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 yea). 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).

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. 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.

It is also important to note that the allowance has a rate multiplier of 0.1, reflecting the 10% increase for the first year. This figure will need to be updated to 0.15, effective 1st December 2025, to reflect the 15% increase for the second year. 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.

OTE and OT

Paid Leave

Updating Pay Rate Templates

You​ will need to attach the award minimum rates to the three custom pay categories to enable the correct calculation of the retention allowance. You can utilise the export / import feature to update all the award pay rate templates in bulk. For more information, please refer to this article.

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 a 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

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