Background: Unpaid family caregivers might suffer losses in income as a result of care provision. Methods: Here we used data from the baseline survey of the China Health and Retirement Longitudinal Study to assess the relationship between hours of weekly caregiving provided to grandchildren/parents/parents-in-law and individual’s monthly employment income. Our study sample comprised 3718 middle-aged Chinese adults who were of working age (45–60 years). For women and men separately, we used a likelihood-based method to determine a caregiving threshold in a two-stage Heckman selection procedure. Instrumental variables were used to rule out the endogeneity of caregiving hours. Results: Our analysis revealed a negative association between caregiving and income for women that depended on a caregiving threshold of 63 h per week. There was an absence of caregiving-income relationship among men. Conclusions: These results offer new insights into the opportunity costs of unpaid caregiving and support tailored policies to protect the financial well-being of female caregivers.