As we move into this new financial year, it’s the ideal opportunity to reset, review, and refocus your approach. When you’re As we transition into the 2025-26 financial year, several critical payroll and compliance changes will directly impact the early childhood education and care sector across Australia. From increased superannuation and minimum wages to evolving reporting requirements, now’s the time to ensure your centre is properly prepared.
Particularly noteworthy for the sector is the extension to the ECEC Worker Retention Payment, with the application deadline now pushed back to 30 September 2025, giving eligible providers additional time to access this vital support.
Here’s what you need to know to maintain compliance and support your team as the new financial year begins:
Minimum Wage Increases of 3.5% Applies in the Australian Childcare Sector
The Fair Work Commission has announced a 3.5% increase to minimum award wages, effective 1 July 2025.
What this means: If your centre pays staff under the Children’s Services Award or Educational Services (Teachers) Award, pay rates will require immediate updating.
Action step: Review all current wages and ensure your payroll system reflects the new award rates from 1 July. Prevent back-pay complications by acting promptly.
Superannuation Guarantee Increase to 12%
From 1 July 2025, the superannuation guarantee increases from 11.5% to 12%.
What this means: Employers must contribute 12% of ordinary time earnings to employees’ superannuation funds.
Action step: Verify that your payroll software or provider has configured this correctly. This will impact your overall staffing costs, so factor it into your budgeting immediately.
Paid Parental Leave Now Includes Super
Superannuation will now be included as part of government-funded Paid Parental Leave, effective 1 July 2025.
What this means: While employers aren’t responsible for paying this superannuation, it’s a significant step toward closing the super gap for women in the workforce—particularly relevant in our female-dominated sector.
Action step: Update your parental leave policies and inform team members of these changes.
Changes to STP (Single Touch Payroll) Reporting
STP Phase 2 continues with refined requirements around how income, leave, and allowances are reported to the ATO for Australian Childcare Providers.
What this means: All payroll must now report more detailed information each pay run, including disaggregated earnings types and termination details.
Action step: Ensure your payroll system is fully STP Phase 2 compliant and that your staff categories and codes are configured correctly to avoid ATO errors.
ECEC Worker Retention Payment – Deadline Extended
The ECEC Worker Retention Payment deadline has been extended to 30 September 2025.
What this means: Australian Childcare Services have additional time to apply and retain eligible educators with extra financial support.
Action step: If you haven’t already applied, now’s the time. Check eligibility requirements, gather necessary documentation, and lodge your application before the deadline.
End-of-Year Finalisation Due by 14 July 2025
Don’t overlook this critical deadline. All STP finalisation reports for the 2024-25 financial year must be submitted by 14 July 2025.
Action step: Reconcile all wages, superannuation, and leave entitlements. Ensure your payroll is finalised through your software so staff can access their Income Statements in myGov.
Need Help Navigating These Changes for Your Australian Childcare Centre?
Between compliance updates, award changes, and ATO obligations, it’s easy to feel overwhelmed. At Sprout Payroll & Finance, we specialise in tailored childcare payroll services and finance solutions for the early childhood sector. From providing comprehensive payroll processing to compliance audits and financial reporting.
Our expertise in Australian childcare financial services means we understand the unique challenges facing your centre. Let’s remove the stress from your plate so you can focus on what matters most, running your centre and supporting your team.
Book a free consultation and get your financial year off to a strong start.