The Australian Government has committed a further $3.6 billion to extend the 15% pay rise for early childhood educators to June 30, 2028. This creates certainty for higher pay in the sector, and is a timely prompt for providers to check that their payroll is keeping up. Here's what was announced and the payroll details you'll want to get right.
The Worker Retention Payment (WRP) was introduced in December 2024 to fund a 15% wage increase for early childhood educators. The original funding was due to run out, and without an extension, childcare workers faced a pay cut.
The Government's $3.6 billion extension locks in the pay rise for a further two years, bridging the sector until the Fair Work Commission's award wage increases are fully implemented by 2029.
The extension gives certainty on funding. But it also means the Worker Retention Payment will continue to interact with a Children's Services Award that is changing, and Fair Work is paying close attention to the sector.
Since March 1, 2026, the award has a new classification structure, updated minimum pay rates, and changes to how some allowances are calculated. The gender undervaluation wage increases are being applied in stages until 2029, and they sit on top of the Annual Wage Review increase each July.
Every one of these changes needs to flow through your payroll system correctly, and at the right time. Three areas where errors may creep in include:
Classification remapping
Staged wage increases
Recalculating the Worker Retention Payment
The funding extension comes ongoing accountability. You need to know your workforce is being paid correctly, and be able to show it. That means building a payroll audit trail, including:
Time and attendance records showing actual hours worked at each centre.
Pay records showing rates, hours, and payments made.
A history of classification and pay rate changes with effective dates.
Evidence that the WRP has been passed through to eligible employees.
A combined workforce management and payroll system makes gathering evidence far easier, because the data is captured automatically across all your sites, from clock-in through to payslip.
We've also put together a guide that walks through the three biggest areas of childcare payroll error risk, what to check in your system, and how to build an audit trail that stands up to investigation.
Download the childcare payroll risks guide to review your setup, or book a demo to see how foundU helps childcare providers manage award changes, staged rate increases, and the Worker Retention Payment in one platform.