Last updated: May 3, 2026

How to Start a Daycare in North Dakota (2026)

Three things make opening a child care program in North Dakota structurally different from most states. First, the state runs a monopolistic workers’ comp fund through Workforce Safety & Insurance (WSI) – private workers’ comp policies are illegal in ND, which means your insurance broker cannot quote you a price the way they would in 46 other states. Second, North Dakota uses a point-system for staffing math in Group and Center programs (each child counts as 0.05 to 0.25 points by age) on top of standard ratios, so the formula for “how many adults do I need today” is genuinely different from a flat ratio model. Third, Bright & Early ND – the state’s quality rating system – changed its bonus structure on January 1, 2026, so the old “Step 2 is enough” planning math no longer holds.

This guide compiles the specific North Dakota agency requirements, statutory citations, fee amounts, and 2026 program changes that apply to opening a child care business in North Dakota. The source agencies are the North Dakota Department of Health and Human Services (DHHS) Early Childhood Services Section, the North Dakota Secretary of State, the North Dakota Office of State Tax Commissioner, and Workforce Safety & Insurance (WSI). Nothing in this guide is a substitute for a phone call to your assigned DHHS licensor before you sign a lease.

North Dakota Daycare Requirements at a Glance

Requirement	Agency	Cost	Timeline
LLC Articles of Organization	ND Secretary of State FirstStop	$135	1-3 business days
LLC Annual Report	ND Secretary of State	$50/year (due Nov 15 for business LLCs; April 15 for farming/ranching LLCs)	Annual
Child Care License (Family / Group / Center)	DHHS Early Childhood Services	Licensing fee set by NDAC 75-03; plan review required	~60 days from complete application
Eight-source background check stack	DHHS / FBI / ND BCI / out-of-state agencies	Varies (~$40-$75 per person)	Required before unsupervised access
Pediatric First Aid + CPR/AED	Red Cross / AHA / equivalent	$50-$150 per person	Before licensure
Pre-service health & safety training	ND Growing Futures / DHHS-listed providers	Varies	Before licensure
WSI workers’ compensation policy	Workforce Safety & Insurance (monopolistic)	Premium varies by class code; no private market	Before first non-exempt employee
State withholding + UI account	ND Office of State Tax Commissioner (TAP) / Job Service ND	Free to register	Before first payroll
CCAP provider enrollment (optional)	DHHS Economic Assistance	Free; requires Bright & Early ND participation	2-4 weeks
Food Establishment License (if licensed for >30 children, non-residential)	DHHS Food and Lodging	Per fee schedule	Before opening
Local zoning approval / occupancy permit	City planning office (Fargo, Bismarck, Grand Forks, Minot, Williston, Dickinson, etc.)	Varies	Before opening

How to Start a Daycare in North Dakota (Step by Step)

Step 1: Pick the Right License Category Before You Sign a Lease

North Dakota has seven program categories under NDAC Title 75-03, and the category determines facility code, staffing math, training requirements, and inspection cadence. Get this wrong and you may need to relicense the program from scratch.

Category	Rule	Capacity	Typical Setting
Self-Declaration Provider	NDAC 75-03-07.1	5 or fewer children, no more than 3 under 24 months	Home, very small
In-Home Child Care	NDAC 75-03-07	Limited to one related family’s children	Nanny-style
Family Child Care	NDAC 75-03-08	Up to 7 children plus 2 school-age	Provider’s home
Group Child Care	NDAC 75-03-09	Up to 30 children depending on local ordinance	Larger home or facility
Child Care Center	NDAC 75-03-10	19 or more children	Commercial facility
Preschool	NDAC 75-03-11	Per program design	3-5 year-olds, school-day
School-Age Child Care Program	NDAC 75-03-11.1	Per program design	Before/after school

Self-Declaration is not a license – it is an exemption status for very small home programs. If you intend to take more than 5 children, or more than 3 children under 24 months, you have crossed the licensing threshold and Self-Declaration no longer applies. Many North Dakota providers start as Family Child Care because the math works in a typical home, then transition to Group Child Care once they hire a second adult.

Family Child Care Capacity Math

A Family Child Care license under NDAC 75-03-08 lets you care for up to 7 children plus 2 school-age children, with two age-mix options:

• Up to 3 children under 24 months plus older children, plus 2 school-age
• OR up to 4 children under 24 months plus 2 school-age

The provider’s own children under age 12 must be counted in the total. This is a frequent surprise for new providers – your two preschoolers and one toddler at home count against your licensed capacity before you take the first paying child.

Step 2: Run the Eight-Source Background Check Stack on Every Adult

North Dakota’s child care background check requirement is one of the more comprehensive in the country. Every prospective staff member, every household member of an in-home program age 18+, and every unsupervised volunteer must clear eight separate sources before having unsupervised access to children:

1. FBI fingerprint criminal history check (national)
2. National Sex Offender Registry search
3. North Dakota state criminal history check through the ND Bureau of Criminal Investigation
4. North Dakota Sex Offender Registry search
5. North Dakota Child Abuse and Neglect Registry check
6. Out-of-state criminal history for each state of residence in the past 5 years
7. Out-of-state sex offender registry for each state of residence in the past 5 years
8. Out-of-state child abuse and neglect registry for each state of residence in the past 5 years

If your hire lived in Minnesota two years ago, you need MN’s three checks too. Allow 4-8 weeks for the slowest out-of-state state to respond. Do not let an applicant work unsupervised with children before all eight letters arrive – DHHS treats provisional access as a violation, and you cannot bill CCAP for hours worked before clearance.

Step 3: Complete Pre-Licensing Training and First Aid

Family and Group child care applicants must complete pre-service health and safety training listed by Early Childhood Services. Center staff complete an equivalent orientation curriculum within timelines set in NDAC 75-03-10. The required topics include shaken baby syndrome prevention, safe sleep practices, allergic reactions, emergency preparedness, recognition of child abuse, and SIDS prevention.

Pediatric First Aid, CPR, and AED certification is required for at least one staff member on duty at all times, and most programs train every staff member because of split shifts. Budget $50-$150 per person through the Red Cross, American Heart Association, or an equivalent provider.

North Dakota Growing Futures at ndgrowingfutures.org is the state’s professional development registry. Every staff member should have a Growing Futures profile from day one – it tracks training hours toward Bright & Early ND quality steps and supplies your annual ongoing professional development verification at re-licensure.

Step 4: Submit the Application Through the CCL System

DHHS Early Childhood Services accepts new applications, license amendments, plan reviews, and provider self-reports through the Child Care Licensing (CCL) System at hhs.nd.gov. Required attachments typically include:

• Floor plan with room labels, sleeping areas, and exits
• Outdoor play area sketch with fence and surface description
• Emergency preparedness procedures (fire, tornado, lockdown)
• Staff roster with hire dates, position, and Growing Futures IDs
• Background check authorization for each staff and household member
• Training certificates (First Aid, CPR, pre-service health and safety)
• Local zoning verification or occupancy permit
• Articles of Organization or other entity formation document
• Proof of liability insurance (and WSI account if you employ non-exempt staff)

Submit at least 60 days before your planned open date. The licensor will schedule the on-site visit after a complete application clears intake review.

Step 5: Pass the On-Site Licensing Inspection

An Early Childhood Services licensor inspects the facility for compliance with the applicable NDAC chapter. Common inspection focus areas:

• Square footage: Indoor activity space and outdoor play area minimums set in your category’s rule
• Exits and egress: Two exits from each program room; clear path; functional locks
• Water temperature: Children’s hand-wash sinks at safe temperature
• Sleep equipment: Bare cribs/cots/mats with safe-sleep arrangement; no loose bedding for infants
• Outdoor area: Fenced; impact-attenuating surface under fall zones
• Food prep: If you serve meals, three-compartment sink or commercial dishwasher; food storage
• Medication storage: Locked, separate from food
• Posted documents: License, evacuation plan, daily schedule, parent grievance procedure

Programs licensed for more than 30 children at non-residential sites also need a separate Food Establishment License from DHHS Food and Lodging. Plan that timeline in parallel.

Step 6: Buy WSI Workers’ Compensation – the State’s Monopolistic Fund

North Dakota is one of four monopolistic workers’ comp states (with Ohio, Washington, and Wyoming). Private workers’ comp insurance is not legal in ND. All coverage flows through Workforce Safety & Insurance (WSI) at workforcesafety.com. This affects your daycare in three concrete ways:

1. You cannot shop for coverage. Your broker has nothing to quote. The WSI rate is the WSI rate.
2. Open the account before your first non-exempt hire. Sole proprietors, business partners, and corporate officers are exempt from the requirement; almost everyone else (including most family members on payroll) is not.
3. Operating without coverage triggers a stop-work order plus a $10,000 one-time penalty and $100 per uninsured day. Using uninsured subcontractors triggers a $5,000 fine plus $100 per day.

WSI uses NCCI class codes for premium calculation. Most child care programs fall under class code 9059 (Day Care Center). Premium per $100 of payroll varies year over year – check the current rate when you open the account.

Step 7: Decide Your CCAP and Bright & Early ND Path

The Child Care Assistance Program (CCAP) is North Dakota’s child care subsidy. It covers eligible working families’ children from birth through age 12 (effective April 1, 2026). For most programs in Fargo, Bismarck, Grand Forks, Williston, or Minot, CCAP is a meaningful share of revenue – roughly 15-30% of full-time slots in many centers. Choosing whether to enroll changes your business model.

CCAP 2026 Provider Reimbursement (Maximum Monthly Rates)

Provider Type	Infant	Toddler	Preschool	School-Age
Center	$1,240	~$1,100	~$950	$800
Licensed Family / Group	$900	~$830	~$760	$700
Self-Declared / Tribal	$646	~$610	~$565	$529

Infant and toddler rates are pegged to the 75th percentile of the market rate; preschool, school-age, and part-time rates are at the 50th percentile.

Bright & Early ND – The 2026 Bonus Cliff

Bright & Early ND is North Dakota’s quality rating and improvement system (QRIS). Steps 1 through 4 reflect program quality. CCAP-enrolled providers must participate. The economic relevance changed January 1, 2026: only Step 3 and Step 4 providers receive quality bonuses, at 5% and 10% of CCAP revenue respectively. Step 1 and Step 2 providers no longer receive a bonus, even though they remain CCAP-eligible.

This makes Step 3 the practical economic floor for any new daycare betting on CCAP cash flow. A CCAP-heavy infant room generating $30,000/month at Step 3 brings $1,500 in monthly bonus on top of base reimbursement; the same room at Step 2 brings nothing. Plan your quality investment – documented curriculum, staff credentials, environment rating – to clear Step 3 within your first license year.

Step 2+ programs that meet specific criteria also receive a flat-rate infant and toddler bonus of $200 per infant and $115 per toddler per month. This bonus survived the January 2026 changes for now.

Step 8: Form Your LLC and Register for Taxes

File Articles of Organization on the ND Secretary of State FirstStop portal for $135. ND requires a registered agent with a physical North Dakota address. Your LLC’s annual report is $50, due November 15 each year for business LLCs; first annual report is due in the calendar year after your LLC was approved (so an LLC formed in March 2026 owes its first annual report November 15, 2027).

Get your free federal EIN at irs.gov, then register with the ND Office of State Tax Commissioner at tap.nd.gov for any state withholding (you will withhold North Dakota income tax from employee wages) and with Job Service North Dakota for unemployment insurance. North Dakota’s 2026 individual income tax brackets are 1.95% on the first $48,475 of single income (up to $80,975 MFJ) and 2.50% on income above $244,825 single (above $298,075 MFJ) – among the lowest top-bracket state PIT rates in the country.

Tuition revenue from licensed child care programs is exempt from North Dakota sales tax. However, items you sell on the side (T-shirts, parent enrichment kits, paid summer field trips beyond the licensed program) may be taxable – check with the ND Office of State Tax Commissioner if you build a side revenue stream.

The Point System: How Group and Center Staffing Math Actually Works

This is the structural quirk that catches most operators by surprise. North Dakota Group Child Care and Center programs use a point system on top of standard adult-to-child ratios. Each child is assigned a point value by age:

Age	Points per Child
0-17 months	0.25
18-35 months	0.20
3 years	0.14
4 years	0.10
5 years	0.08
6-12 years	0.05

One adult can supervise children totaling up to 1.34 points, with a hard cap of 4 children under 18 months per provider. Above 1.34 points, you add another adult for every additional 1.0 points.

Worked example: a Group room with 2 infants (0.50), 4 toddlers (0.80), and 3 three-year-olds (0.42) totals 1.72 points. That requires two adults. A center adding a fourth infant would push to 1.97 points and still need only two adults, but the under-18-months cap of 4 per adult kicks in – you would need a second qualified adult assigned to the infants specifically.

The standard center adult-to-child ratios and group size limits still apply alongside the point system:

Age	Adult:Child	Max Group Size
0-17 months	1:4	10
18-35 months	1:5	15
3 years	1:7	20
4 years	1:10	25
5 years	1:12	30
6-12 years	1:20	40

You must satisfy both the point math and the ratio rule. Whichever requires more staff governs. In mixed-age groups, the youngest child’s ratio applies if children under 18 months are present.

City and County Variations

North Dakota has no major metro – Fargo at roughly 125,000 is the largest city, with Bismarck (capital), Grand Forks, Minot, West Fargo, Williston, Mandan, and Dickinson rounding out the top tier. Local rules are mostly about zoning, occupancy, and fire code rather than separate child care licensing.

• Fargo / West Fargo (Cass County): Fargo Cass Public Health is a delegated agent for some DHHS food licensing. NDSU drives consistent demand from student-parents and graduate-student families; West Fargo is among the fastest-growing North Dakota cities by household.
• Bismarck (Burleigh County): State capital; large state-government and healthcare workforce stable through economic cycles. Custer District Health Unit administers food licensing in some surrounding counties.
• Grand Forks (Grand Forks County): University of North Dakota and Grand Forks Air Force Base. Military-heavy demand – parents move frequently, so retention churn is higher than civilian-economy markets.
• Minot (Ward County): Minot Air Force Base creates concentrated demand for non-traditional-hour care; consider whether your program will serve 24-hour shift workers.
• Williston / Dickinson (Williams / Stark Counties): Bakken oil-economy markets. Demand surges with oil prices. Williston had explosive child care demand during the 2010-2015 boom and again from late 2021 onward; supply is structurally short. Boom/bust population dynamics make long-lease facility decisions risky.

North Dakota Daycare Market: Where the Demand Is

North Dakota’s child care supply has been net-short for over a decade. Demand drivers:

• Bakken oil-field economy in western ND drives concentrated, well-paid demand around Williston and Dickinson. Workforce age 25-40 with kids and household incomes above the state median creates strong pricing power for centers and family providers near oil-services hubs.
• Three Air Force bases (Grand Forks AFB, Minot AFB) and military-affiliated work create above-average demand for non-traditional-hours and weekend care. Few programs serve true 24-hour shifts.
• Agriculture-driven seasonal demand in the Red River Valley and Devils Lake basin – planting and harvest cycles produce predictable spikes for school-age summer programs.
• Health-care employer growth in Fargo (Sanford Health, Essentia Health) and Bismarck (CHI St. Alexius, Sanford) sustains baseline center demand from shift-worker parents.
• NDSU and UND draw graduate-student families. University child-care waiting lists feed surrounding private programs.

The structural under-supply is real – state-funded child care expansion grants in 2023-2025 directly subsidized facility build-out in critical-shortage regions. Check the DHHS Early Childhood Services grants page for current programs before you raise startup capital.

Cost to Start a Daycare in North Dakota

Cost Item	Family Child Care (Home)	Group Child Care	Center (40-child)
LLC formation + first annual report	$135 + $50	$135 + $50	$135 + $50
Background check stack (per adult)	$40-$75 × 1-2	$40-$75 × 3-4	$40-$75 × 8-12
First Aid / CPR / AED training	$100-$150	$300-$600	$800-$1,800
Pre-service health & safety training	$50-$200	$200-$600	$400-$1,200
Facility rent (commercial; first month + deposit)	n/a (home)	$3,000-$6,000	$6,000-$15,000
Build-out / playground / fencing	$1,000-$3,000	$10,000-$30,000	$50,000-$150,000+
Cribs, cots, furniture, supplies	$1,500-$3,000	$5,000-$12,000	$15,000-$40,000
Liability insurance (annual)	$500-$900	$1,200-$2,500	$3,500-$7,500
WSI workers’ comp deposit (if employees)	varies	$500-$1,500	$2,000-$6,000
Working capital (3 months operating)	$3,000-$5,000	$15,000-$30,000	$60,000-$100,000
Total estimated startup	$6,500-$13,000	$35,000-$80,000	$140,000-$320,000+

Center startup costs swing widely based on whether you build in a Bakken-region market (premium construction labor) or take over an existing licensed facility (build-out cost drops by half or more). Family Child Care in your existing home is by far the lowest-capital path into the industry.

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Frequently Asked Questions

Do I need a license to watch 4 children in my home in North Dakota?

You may operate as a Self-Declaration provider without a license if you care for 5 or fewer children, with no more than 3 of them under 24 months. Your own children under age 12 count toward both totals. The moment you exceed those caps – 6 children, or 4 children under 24 months – you have crossed the licensing threshold under NDCC chapter 50-11.1 and must hold a Family Child Care or higher license. Self-Declaration providers are still eligible to be paid through CCAP at the lowest rate tier ($646/month for infant care in 2026).

Why does North Dakota workers’ comp work differently than other states?

North Dakota is one of four monopolistic workers’ comp states (along with Ohio, Washington, and Wyoming). Private workers’ compensation policies are not permitted – all coverage flows through Workforce Safety & Insurance (WSI), the state fund. You cannot get a quote from a private carrier; you cannot shop the market; the WSI rate is the rate. The trade-off is that WSI must cover any eligible North Dakota employer, including high-risk industries that struggle to find coverage in competitive markets. Operating without WSI coverage triggers a stop-work order plus a one-time $10,000 penalty and $100 per uninsured day.

What are the staff-to-child ratios for daycare centers in North Dakota?

North Dakota Child Care Centers must follow ratio AND group size limits: 1:4 (max 10) for 0-17 months, 1:5 (max 15) for 18-35 months, 1:7 (max 20) for 3-year-olds, 1:10 (max 25) for 4-year-olds, 1:12 (max 30) for 5-year-olds, and 1:20 (max 40) for 6-12 year-olds. On top of the ratios, Group Child Care and Centers also use a point system – each child counts as 0.05 to 0.25 points by age, and one adult tops out at 1.34 points with a hard cap of 4 children under 18 months. You must satisfy both the point math and the ratio rule.

Do CCAP rates apply across all North Dakota providers?

Yes, CCAP maximum reimbursement rates are statewide and tier by provider type. Center rates run from $1,240/month for infants down to $800 for school-age children (effective January 1, 2026). Licensed Family or Group home rates are about $300-$340 lower per slot, and Self-Declared providers receive about $250-$600 less than licensed providers. Effective January 2026, only Step 3 (5%) and Step 4 (10%) Bright & Early ND providers receive the quality bonus on top of the base rate. Step 1 and Step 2 programs no longer receive the bonus, which makes Step 3 the practical economic floor for CCAP-heavy programs.

What is Bright & Early ND and do I have to participate?

Bright & Early ND is North Dakota’s Quality Rating and Improvement System (QRIS). Participation is voluntary in general but required for any provider accepting CCAP subsidy. The system rates programs from Step 1 to Step 4 based on staff qualifications, environment, curriculum, family engagement, and program management. The economic relevance changed January 1, 2026: only Step 3 and Step 4 providers receive CCAP quality bonuses (5% and 10%, respectively). If you accept CCAP and target meaningful margin, build your launch plan to hit Step 3 within your first license year – the documentation and staff credentials needed are real lift but routine for a well-organized program.

How long does it take to get licensed in North Dakota?

Plan on roughly 60 days from a complete application to receiving your license, assuming the on-site inspection passes the first time. Background checks for staff who lived in another state in the past 5 years can stretch to 8-10 weeks because the slowest out-of-state agency sets the pace. Programs licensed for more than 30 children at non-residential sites also need a Food Establishment License from DHHS Food and Lodging, which adds another 30-day plan-review window. Submit your DHHS application at least 60 days before your planned open date, and start out-of-state background checks the week you offer the first job.

What is the income tax rate I have to withhold from my employees in North Dakota?

North Dakota’s 2026 individual income tax has two brackets: 1.95% on the first $48,475 of single income (or $80,975 MFJ), and 2.50% on income above $244,825 single ($298,075 MFJ). Standard deductions are $16,100 single and $32,200 MFJ. North Dakota has among the lowest top-bracket state PIT rates in the United States – tied with Arizona at 2.50%. You withhold using the ND Office of State Tax Commissioner’s withholding tables published in the 2026 Income Tax Withholding Rates Booklet. Register your withholding account at tap.nd.gov before your first payroll run.

Are daycare services taxable under North Dakota sales tax?

No – tuition revenue from licensed child care programs is exempt from North Dakota sales tax. However, related side revenue may be taxable: branded merchandise (T-shirts, water bottles), books or curriculum kits sold to parents, and some paid enrichment activities outside the licensed program scope can fall inside the 5% state sales tax (plus local rates of up to 3% in Fargo, Bismarck, Grand Forks, and other cities). If you build any side revenue stream beyond tuition, contact the ND Office of State Tax Commissioner at tax.nd.gov to verify the taxability before launch.