How Much Does It Cost to Get a Daycare License

The licensing fee itself is the smallest part of the bill. TDHS charges between $100 and $200 depending on whether you open a family child care home or group home and whether you choose an annual, biennial, or triennial license term. The real costs are everything that has to be in place before that fee is due.

TDHS Licensing Fees

The triennial option saves money per year, but you pay the full amount upfront at Step 8 of the TDHS pre-licensure process.

Background Check Costs

Every operator, employee, substitute, and household resident aged 15 or older must undergo fingerprint-based screening through IdentoGo. The standard fee runs $32.65 to $48 per person, depending on the registration role.

The important detail: TDHS covers all fingerprinting and out-of-state background check fees for individuals registered under an active pre-licensure application. This coverage applies once per person per agency per year. If a fingerprint is rejected and needs resubmission, or if a second sample is submitted within 30 days, the agency pays the re-processing fee.

Start background checks early. Processing takes 3 to 10 business days, but out-of-state registry checks for anyone who lived outside Tennessee in the past five years can add 2 to 4 weeks.

Equipment and Safety Costs

These are the non-negotiable purchases TDHS inspectors will verify during the Step 9 and Step 10 walk-throughs:

• CPSC-compliant cribs or approved play yards for any infants in care — no bumper pads, soft bedding, or pillows. Plan $150 to $300 per sleep space.
• Smoke alarms on every level of the home
• Carbon monoxide detectors within 10 feet of every sleeping area
• Fire extinguisher mounted in the kitchen (certified and current inspection tag)
• Secure outdoor fencing around the play area — height and condition requirements vary by municipality, but the area must provide at least 50 square feet per child
• Locked storage for all personal items, medications, cleaning supplies, and anything else inaccessible to children
• First aid kit stocked to TDHS specifications

If your home already has functioning smoke alarms and a fenced yard, the equipment costs are modest. If you need to install fencing, that single line item can run $1,500 to $5,000 depending on yard size and material.

Local Business Registration

Local business or privilege licensing may also apply. Nashville charges $15 per year. Shelby County (Memphis) charges $15 per year through the County Clerk. Knox County routes business licenses through the County Clerk as well. Confirm with the relevant local clerk whether a license is required and when it must be obtained.

Zoning Clearance

Family child care homes benefit from the 2025 zoning preemption law (HB 1175/SB 1379, effective July 1, 2025), which classifies them as standard residential properties for zoning purposes. You still need a clearance letter from your municipality, and some jurisdictions charge a nominal fee for the review — typically $0 to $500, depending on the city.

Insurance

TDHS requires general liability and sexual abuse and molestation coverage. If you transport children, you also need automobile liability and medical payment coverage. Annual premiums for a home daycare general liability policy typically fall between $800 and $2,500 depending on capacity, location, and whether you add other coverage.

If you rent your home, the landlord may require you to name them as an additional insured on your policy. This is legally permitted under recent Tennessee legislation, and most insurers accommodate it without a significant premium increase.

The Startup Cost Range

This is a planning range rather than a strict sum of the listed line items; actual startup costs depend on the home's setup and operating needs.

The wide range reflects the difference between a home that already meets safety standards and one that needs fencing, additional cribs, and layout modifications. The Establishment Grant through the Community Foundation of Middle Tennessee (CFMT) can offset some startup costs — your TDHS Program Specialist submits your eligibility forms at Step 8.

The Tennessee Home Daycare Licensing Guide includes a usable space calculator and a licensing timeline planner that helps you sequence these expenses across the 2-to-6-month licensing window so you are not paying for everything at once.

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