Last verified: October 2026. Fees change, so confirm every figure with your state before you file.
The license fee is the number everyone searches for, and it is rarely the number that sinks a new home care agency. What sinks agencies is running out of cash in the first few months, usually because payroll goes out before client payments come in. This guide breaks down every cost of starting a non-medical home care agency, state by state where it matters.
The six costs that make up your startup budget
- State licensing fees. Anywhere from $0 to several thousand dollars. See the table below.
- Bonds and insurance. General and professional liability, workers’ compensation, and in some states a surety or dishonesty bond. Insurance is often a bigger yearly cost than the license.
- Business setup. Entity formation, EIN, a business bank account, and any local business license.
- Policies, training and background checks. A policy and procedure manual written to your state’s rules, caregiver training, and fingerprint or registry checks for every hire.
- Software and phones. Scheduling, electronic visit verification (required for Medicaid in most states), payroll and a phone line that answers.
- Payroll float and marketing. Cash to pay caregivers before clients pay you, and enough marketing to get the first clients through the door.
License fees by state
| State | License or registration | Fee |
| California | Home Care Organization (CDSS) | $5,603 every 2 years |
| Washington | In-Home Services Agency, home care | $5,000 initial; $2,400 to $3,700 every 24 months |
| Texas | HCSSA, Personal Assistance Services | $2,625 |
| New York | LHCSA (with public need review) | $2,000 application |
| Illinois | Home Services Agency (IDPH) | $1,500 per year |
| Virginia | Home Care Organization (VDH) | $1,500 every 3 years |
| New Jersey | Health Care Service Firm | $500 per year, plus a $10,000 bond and accreditation |
| Ohio | Nonmedical Home Health Services (ODH) | $250 every 3 years, plus a $20,000 bond |
| Pennsylvania | Home Care Agency or Registry (DOH) | $100 |
| Arizona | No state license for private pay | $0 (Medicaid enrollment is separate) |
| Michigan | No state license | $0 (Medicaid enrollment is separate) |
Tennessee, Florida, Georgia and North Carolina are covered in their own guides: Tennessee, Florida, Georgia, North Carolina. For every other state, see the 50-state license requirements.
The cost nobody budgets for: payroll float
Say your first client needs 40 hours a week and you pay your caregiver $20 an hour. That is $800 a week in wages, plus payroll taxes and workers’ comp. If the client pays monthly, or a long-term care insurance claim takes several weeks to pay, you can easily be carrying a month or more of wages before the first dollar arrives. Multiply that by every new client you add. Growth eats cash, and agencies that grow fast without a cash cushion are the ones that miss payroll.
Rule of thumb: before you take on clients, know how many weeks of payroll you can cover from your own cash if every client paid late.
Ways to keep startup costs down
- Start private pay. Medicaid and insurance contracts add software, training and billing costs and pay slower. Many agencies add them once private-pay revenue covers payroll.
- Start home-based if your state allows it. An office lease is one of the easiest costs to delay.
- Write your own policies with a template instead of paying someone to start from scratch, but make sure they match your state’s rules.
- Spend on the phone before the logo. A missed call from a family in crisis is a lost client. Answering every call matters more than design.
Get help building your budget
I built and run a licensed home care agency in California, and the money mistakes I made in year one are the ones I now help other owners avoid. The $29.99 Startup Workbook walks through the budget line by line. If you want your state’s numbers worked out with you, book a free call on the Launch track.
FAQ
How much does it cost to start a non-medical home care agency?
It depends mostly on your state. License fees run from nothing (Arizona, Michigan) to several thousand dollars (California, Washington). Add insurance, entity setup, software and enough cash to pay caregivers before clients pay you. Payroll float is usually the biggest number.
Can I start a home care agency from home?
In many states, yes. Some states inspect your home office, and some require a business address. Check your state guide.
Is buying a franchise cheaper?
Usually not. Franchises add an upfront franchise fee and ongoing royalties on top of the same licensing, insurance and payroll costs an independent agency pays.
What is the biggest mistake new owners make with money?
Underestimating payroll float. You pay caregivers weekly or every two weeks, but clients, insurers and Medicaid plans pay on their own schedule, so you need cash to cover the gap.