As an employer, you will have employees needing time off when they are expecting a child or adopting one. Parental leave is an entitlement most employees in Australia get. In this guide, we break down parental leave, paid parental leave, who is entitled to parental leave pay, and your obligations as an employer.
Understanding parental leave
Parental leave is a category of leave an employee can take when they give birth, have a newly adopted child under the age of 16, or when an employee’s spouse or de-facto partner gives birth. The employee must have worked for their employer for at least 12 months prior and be the person primarily taking care of the child. Employees are entitled to 12 months of unpaid parental leave, though some employers offer paid parental leave.
The Australian Government also offers paid parental leave to eligible employees as part of the Australian Government’s paid parental leave scheme.
Paid parental leave
The Australian Government provides financial support to eligible parents through the paid parental leave scheme, so they can take time off work to care for a newborn or newly adopted child.
The Paid Parental Leave Scheme:
- Complements other birth or adoption leave provided by employers.
- Recognises taking time off to care for a child is an important and usual course of life for parents.
- Promotes a work-life balance.
- Helps employers retain valuable and skilled staff.
- Helps employers enhance family-friendly workplaces.
If they are the primary carer, the birth mother of a newborn child, or the adoptive parent of a newly adopted child, they can claim parental leave pay for up to 26 weeks (130 days) from Services Australia, provided they meet certain conditions.
Parental leave pay
The rate of Parental Leave Pay usually changes on 1 July each year. The rate you get depends on when in the financial year you take your leave. You’ll get the rate that applies for the financial year of the day or days you are claiming. This may mean you get different rates. The rate isn’t based on when your child was born or adopted.
Parental leave pay is based on the current weekly national minimum wage rate. The employee can get paid for up to 26 weeks (130 days), and the money is paid either directly to the employee or to the employer to pay to the employee.
The 130 days of Parental Leave Pay can be shared between parents. Until the child's second birthday they can be taken as single days or larger blocks. If you're a couple, some of your Parental Leave Pay (a minimum of 20 days) is reserved for your partner.
Employees entitled to paid parental leave
Full-time, part-time, casual, seasonal, contract, and self-employed workers who meet the eligibility requirements are entitled to access the parental leave pay scheme.
They must be one of the following:
- The birth mother of a newborn child.
- The partner of the birth mother.
- The child’s biological father.
- The partner of the biological father.
- An adoptive parent of the child.
- The partner of an adoptive parent.
- Another person caring for a child under exceptional circumstances.
Additionally:
To meet the work test requirement, the employee must have worked for you for at least 12 months before the expected adoption or birth date. They must remain employed with you until at least the end of their paid parental leave period (without working during that period). To meet the residency test requirements, they must be Australia-based. To meet the income test requirements, they must have earned an individual income of less than $180,007 or family income less than $373,094 in the financial year prior to the date you claim or the birth/adoption of your child, whichever is earlier.
Besides having to meet an income test and the residency rules, parents must usually have worked at least 10 of the 13 months prior to the birth or adoption of their child to qualify for paid parental leave. This means they need to have worked a minimum of 330 hours, which is around 1 day a week throughout that 10-month period.
The number of Parental Leave Pay Days a family can get depends on when their child comes into their care. For a child born or adopted from:
- 1 July 2026, parents can get up to 26 weeks (130 days) pay.
The paid parental leave scheme doesn’t change any of your employee’s existing leave entitlements or give them a new entitlement to leave.
How does my employee receive paid parental leave?
Your employee will need to apply for parental leave pay through the online myGov portal, which is connected to the Services Australia website. An employee can submit their application up to three monts prior to the expected birth or adoption date of the child.
Your employee should advise you at least 10 weeks prior to their child's expected or adoption date if they intend to claim the Parental Leave Pay.
In the majority of cases you as the employer will receive payment from Services Australia. You will then need to process that payment with your regular pay cycle including withholding appropriate tax. It is also your responsibility to issue an accurate pay slid to your employee.
If your employee has worked for you for less than 12 months, Services Australia will pay them directly into their nominated bank account.
Keeping in touch days
Your employee can access up to 10 keeping in touch days during each 12-month period of unpaid parental leave without losing their entitlement to parental leave pay. This is from the time they become their child’s primary carer until they return to work.
Keeping in touch days are a great way for employees to stay connected with the workplace. Whether it be to catch up with co-workers and employers, learn about new developments in the company, or attend training sessions to keep their skills up to date.
You and your employee must both agree for them to take part in a keeping in touch activity.
What does this mean for my business?
Employers may need to give Services Australia information about the business and the employee so they can check the employee qualifies for parental leave pay. Also, employees need to take leave from work to access parental leave pay or partner pay.
In addition, to access flexible paid parental leave days, the employee must either take them before they return to work or if they want to take them after they return to work, on days that they are on leave or not working.
Employees who want to use their flexible paid parental leave days when they return to work need to come to an agreement with their employer about how and when these flexible days will be taken.
For example, the employer and employee can agree:
- To reduce the hours or days of work.
- To change the pattern of work.
- To the employee taking additional unpaid leave.
Key things to remember for employers
- Employers must provide their long-term eligible employees with Parental Leave Pay after they get the funds from the Australian Government. You will need to provide it to your employee through their normal pay cycle.
- Your employee needs to lodge a claim with Services Australia for parental leave pay. Once the claim is lodged, Services Australia will verify their eligibility and contact you.
- The Paid Parental Leave Scheme applies to all employers.
- Your employee can get Parental Leave Pay at the same time as any type of paid or unpaid leave.
Manage parental leave pay with ease
Peninsula has worked with thousands of businesses in Australia, guiding them through complex matters such as parental leave pay. Our expert team members can answer all your questions about parental leave and employee entitlements. Talk to our team today.
This article is for general information purposes only and does not constitute as business or legal advice and should not be relied upon as such. It does not take into consideration your specific business, industry or circumstances. You should seek legal or other professional advice regarding matters as they relate to you or your business. To the maximum extent permitted by law, Peninsula Group disclaim all liability for any errors or omissions contained in this information or any failure to update or correct this information. It is your responsibility to assess and verify the accuracy, completeness, and reliability of the information in this article.