing (outlet covers, cabinet locks, safety gates as needed)
• Safe sleep environments for infants (firm mattress, no loose bedding)
• Secure storage for cleaning supplies, medications, and hazardous materials
• Posted emergency procedures and evacuation plan
• Telephone accessible at all times for emergency calls

Step 8: Pass Inspections and Apply for CDSS License

Submit your license application to the Community Care Licensing Division with all required documentation. Your facility must pass several inspections before the license is issued:

• Fire clearance: Required for all facility types. Contact your local fire department or the State Fire Marshal’s office.
• Health inspection: May be required depending on your county and whether you prepare and serve meals.
• CCL inspection: A licensing analyst from CDSS will inspect your facility for compliance with all Title 22 regulations.

Required documentation includes:

• Completed application form (LIC 200 series)
• Live Scan background clearance for all personnel and household members
• Training certificates (health and safety, preventive health care, CPR/First Aid)
• Fire clearance
• Proof of liability insurance
• Floor plan of the facility
• Zoning verification or use permit

Timeline: The full licensing process typically takes 3-6 months for family child care homes and 3-9 months for child care centers. Start your Live Scan fingerprinting and training early to avoid delays.

Step 9: Get Insurance

General Liability Insurance

California requires daycare operators to carry general liability insurance before a license is issued.

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

Workers’ Compensation Insurance

Workers’ compensation is mandatory in California for all employers – there are no exceptions based on the number of employees. Even if you have just one employee, you must carry workers’ comp coverage. This is stricter than many other states.

• Required from day one of hiring any employee
• Failure to carry workers’ comp is a criminal offense in California
• Sole proprietors and LLC members can elect to be excluded from coverage

Step 10: Get Local Permits and Open for Business

Depending on your city and county, you may need additional local permits before opening:

• Business license: Most California cities require a local business license or business tax certificate ($50-$300)
• Zoning approval: Confirm your location is zoned for child care use. Home-based family child care homes are generally protected under California law and cannot be prohibited by local zoning, but centers need commercial zoning.
• Building permit / Certificate of Occupancy: Required for center-based operations, especially if doing any construction or renovation
• Health department permits: May be required if you prepare and serve meals

Home-based operators: Under California Health and Safety Code Section 1597.40, a small family child care home that serves 8 or fewer children is considered a residential use of property and cannot be prohibited by local zoning ordinances. Large family child care homes (up to 14 children) also receive zoning protections but may need a use permit in some jurisdictions.

California Daycare Staff-to-Child Ratios (Title 22)

California mandates strict staff-to-child ratios under Title 22 of the California Code of Regulations. These include both an adult-to-child ratio (total adults present) and a teacher-to-child ratio (qualified teachers specifically):

Key points:

• These ratios must be maintained at all times, including during outdoor play, nap time, 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
• The “teacher” ratio refers to qualified, credentialed teachers – not just any adult in the room
• California’s infant ratio of 1:3 is among the strictest in the nation

Sales Tax: Child Care Is Exempt

Child care services are NOT subject to California sales tax. You do not need to collect or remit sales tax on tuition, registration fees, or child care service charges. This applies to all types of licensed child care operations in California.

Cost to Start a Daycare in California

Home-Based Family Child Care (1-14 Children)

Center-Based Child Care (30-75 Children)

Related California Business Guides

• Starting a Business in California: Complete Guide

← Back to all California business guides

Frequently Asked Questions

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

You need a license from the California Department of Social Services (CDSS), issued through the Community Care Licensing Division (CCL). There are three types: a Small Family Child Care Home license ($73/year) for 1-8 children, a Large Family Child Care Home license ($140/year) for 7-14 children with an assistant, or a Child Care Center license ($200-$1,000/year based on capacity) for larger operations. All require Live Scan background checks, mandatory training, and facility inspections.

What are California’s daycare staff-to-child ratios?

Under Title 22, California requires the following adult-to-child ratios: Infants (0-18 months): 1:3, Toddlers (18-36 months): 1:4, Preschool (3-5 years): 1:8, and School Age (K-14 years): 1:14. California also requires separate teacher-to-child ratios. For mixed age groups, the ratio for the youngest child in the group applies. These ratios must be maintained at all times.

What background checks are required for California daycares?

California requires Live Scan fingerprinting for all staff, volunteers, and household members. Fingerprints are checked against three databases: the California Department of Justice (DOJ), the FBI, and the Child Abuse Central Index (CACI). Cost is approximately $70-$100 per person. No individual may have unsupervised access to children until all clearances are received.

Is daycare taxable in California?

No. Child care services are exempt from California sales tax. You do not need to collect or remit sales tax on tuition, registration fees, or child care service charges.

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

A home-based family child care home typically costs $3,000-$15,000 to start, including licensing, background checks, training, insurance, and basic facility preparation. A center-based child care facility (30-75 children) typically costs $25,000-$120,000+ due to higher licensing fees, lease costs, build-out, commercial equipment, and staffing. California’s $800 annual franchise tax (waived the first year) adds to ongoing costs.

Do I need workers’ compensation insurance for a daycare in California?

Yes. Workers’ compensation insurance is mandatory in California for all employers, regardless of how many employees you have. Unlike states such as Texas and Florida, there is no minimum employee threshold – if you hire even one employee, you must carry workers’ comp. Failure to maintain coverage is a criminal offense in California.