Free Payroll Tool
See what your payroll provider really charges
Most providers hide per-run and add-on fees. Audit your real cost per employee in about 30 seconds, free.
Run the Payroll Fee Auditor →Blog · Payroll Management · Childcare
Childcare Centers & Preschools: Payroll Compliance Guide (2026)
Payroll compliance for childcare centers rests on the federal rules that reach this industry specifically, 4 of which are cited on this page, plus the deposit and filing duties every employer carries. BEG runs childcare center payroll for $45 per employee per month inside the payroll software you already use, all-inclusive, live in 3 to 5 business days.
The rules that reach childcare centers specifically
Since the 1972 FLSA amendments, preschools and daycare centers are covered enterprises regardless of annual dollar volume and whether public, private, for profit or nonprofit. Every nonexempt employee must be paid at least $7.25 per hour for all hours worked and overtime after 40 hours in each workweek, not after 80 hours in two weeks.
Time spent attending training that the state requires for daycare center licensing is working time that must be paid. Short rest breaks of about 20 minutes or less are paid, and a meal period is unpaid only if the employee is completely relieved of duty; an employee who must watch children while eating is still working.
Bona fide preschool and kindergarten teachers may be exempt from minimum wage and overtime as professionals when their primary duty is teaching, under the same conditions as elementary school teachers. Preschool employees whose primary duty is caring for the physical needs of the children would ordinarily not meet the teacher exemption.
Daycare centers must follow the FLSA youth employment standards: minors under 16 face restrictions on working hours and equipment, and workers under 18 may not perform hazardous occupations, which include driving a school bus.
The duties every employer carries
Federal income tax withholding, Social Security and Medicare, FUTA, deposits on the monthly or semiweekly schedule the lookback period sets, quarterly Form 941, annual W-2s and, for childcare centers paying contractors, 1099-NEC at the $2,000 threshold in force for tax years after 2025. A late deposit starts at a 2 percent failure-to-deposit penalty and climbs to 15 percent.
Under the federal Child Care and Development Fund rules, every licensed, regulated or registered child care provider and every provider paid with CCDF assistance must obtain a criminal background check for each child care staff member, including contract employees. The check includes an FBI fingerprint check, the National Sex Offender Registry, and state criminal, sex offender and child abuse registries for each state of residence in the past five years, and states must return results within 45 days.
The rules behind this page, with sources
General information, not legal advice. Every rule below was read on the agency page linked next to it.
- Since the 1972 FLSA amendments, preschools and daycare centers are covered enterprises regardless of annual dollar volume and whether public, private, for profit or nonprofit. Every nonexempt employee must be paid at least $7.25 per hour for all hours worked and overtime after 40 hours in each workweek, not after 80 hours in two weeks. [DOL Fact Sheet #46]
- Time spent attending training that the state requires for daycare center licensing is working time that must be paid. Short rest breaks of about 20 minutes or less are paid, and a meal period is unpaid only if the employee is completely relieved of duty; an employee who must watch children while eating is still working. [DOL Fact Sheet #46]
- Bona fide preschool and kindergarten teachers may be exempt from minimum wage and overtime as professionals when their primary duty is teaching, under the same conditions as elementary school teachers. Preschool employees whose primary duty is caring for the physical needs of the children would ordinarily not meet the teacher exemption. [DOL Fact Sheet #46]
- Daycare centers must follow the FLSA youth employment standards: minors under 16 face restrictions on working hours and equipment, and workers under 18 may not perform hazardous occupations, which include driving a school bus. [DOL Fact Sheet #46]
- Under the federal Child Care and Development Fund rules, every licensed, regulated or registered child care provider and every provider paid with CCDF assistance must obtain a criminal background check for each child care staff member, including contract employees. The check includes an FBI fingerprint check, the National Sex Offender Registry, and state criminal, sex offender and child abuse registries for each state of residence in the past five years, and states must return results within 45 days. [45 CFR 98.43]
Read the full guide to the payroll compliance library, and the rest of the childcare center payroll library.
Managed Payroll, Handled.
BEG manages payroll at $45 per employee per month, all-inclusive. Get an instant cost comparison for your business.
Frequently Asked Questions
Childcare center compliance: DOL Fact Sheet #46
Since the 1972 FLSA amendments, preschools and daycare centers are covered enterprises regardless of annual dollar volume and whether public, private, for profit or nonprofit. Every nonexempt employee must be paid at least $7.25 per hour for all hours worked and overtime after 40 hours in each workweek, not after 80 hours in two weeks.
Childcare center compliance: DOL Fact Sheet #46
Time spent attending training that the state requires for daycare center licensing is working time that must be paid. Short rest breaks of about 20 minutes or less are paid, and a meal period is unpaid only if the employee is completely relieved of duty; an employee who must watch children while eating is still working.
Childcare center compliance: DOL Fact Sheet #46
Bona fide preschool and kindergarten teachers may be exempt from minimum wage and overtime as professionals when their primary duty is teaching, under the same conditions as elementary school teachers. Preschool employees whose primary duty is caring for the physical needs of the children would ordinarily not meet the teacher exemption.
What does managed payroll cost for a childcare center?
$45 per employee per month, all-inclusive, inside the payroll software you already use, with no monthly minimum. Licensing-tied payroll records, subsidy payment coordination and part-time variable-hour staff are configured at setup, not billed as add-ons.
Related Resources
Anthony leads payroll solutions at Business Executive Group, a national managed payroll firm serving businesses across industries including Childcare Centers & Preschools. BEG manages payroll at $45 PEPM, all-inclusive, with deep expertise in compliance, multi-state filing, and industry-specific payroll requirements. Get instant pricing at beghr.com.
Authoritative source: U.S. Department of Labor: Wage and Hour Division
From the blog