Childcare operating costs have been rising in recent years, and for providers in New South Wales and Victoria, annual licence fees are about to get a lot more expensive. 

From 1 July 2026, the mandatory annual service fees charged to providers will increase:

  • 11-fold for services run by large for-profit providers
  • 7.7-fold for services run by large not-for-profit providers
  • 5.5-fold for services run by small for-profit providers, and
  • 3.3-fold for sessional preschools/kindergartens and services run by small not-for-profit providers.

Childcare licence fees are rising in Australia

These price hikes are sizeable at every level

Large for-profit providers (with 25 services or more) will be hardest hit, with an increase of approximately 1,038%.

While small for-profit providers (with less than 25 services) will be paying around 500% more for childcare licence fees.

In dollar terms, a small private service with less than 24 places may see its annual fee jump from $319 to approximately $1,821.

While a sole owner-operator with more than 101 places could go from paying $802 per annum to around $4,579.

Why childcare licence fees are going up so much

Our Education Ministers say these steep fee increases reflect the growing volume, risk and complexity of regulatory activities.

New South Wales and Victoria are Australia’s two most populous states. And this increased revenue will go to the new NSW Early Learning Commission and Victorian Early Childhood Regulatory Authority.

This will help the authorities to cover costs as they regulate our sector’s quality, safety and compliance in an effective way, against a backdrop of child safety reform.

Childcare licence fee increases will help fund regulatory activities in New South Wales and Victoria

Price hikes are also happening elsewhere

New South Wales and Victoria aren’t the only places facing an increase in annual licensing fees.

Annual service fees in all other jurisdictions (except Queensland, Western Australia and the Northern Territory) will increase by 10% from 1 July 2026, on top of annual indexation.

As a result, providers in South Australia, Tasmania and the Australian Capital Territory will pay more, though not as much as providers in New South Wales and Victoria.

What the rising childcare licence fees mean for you

If you’re a provider with services in New South Wales or Victoria, the upcoming increase to annual service fees will come as a bill shock.

This increase compounds the economic pressures already being felt by many providers:

  • Operating costs remain high, with rent, energy, food and insurance weighing heavily on budgets.
  • Occupancy is slowing down, with supply outstripping demand in some metropolitan areas.
  • Fee increases continue to be capped by the worker retention payment. And we don’t yet know what the fee growth percentage cap will be for August to November 2026.
  • Gender undervaluation changes have also increased minimum award rates under the Children’s Services Award. Employees outside the worker retention payment received a pay rise from 1 March 2026. While a second pay rise comes into effect one day before the annual licensing fee increase.

Financial pressures being felt by childcare providers and services in Australia

For all these reasons, there’s concern that the quick and large rise in annual licensing fees will have a negative impact on providers, childcare workers and families.

The Australian Childcare Alliance fears that the annual service fee increase will impact the viability of some services, and trigger service cutbacks at others.

They caution that, ‘Every dollar spent on licence fees is a dollar that cannot be invested in educators, resources, or the quality-of-care children receive.’ 

And although many providers can’t raise their fees right now, there’s the possibility that the licensing fee increase will be passed on to families, where possible.

Childcare licence fee increases may affect the viability or some services, trigger service cutbacks or raise the fees paid by families

How OWNA can help

1 July 2026 will roll around quickly, and there’s no way to reduce or delay the mandatory annual fee increase.

However, an efficient childcare management system like OWNA will empower you in this challenging economic climate.

Instead of worrying about occupancy levels and payroll changes, you can leverage our system to boost enrolments, automate payments, and streamline all your admin.

This will free you up to look for cost savings, while looking after your childcare community.

So, lean in to our childcare management software to find confidence and stability in these turbulent times.