Australia guides

How much is a childcare centre worth in Australia?

There is no reliable free published figure for what Australian childcare centres sell for, and this guide does not invent one. A centre's value comes from its normalised earnings and the risk those earnings continue, which in this sector means its approved places, its occupancy, its National Quality Standard rating and its lease. The transfer mechanics matter as much as the multiple: a service approval can only be transferred with the regulatory authority's consent, on at least 60 calendar days' notice, and Child Care Subsidy approval cannot be transferred at all — the buyer has to be granted their own.

By the bizflip team · Published 2 September 2026 · Facts checked 2 September 2026 · Sources listed below

Owners looking for a valuation usually want one number: a multiple of earnings for Australian childcare centres. That number is not reliably published anywhere, and quoting one would be guesswork dressed as evidence. What can be established is the shape of the answer — where a centre's earnings come from, which of them a buyer will believe, and which parts of the business do not come with the sale at all.

Why there is no published Australian childcare multiple

Most Australian centres are sold privately, and private sale prices are not collected on any public register. The sector is also structured to keep those transactions small and invisible. ACECQA's NQF Snapshot for the June 2026 quarter recorded 18,197 approved services run by 7,200 approved providers — and 5,625 of those providers, 78 per cent, operate a single service. The typical sale is one owner selling one centre, with no reporting obligation attached.

Corporate acquisitions of centre groups are sometimes disclosed, but a listed operator buying thirty centres is not evidence about one suburban centre, and applying a group multiple to a single owner-operated service overstates the answer. Our guide on free data on Australian business sale multiples sets out what free evidence does exist.

Start with earnings, and be clear which earnings figure you mean

A centre is valued on normalised earnings — reported profit adjusted to strip out one-off and personal items and to reflect what the business would earn under a new owner. The decision that matters is whether you are quoting EBITDA, with a market salary for the centre director and any working owner deducted, or seller's discretionary earnings, with an owner's wage added back. Mixing an earnings figure of one kind with a multiple of the other is the fastest way to a wrong number. Our guide to SDE and EBITDA covers the distinction.

As a check on the inputs, the ATO's small business benchmarks for child care services, drawn from 2023–24 tax returns, put total expenses at 79 to 88 per cent of annual turnover for businesses turning over more than $600,000, averaging 84 per cent, with rent at 8 to 12 per cent. Those ratios do not produce a valuation, but they tell you whether your cost base is normal for the industry before anyone multiplies your profit by anything.

Three numbers drive a centre's earnings

• Approved places. A service approval specifies the maximum number of children who may be educated and cared for at the service. That cap is the ceiling on revenue, it is set by the regulator, and it cannot be lifted just because demand exists.
• Occupancy. The gap between approved places and enrolled children is where most of the difference between two similar centres sits. Occupancy that is high, stable and spread across age groups is worth more than the same average achieved in bursts, because staff must be rostered for the peak either way.
• Fee per place, and the constraint on raising it. Services receiving the Commonwealth's early childhood education and care worker retention payment must limit fee growth as a grant condition: those already in the program must not increase fees by more than 5.8 per cent between 8 August 2026 and 7 August 2027. The payment funds an above-award wage increase and has been extended to 30 June 2028 with $3.6 billion in Commonwealth funding.

That last point is what makes childcare unlike most small businesses. Wage costs rise on a nationally set schedule, and the compensating revenue is a subsidy whose conditions cap the fee increases a centre may pass on. A centre whose margin depends on a fee rise it is not permitted to make is a weaker asset than one whose margin comes from occupancy and rostering.

The quality rating is a valuation input, not a plaque

Every approved service is rated against the National Quality Standard. As at 1 July 2026, 15,805 of the 17,131 rated services — 92 per cent — were Meeting NQS or above, so a Meeting rating is the norm rather than an achievement. Among long day care services, 8 per cent were Working Towards NQS, 75 per cent Meeting and 16 per cent Exceeding.

A Working Towards rating therefore marks a centre as below the sector norm to any parent who checks, and hands the buyer a remediation project with no fixed finish date. It is also becoming a revenue risk: the Department of Education has said that from July 2027, services not Meeting Quality Area 2, which covers children's health and safety, may have their worker retention payment funding cut or suspended.

Ratios set the cost base, and they differ by state

Educator-to-child ratios are set in the National Regulations and drive a centre's largest cost. They are not uniform across Australia, so a cost model built on one state's numbers does not transfer to another.

Tasmania also applies 2:25 for children attending a preschool program. Check the current regulation for your own jurisdiction rather than relying on a summary, including this one.

What transfers with the sale, and what does not

This is where childcare deals go wrong, and it is worth settling before anyone argues about price. Three separate approvals sit behind an operating centre, and each behaves differently.

• Provider approval. The buyer must hold one in their own right. It goes to a person or entity assessed as fit and proper, and where the applicant is not an individual the regulator may assess all members of the entity. A decision is due within 60 calendar days of a complete application, with the clock stopping while further information is outstanding — and if no decision is made in time, the application is taken to be refused.
• Service approval. This one does transfer, but only with the regulatory authority's consent. The transferring and receiving providers must jointly notify the regulator at least 60 calendar days before the intended transfer date. Consent is taken to have been given if, 28 calendar days before the transfer, the regulator has not said it intends to intervene. The receiving provider must tell enrolled families at least seven calendar days beforehand, and both providers must notify the regulator in writing within two calendar days after the transfer takes effect. A transfer made without consent is void.
• Child Care Subsidy approval. This one does not transfer at all. The Department of Education states that CCS approval cannot be moved from one provider to another: the seller must notify the department at least 42 days before the sale so their approval can be cancelled, and the buyer must apply for approval even though the service was already approved, because the identity of the provider has changed.

The sequencing risk is the thing to price. The department cannot grant approval to the purchasing provider until the seller's approval is cancelled, and advises buyers to apply as early as possible, ideally alongside the service approval transfer. Subsidised fees are most of a centre's revenue, so any gap between one approval ending and the next beginning is a gap in the money — and whoever wears it should be named in the contract, not discovered at settlement.

Staff, the lease, and the rest of the diligence

Where employees move to the buyer, this is a transfer of business under the Fair Work Act. The new employer must recognise service with the old employer for most entitlements, including sick and carer's leave, flexible working requests and parental leave. Five are treated differently: redundancy, annual leave, long service leave, unfair dismissal and notice of termination. A new employer that is not an associated entity of the seller can decline to recognise service for redundancy, in which case the seller pays redundancy on termination. Where the roster is the product, that is a cash number, not a formality.

The lease usually matters more than any other single document. A purpose-built centre cannot easily move, the fit-out is worth little anywhere else, and a short remaining term with no options caps what a buyer can pay regardless of the trading figures. Where the seller owns the freehold, be explicit about whether the business, the property, or both are being sold.

Working out a number for your own centre

Take it in order. Normalise the last full financial year and the current year to date, and state which earnings basis you are using. Test the cost ratios against the ATO benchmark for your turnover band. Record approved places, average occupancy by age group, the fee schedule and any fee-growth condition attached to grant funding you receive. Attach the current rating certificate and the lease. Then decide the transfer path and the timetable, because the approval sequence sets a floor on how long settlement takes. How much a business is worth covers the general earnings-and-multiple method, and comparing your figures against what similar businesses are currently listed at is a reasonable sanity check — remembering that asking prices are not sale prices.

Sources

Every load-bearing claim in this guide, and where it comes from:

• As at 1 July 2026: 18,197 children's education and care services approved to operate under the NQF; 7,200 providers approved to operate; 5,625 (78%) providers approved to operate only one service; 17,131 (94%) services with a quality rating; 15,805 (92%) of rated services Meeting NQS or above. Long day care overall quality ratings: 8% Working Towards NQS, 75% Meeting NQS, 16% Exceeding NQS. 9,705 long day care services nationally. — Australian Children's Education and Care Quality Authority (ACECQA)
• Educator to child ratios for centre-based services: birth to 24 months 1:4 (all states and territories); over 24 and less than 36 months 1:5 (all except Victoria) and 1:4 (Victoria); 36 months up to and including preschool age 1:11 (ACT, NT, QLD, SA, VIC) and 1:10 (NSW, TAS, WA), with 2:25 in Tasmania for children attending a preschool program. — ACECQA
• Transfer of service approval: "The transferring and receiving approved providers must jointly notify the regulatory authority" at least "60 calendar days before it is intended to take effect"; "A service approval can only be transferred with the consent of the regulatory authority. The regulatory authority is taken to have consented if it is notified of the transfer and, 28 calendar days before the transfer is to take effect, has not advised the approved providers that it intends to intervene"; the receiving provider "must notify parents of children enrolled at the service of the transfer at least seven (7) calendar days before the transfer takes effect"; both providers "must notify the regulatory authority in writing within two (2) calendar days after the transfer takes effect"; and "A transfer of service approval is void if it is made… without the regulatory authority's consent." — ACECQA — Guide to the NQF, section 2.6
• Provider approval: applicants must be assessed as a "fit and proper person to be involved in the provision of an education and care service," and for a non-individual applicant "regulatory authorities may assess all members of the applicant entity for fitness and propriety"; "The regulatory authority must make a decision within 60 calendar days of receiving a complete application," excluding time taken to provide additional information or complete a knowledge assessment, and "If a decision is not made within 60 calendar days, the application is taken to be refused." — ACECQA — Guide to the NQF, section 1.1
• A service approval specifies the "maximum number of children" who may be educated and cared for at the service. — ACECQA — Guide to the NQF, section 2.2
• Changes to service transfer obligations: "From 1 October 2023, the timeframe in which approved providers must notify the regulatory authority of a service transfer will increase from 42 to 60 days. The timeframe in which the approved provider receiving the service transfer must notify families will also increase from two to seven days." — ACECQA — Transferring a service approval information sheet
• "You cannot transfer CCS approval from one provider to another. If you sell a service, you must let us know so we can cancel the service's approval. If you purchase a service, you must apply for CCS approval for that service using the Add Service application." Sellers "must complete the notification of intention to sell, close or relocate a service form… at least 42 days before you intend to sell"; "We cannot grant approval to the provider that is purchasing the service until your approval is cancelled"; and "If you buy a service, you must apply for CCS approval for that service. You must do this even if the service was previously approved. This is because the identity of the provider has changed." — Department of Education (Australian Government)
• "The Australian Government is committing $3.6 billion to extend the worker retention payment, supporting a wage increase for early childhood education and care (ECEC) workers through to 30 June 2028." Fee growth cap: "Services that already get the worker retention payment must not increase their fees by more than 5.8% between 8 August 2026 and 7 August 2027." And: "From July 2027, services that are not 'Meeting' Quality Area 2 relating to child health and safety under the National Quality Standard may have their funding cut or suspended." — Department of Education (Australian Government)
• ATO small business benchmarks for child care services (2023–24 tax return data): for annual turnover of more than $600,000, 'Total expenses' divided by 'Annual turnover' is 79% to 88% with an average of 84%; 'Rent' divided by 'Annual turnover' is 8% to 12%. Total expenses to turnover is the key benchmark range for this industry. — Australian Taxation Office
• Transfer of business: "A new employer has to recognise an employee's service with the old employer when working out most of their entitlements, including: sick and carer's leave, requests for flexible working arrangements, parental leave." Entitlements the new employer "might not have to recognise" are "redundancy, annual leave, long service leave, unfair dismissal, notice of termination." A new employer that is not an associated entity "can choose to not recognise an employee's service… for redundancy entitlements. The old employer will then need to pay redundancy to the employee upon termination." — Fair Work Ombudsman (Australian Government)
• "There is no one set valuation method"; common methods include current market values, return on investment, business asset value, cost of starting a business from scratch and future profit; and business.gov.au suggests "getting professional advice on how to value your business through your accountant, a business adviser or a business broker." — business.gov.au (Australian Government)

Ready for your own number? The valuation calculator is free and ungated, and its methodology is public.