The Worker Retention Payment (WRP) mechanism was introduced by the Government to support staff retention in the childcare sector, beginning December 2024.The funding delivers a 15% above-award wage increase for eligible workers.
Providers receiving the funding must pass payments on to workers as a wage increase. However, the Government has not specified exactly how the WRP should be treated in payroll. Reference material refers to the WRP as an ‘additional minimum hourly amount payable to staff,’ rather than categorising it specifically as either an allowance, or as wages. This means there is some flexibility in how providers can apply the payment in their payroll configurations.
Many childcare centres have chosen to apply the WRP as an allowance, to clearly show staff that they are receiving an additional 10% on top of their award wages. This approach is also recommended by many payroll providers and advisory websites.
In our experience though, showing it as an allowance has a drawback. The uplifted rate will not automatically apply to leave loading for leave hours. Therefore, our best practice recommendation is to increase the base hourly rate for staff receiving the WRP and then notify employees that the rate includes the 10% WRP.
