If you’re working out how to start a childcare business in Australia, the short answer is three approvals in the right order: provider approval and service approval from your state or territory regulator, then Child Care Subsidy (CCS) approval from the federal Department of Education. Around those sit the business basics. You’ll need a structure, compliant premises, qualified staff, $10 million in public liability cover and a solid set of legal documents.
Most people arrive with a clear picture of the centre they want to run. What nobody pictures is the months of applications, council paperwork and policy writing before the first child walks through the door. That gap is where budgets blow out. So let’s make it predictable instead.
- You need three separate approvals. Provider approval covers your entity, service approval covers each location, and CCS approval lets families claim the subsidy. Lodge the state and federal applications together.
- Settle your business structure before you apply. Approvals attach to a legal entity. Switching from sole trader to company later means a formal transfer with the regulator.
- $10 million public liability cover is the legal floor. It’s a condition of service approval under the Education and Care Services National Regulations.
- Child safety rules got much stricter in 2026. Every worker now goes on a national register, and maximum penalties under the National Law tripled from 1 January 2026.
- CCS approval comes with a deadline. You must start providing care within 3 months of being approved, so time it against your opening date.
Which type of childcare business should you start?
Your service type decides nearly everything else: premises, staffing, how much capital you need and which approvals you apply for. Choose it before you look at a single property.
| Model | What it is | What you need to start | The catch |
|---|---|---|---|
| Long day care (LDC) | Centre-based care for children from birth to school age, generally across a full working day | A purpose-built or converted centre, a full staff team, council approval | Highest capital outlay. Ratios for babies and toddlers drive your wage bill. |
| Family day care (FDC) | You run a scheme that coordinates educators caring for children in their own homes | An office, a coordination team, a network of educators | You’re the approved provider for every home in the scheme, and your income depends on keeping good educators. |
| Outside school hours care (OSHC) | Before school, after school and vacation care for school-age children | Access to school premises, through a licence or agreement | School contracts go to tender. Lose the contract and you lose the site. |
| Occasional care | Short, flexible sessions for families who don’t need regular care | A smaller centre-based space | Patchy demand makes cash flow hard to forecast. |
Most first-time operators assume family day care is the low-risk option because there’s no centre to fit out. It’s cheaper to start. It isn’t lighter on responsibility. From 27 February 2026, approved providers must assess and approve the areas of an educator’s home used for care before any care happens there.
Long day care is what most people mean when they search for how to open a daycare centre. It’s the model with the most demand and the most money at stake.
What approvals do you need to start a childcare business?
Three, run by two levels of government. Your state or territory regulator handles approvals under the Education and Care Services National Law. The Commonwealth handles the subsidy money.
1. Provider approval
This decides whether your entity, and the people with management or control of it, are fit and proper to run an education and care service. It’s granted to the legal entity and recognised across the states and territories that apply the National Law. You need it once, even if you open services in several states.
The background checks are getting tougher. From 1 July 2026, changes to the Child Care Subsidy Minister’s Rules extended the checks on people with management or control to cover ASIC records, criminal history, working with children checks, insolvency and digital identity verification.
2. Service approval
Every location needs its own service approval. The regulator looks at the premises, your policies and procedures, your nominated supervisor and your planning approvals.
Here’s one that trips up keen founders. The National Law makes it an offence to advertise an education and care service that doesn’t have service approval. Check with your regulator before you launch an enrolment campaign for a centre that isn’t approved yet.
3. Child Care Subsidy approval
Most families won’t enrol without CCS, so treat this approval as essential. The Department of Education can’t grant it until your state approvals are in place, but it recommends applying for both approvals at the same time through the National Quality Agenda IT System.
Two details matter for planning. The department doesn’t publish a processing timeframe. And once CCS approval comes through, you have 3 months to start providing care or the approval is cancelled.
4. Council and building approvals
These sit outside the childcare regulator altogether. Expect zoning or change-of-use approval, building certification and, if you prepare meals, food business registration with your local council. The regulator can refuse service approval if a site’s location or design poses a risk to children.
| Approval | Who grants it | What it covers |
|---|---|---|
| Provider approval | State or territory regulatory authority | Your entity and the people who manage or control it |
| Service approval | State or territory regulatory authority | Each service location, its premises, policies and nominated supervisor |
| CCS approval | Australian Government Department of Education | Your ability to administer the Child Care Subsidy for families |
| Planning and building | Local council and building certifier | Zoning, development approval, building safety, food business registration |
Why your business structure needs to be settled before you apply
Approvals attach to a legal entity. That single fact catches out more new operators than anything else in this guide.
Here’s how it plays out in Lawpath consultations. Someone applies for family day care approval as a sole trader, registers a company halfway through, then learns the regulator treats the switch as a transfer. That means written notices from both the old and new provider, a current company extract, proof the business name moved across, and evidence the company has a legal right to occupy the premises.
None of that is impossible. It’s just paperwork you could have skipped. Work through choosing a business structure before you lodge anything with the regulator.
For most childcare businesses, a company is the right call. You’re caring for other people’s children, and limited liability matters if something goes wrong. Lawpath accountants also point out that company profits are taxed at the 25% base rate entity rate instead of your personal marginal rate, which gives you more control over when you draw income.
Bringing in a co-owner or investor? Put a shareholders agreement in place at the same time, while everyone still agrees on everything.
How many staff do you need, and what qualifications must they hold?
Staffing is set by law. Centre-based services must meet minimum educator to child ratios, calculated across the whole service, and educators only count if they’re working directly with children.
| Age of children | Educator to child ratio | Where it applies |
|---|---|---|
| Birth to 24 months | 1:4 | All states and territories |
| Over 24 months, under 36 months | 1:5 | All states and territories except VIC (1:4) |
| 36 months to preschool age | 1:11 | ACT, NT, QLD, SA, VIC |
| 36 months to preschool age | 1:10 | NSW, TAS, WA |
| Over preschool age | 1:15 | NSW, NT, QLD, SA, TAS, VIC |
| Family day care | 1:7, max. four children preschool age or under | All states and territories |
WA and the ACT set their own ratios for school-age children, so check with your regulator if you’re opening OSHC there.
Qualifications follow the ratios. At least half of the educators counted in your ratios must hold, or be actively working towards, an approved diploma-level qualification. Everyone else in ratio needs at least a certificate III or must be working towards one. Services with preschool-aged children also need early childhood teachers, and that requirement scales with the number of children enrolled.
Do you need a childcare qualification to own the business? No. What you do need is a nominated supervisor who meets the regulator’s requirements. At least one educator with current first aid, anaphylaxis management and emergency asthma management training must be on the premises at all times.
Where the money goes wrong: operators budget wages on enrolments, but ratios apply to the children actually present, every minute you’re open. Stretch your hours past what local families need and you’ll pay ratio-compliant staff through your quietest periods.
Put every educator on proper employment agreements from day one. If you run a family day care scheme that engages educators or support services through companies, use a written contractor agreement that spells out insurance, supervision and compliance duties.
What changed in 2026? Child safety rules every new operator must know
Following serious incidents in 2025, governments rolled out a year of child safety reforms. If you’re opening in 2026 or later, these are your baseline:
- Maximum penalties under the National Law and National Regulations tripled from 1 January 2026.
- The National Early Childhood Worker Register started on 27 February 2026. You must record everyone who works with or around children, including agency staff, and update it within 14 days of any change.
- National child safety training is now mandatory for everyone working in services regulated under the National Quality Framework.
- Working with children checks must be in place before a person starts work, with new reporting rules when a worker’s status changes.
- Family day care providers must assess and approve the parts of each educator’s home used for care before care starts.
The practical upshot? Your HR process is now part of your compliance system. Set up onboarding so nobody is rostered until their check is verified, they’re on the register and their training certificate is on file.
How much does it cost to start a childcare business?
There’s no single number. A 90-place long day care centre and a family day care scheme run from a home office are different businesses with different budgets. What you can control is whether your child care business plan covers the costs that catch people out.
| Cost | What drives it | What people miss |
|---|---|---|
| Premises and fit-out | Lease or build, number of licensed places, outdoor play space | Who owns the fit-out and playground when the lease ends |
| Rent before opening | How long approvals take | Rent-free periods that run out before service approval arrives |
| Wages before opening | Recruiting and training staff ahead of enrolments | Several weeks of wages before the first CCS payment lands |
| Insurance | Places, locations, type of service | Abuse and property cover on top of the $10 million public liability minimum |
| Approvals and compliance | Application fees, planning, building certification | Professional help writing the policies the regulator expects |
| Accounting and tax | Structure, payroll, GST | Bookkeeping and annual tax compliance in the first-year budget |
A common surprise: fees for approved childcare are generally GST-free. GST-free sales still count towards the $75,000 GST registration threshold, so most centres will need to register anyway. Registration is also what lets you claim GST credits on fit-out, equipment and supplies.
Family day care schemes earn most of their revenue from levies charged to educators. In consultations, Lawpath accountants regularly find that levy income in first-draft business plans is overstated, while bookkeeping, tax compliance and application fees are missing altogether. Stress-test those numbers before a lender or regulator does.
Premises and leases: what to check before you sign
Don’t sign an unconditional lease until you know the site can get service approval. Ask for the lease to be conditional on planning and service approval, and get it reviewed by someone who has seen childcare leases before. These questions to ask a commercial lease lawyer are a good place to start.
Running family day care from a home you own personally, with your company as the approved provider? The regulator will want proof the company is allowed to use the property, usually a lease, licence or statutory declaration. Talk to your accountant about whether the company should pay rent before you draft it.
What legal documents does a childcare business need?
The regulator expects policies and procedures. Families and staff expect contracts. You need both.
- Enrolment agreement covering fees, absences, late pick-up, illness, notice to leave and CCS obligations.
- Employment agreements for every educator, cook and administrator, matched to the right modern award.
- Contractor agreements for anyone engaged through their own business, from family day care educators to cleaners.
- Privacy policy explaining how you handle medical information, custody orders, photos and emergency contacts.
- Child safe policies and procedures written for your service and your state.
- Photo, video and excursion consent forms signed at enrolment.
- Lease or licence for every premises you operate from.
You’ll hold some of the most sensitive personal information any small business handles. A clear privacy policy that matches how you actually store and share data protects you and builds trust with parents.
What insurance does a childcare business need?
Public liability insurance of at least $10 million is a condition of service approval under regulations 29 and 30 of the Education and Care Services National Regulations. Older guides attribute this to Family Assistance Law, which is wrong, and some add a mandatory $5 million professional indemnity figure that the National Regulations don’t impose.
Workers compensation is compulsory once you employ staff, under your state’s scheme. Professional indemnity, property, business interruption and abuse cover aren’t mandated by the childcare rules, but a centre without them is carrying risk it doesn’t need to.
What we see in Lawpath consultations
Lawpath lawyers and accountants speak with childcare founders, family day care operators and the businesses that supply them. These patterns come up again and again.
- Agency staff don’t take ratio responsibility off your hands. Centres using labour hire educators often assume the agency carries the compliance risk. The approved provider stays responsible for ratios, and agency workers still go on your worker register.
- New-build centres look like a bargain until you check the fit-out. Operators offered a newly developed centre, sometimes as a lease takeover, need to know who owns the fit-out and play equipment and whether the deal is an assignment or a new lease. A new site also comes with no families and no waitlist.
- Generic child safety templates don’t cut it. A template that works for a church group or sports club won’t satisfy a childcare regulator. Child safe standards also differ between states, so a policy written for Victoria needs work before it’s used in Queensland.
- Cameras and photos need consent built in from day one. If you plan to use CCTV or a parent app that shares photos, collect consent at enrolment, keep cameras out of bathrooms and sleep areas, and avoid audio recording.
How to start a childcare business: your step-by-step checklist
- Choose your service type and test local demand: waitlists, new housing estates, competing centres.
- Write a business plan with realistic wages, rent and approval timelines.
- Register your company before you apply for anything.
- Secure premises on terms that are conditional on planning and service approval.
- Apply for provider approval, service approval and CCS approval, lodging the state and federal applications together.
- Recruit your nominated supervisor and educators, then verify checks, register workers and complete child safety training.
- Put your insurance, policies and legal documents in place.
- Set your opening date within 3 months of CCS approval, and start enrolment marketing once service approval is granted.
Frequently asked questions about starting a childcare business
How long does it take to start a childcare business in Australia?
Plan on several months. Provider, service and CCS approvals all run on government timelines, and the Department of Education doesn’t publish a CCS processing time. Council approvals and fit-out often take longer than the applications, so start those first.
Do I need a childcare qualification to own a childcare business?
No. Owners don’t need a childcare qualification, but the regulator assesses whether you’re fit and proper as part of provider approval. You also need a suitably qualified nominated supervisor and educators who meet the qualification rules.
What are the requirements to start a childcare business?
You need provider approval, service approval for each location, CCS approval, council and building approvals, qualified staff meeting ratios, $10 million public liability insurance, and policies and procedures that satisfy the National Regulations.
Can I start a childcare business from home?
Yes, through family day care. You can work as an educator under an existing approved scheme, or become an approved provider and run your own scheme. The areas of your home used for care must be assessed and approved before care starts.
What is the difference between provider approval and service approval?
Provider approval assesses the entity running the business and the people who control it. Service approval covers a specific service at a specific location. You need provider approval once, then a separate service approval for each service you open.
How much insurance does a childcare centre need?
At least $10 million in public liability cover, which is a condition of service approval. Workers compensation is compulsory once you employ staff. Professional indemnity, property and abuse cover aren’t mandated but are strongly recommended.
Can I change from sole trader to a company after I’m approved?
Yes, but the regulator treats it as a transfer to a new provider. Expect written notices from both entities, a company extract and proof the company can occupy the premises. Setting up the company before you apply avoids this.
Is childcare GST-free in Australia?
Fees for approved childcare services are generally GST-free. Those sales still count towards the $75,000 registration threshold, and registering lets you claim GST credits on fit-out, equipment and supplies.
How do I open a daycare centre in Australia?
A daycare centre is usually a long day care service. Register your company, secure premises with planning approval, apply for provider, service and CCS approvals together, recruit qualified staff and put your insurance and policies in place before enrolling families.
If this feels like a lot, that’s because it is, and every operator who has managed to start a childcare business began with the same stack of forms. You don’t need to solve it all this week. Get the foundation right and each approval after it gets easier.
Start with the decision everything else depends on. Register your childcare company with Lawpath and you’ll have the right entity in place before your first application goes in.
