The National Day Nurseries Association's annual survey found that private and voluntary childcare providers in Wales are losing on average £863 a year on funded places for three- and four-year-olds.
Extra costs such as the new National Living Wage and the phasing in of pension auto-enrolment are other areas of concern, and business rates and VAT continue to push up costs.
Fees are predicted to rise in 80 per cent of Welsh settings.
The NLW will also hit nurseries in Wales harder than England and Scotland, according to National Day Nurseries Association's other country-wide surveys.
It will push pay up by 13 per cent this year, and have the knock-on effect of a large proportion of settings employing staff under 25.
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