Guide to Navigating Childcare Costs
- Swarup Dutta
- Feb 14
- 3 min read
Starting or running a childcare centre here in Victoria is such a rewarding way to support our local families and build a business that sits at the heart of the community. However, there’s no sugar-coating it—it comes with some pretty hefty regulatory and financial responsibilities.
With the Best Start, Best Life reforms in full swing, including Free Kinder and the rollout of Pre-Prep, the Victorian landscape is changing fast. While demand is high, the spotlight on quality and financial sustainability is brighter than ever.
Whether you’re just starting out or looking to sharpen up your current operations, here is a breakdown of what you need to know about the "dollars and cents" of Victorian childcare in 2026.
Getting Your Ducks in a Row: Approvals and Rules
Before you can open your doors, you have to clear three main "gates." Most providers work through these while they’re busy with their building fit-out to avoid any nasty delays.
The Person (Provider Approval): You or your entity must be vetted as "fit and proper" under the National Quality Framework (NQF).
The Place (Service Approval): Your premises must hit specific marks—think 3.25m² of indoor space and 7m² of outdoor space per child, plus the right lines of sight for supervision.
The Funding (CCS Approval): You’ll need federal approval so families can tap into the Child Care Subsidy, which is a huge driver for your enrolments.
The Victorian Difference: Staffing Ratios
In Victoria, we do things a little differently (and strictly) when it comes to toddlers. While most states have a 1:5 ratio for kids aged 24 to 36 months, Victoria requires 1:4. This essentially adds a 25% staffing premium for that age group, so your roster needs to be spot on.
The Big Three: Where the Money Goes
The ATO performance benchmarks give us a great "health check" on how centres are spending. For 2022–23, if your turnover was over $600,000, your total expenses likely sat between 78% and 88%.
Here is how those costs usually break down:
Wages and On-costs (Approx. 60% of income): This is your biggest and least flexible cost. Because ratios apply from the very first child in a room, you’re paying for educators even when occupancy is soft.
Rent and Outgoings (Approx. 8–16% of income): Rent is a fixed cost that doesn't care if your rooms are half-empty. In larger centres, we typically see this settle between 8% and 12%.
The Rest (Approx. 12% of income): Think nappies, wipes, art supplies, food, and the ever-important marketing to keep those tours coming through the door.
High Level Victorian Start-Up Budget: The First Three Months (dependant on site location)
Expense Category | 3-Month Total Estimate |
Wages & On-costs | $165,000 – $225,000 |
Rent & Outgoings | $75,000 – $105,000 |
Marketing & Launch | $15,000 – $24,000 |
Consumables & Food | $9,000 – $15,000 |
Utilities & Admin | $6,000 – $12,000 |
Total Working Capital | $270,000 – $381,000 |
Important disclaimer
This blog provides a general overview of childcare regulatory and financial settings in Victoria and Australia and is not tailored to your individual circumstances. It is based on data drawn from multiple public sources, including the Australian Taxation Office, Victorian Government early childhood publications and current National Quality Framework standards, as well as internal benchmark analysis.
The information is current as at early 2026 but may change as legislation, funding settings and benchmark figures are updated. This content does not constitute financial, legal, tax or investment advice, and you should not rely on it as a substitute for professional guidance from a qualified accountant, lawyer or business adviser who understands your specific situation.
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