Care workforce wage costs: planning cash flow for pay rises and Payday Super

In a care business, people are the service. Educators, support workers, nurses, carers and clinicians are paid every week or fortnight, and ratios, rosters and client needs leave little room to trim hours when money is tight. When wage rates rise, super timing changes or the business grows, the effect on cash flow is immediate. This page looks at the changes currently reshaping care workforce costs and how to plan for them.

What’s changing in care workforce costs?

Change	Who it affects	What it means for cash flow
ECEC Worker Retention Payment	CCS-approved long day care and OSHC providers	Higher wages funded by a grant, with conditions; grant period ends 30 November 2026
Payday Super	All employers	Super due in line with each payday from 1 July 2026, not quarterly
Growth	Any care business adding clients	New staff paid before their work is funded
Annual wage reviews	Award-covered employers	Rates usually rise from the start of the financial year

How does the ECEC Worker Retention Payment work?

business.gov.au describes the grant as funding a 10% wage increase for all eligible staff in the first year and an additional 5% in the second, plus at least 20% extra towards eligible on-costs. It runs from 2 December 2024 to 30 November 2026. Providers must be approved for Child Care Subsidy and operate centre-based day care or outside school hours care, must pass the funding on through increased wages, and must limit fee growth.

The Fair Work Ombudsman’s summary confirms the phasing: 10% from December 2024 and a further 5% from December 2025, for workers covered by the relevant awards.

For operators, three things matter:

1. Timing. Make sure you know when grant payments arrive relative to your payroll dates.
2. Fee limits. The fee growth condition constrains how quickly revenue can rise to meet other cost increases.
3. The end of the grant period. Check the Department of Education’s current guidance on what follows, and model your costs and fees for the months after 30 November 2026.

What does Payday Super change?

The ATO says Payday Super applies from 1 July 2026. Instead of paying super guarantee quarterly, employers pay it in line with each payday. For workers that’s a clear improvement. For employers, it removes the float that quarterly super used to provide. A business that relied on paying super a few weeks after the quarter ended now needs that cash on payday.

For care businesses with large casual workforces and income paid in arrears (NDIS, Support at Home, subsidy), the change can widen the working capital gap noticeably.

Growth: the hidden wage cost

Every new participant, client or enrolled child brings future revenue and immediate wage costs. In NDIS and home care, you pay workers for shifts that won’t be claimed and paid for days or weeks. In childcare, you may need an extra educator on the roster before a room fills. That’s healthy growth, and it still needs funding.

The claims gap calculator shows how much cash is tied up between paying staff and receiving income, and how that changes as you grow.

How can you plan for wage changes?

• Keep a 13-week cash forecast with payroll, super, PAYG withholding and BAS on the actual dates they fall due.
• Model each change separately. A rate rise, the move to Payday Super and a new contract each have their own effect.
• Set up automation so super is paid with each pay run.
• Arrange a buffer early. Facilities are easier to set up while trading is strong than in the middle of a squeeze.

If your forecast shows a gap, find out what’s available in about 60 seconds, with no credit check.

Which finance suits wage timing?

• A line of credit, drawn on payroll week and reduced as income arrives, is the most common fit.
• A short-term unsecured facility for a specific growth step.
• A property-secured loan from $20,000 to $5,000,000, over residential or commercial property, if you’re also clearing arrears or funding a larger project.

Unsecured, cash-flow and line-of-credit options for trading businesses typically range from $5,000 to $500,000, based on what your turnover and bank statements show. If super or PAYG arrears have built up, see ATO and payroll tax debt.

An illustrative example

Illustrative only. An NDIS and home care provider with a large casual workforce previously paid super quarterly, which meant a few weeks’ breathing room each quarter. With Payday Super in place, that float disappears just as the provider takes on a large new contract. Its 13-week forecast shows several tight weeks. A line of credit sized on turnover covers the overlap until claims for the new contract flow steadily.

Casuals, agency staff and overtime

Rates are only one side of wage costs. Many care businesses carry extra costs when rostered staff call in sick or a new client starts at short notice. Agency staff and overtime fill the gap, usually at a premium. Tracking how much of each pay run goes to agency and overtime shows whether it’s a one-off or a pattern. If it’s a pattern, recruiting permanent part-time staff may cost less overall, even though it adds to the fixed wage bill. Lenders reviewing a care business often ask about this mix, because it affects both margin and reliability.

See if your business qualifies

Looking after your workforce is looking after your clients. The enquiry takes about a minute and doesn’t involve a credit check. Your details stay with one team instead of being passed around lenders. A real person who understands care workforces and payment cycles will call you.

Please answer accurately, including how much you need, what it’s for and your state, so we can find the right fit on the first call.

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