The Australian Government will support a wage increase for the early childhood education and care (ECEC) workforce through a worker retention payment. Employers will need to opt-in for these payments through their application. This article provides guidance to eligible employers on how to set this up in the payroll platform. The worker retention payment would include the following employees:

• Those covered by the Children’s Services Award [MA000120] who work in long day care or outside school hours settings
• Those covered by the Educational Services (Teachers) Award [MA000077] who work in CCS-approved long day care or outside school hours settings
• Those undertaking duties that are referenced by the two above awards but are not paid under it, including those for example, paid under a state-based award.

Trainees who are not paid under the Children’s Services Award or Educational Services (Teachers) Award are not eligible. The grant states the obligation to pay workers a wage increase of 15% over two years 10% on top of the current national award rates in the first year. Then an additional 5% in the second year). Refer to this page outlining the minimum rates for the worker retention payment. Which would include the minimum dollar amount that all workers are entitled to (even those currently paid above award).

📢 Key Updates: March 1, 2026

Gender Undervaluation Wage Increase & Payment Absorption

As a result of the Gender Undervaluation Wage Increase, where a portion of the Retention Payment is now absorbed into the final remuneration of the employee, the current configuration for ECEC (Early Childhood Education and Care) customised rules requires adjustment.

1. Rule Set Updates

Action: Paid Leave, OTE, and OT rules must be updated to remove the allowance rate multiplier. This ensures that the base rate for leave and overtime calculations reflects the new minimum rates directly. A rule can be placed at the bottom of the rule set.

Permanent Employees: OTE and OT

Permanent Employees: Paid Leave

Casual Employees: OTE and OT

Casual Employees: Paid Leave

2. Pay Rate Templates

Action: You must manually update the Pay Rate Templates. Input the specific values from the “Difference between new minimum rate and award” column found on this page, Education Worker Retention Table.

Mapping Requirement:

• Apply these "difference" amounts to all ECEC pay categories.

• The same rate applies to both Permanent and Casual templates.

• If you pay above the award rates, you’ll also need to fill in the difference between the above award rate and the required minimum retention payment rate in the pay rate templates.

   

Updating Pay Rate Templates

To calculate the retention allowance correctly, you’ll need to attach the rates to the three custom pay categories. Enter the specific values from the “Difference between new minimum rate and award” column on this page’s Education Worker Retention Table.  

Updating award pay rate templates in bulk

You can also use the export/import feature to update all award pay rate templates in bulk. For more information, please refer to this article.

• Please ensure you select the relevant award from the "your pay rate templates" drop-down menu. 

  

• You must only populate the rate for three custom pay categories. The "SuperRate" column does not need to be populated unless the super percentage paid is different to the default. 

What if I already pay above the award rate?

Where an employee already receives the above award payments, the employee will need to receive an additional payment that correlates with their award classification and the dollar amount from the retention payment. For example:

• Employee is ‌level 3.1 on the Children's Services Award
• The award rate is $27.17
• Their current pay rate, including above award payment is $30.00
• They will need to receive the additional retention payment of $2.72
• Their new pay rate will be $32.72.

Updating employee's pay rates in bulk

You can also bulk update multiple pay rates for employees. For more information, please refer to this article.

• Select the option: Template with employee pay rates: active employees only.
• If you had actioned updating the award pay rate templates in bulk already (see above), those rates would have been prepopulated against the employee's profile already. You can override this rate with the difference for above award payments. 

New Pay Categories

Setting up new pay categories will allow for a clearer display of the retention payment as an additional amount on top of the employees existing hourly rate. This will display as a separate pay earnings line within the pay run, on the employee’s payslip and all payroll reports. This set-up would allow for ‌retention payments to be calculated without changing the employee’s current hourly wage. For more information on how to set up pay categories, please refer to this article.

Create three new pay categories with the following settings for correct super calculations and STP payment classification. All pay categories should be set up as a fixed pay category with rate precision to 2 decimal places.

New tag

Setting up a new tag will allow the rules for the worker's retention payment to apply to specific employees only. For more information on how to set up tags and assigning them to employees, please refer to this article.

Custom rules

Replicate and set up the following customised rules for the Award under the "Key Updates" section above. The retention payment is added as an all-purpose allowance per hour worked to ensure correct payment calculated on penalties including shift, overtime, and casual loading.

Award rules need to be unlocked in order to be able to edit and add customised rules. For more information, please refer to this article.