In Australia, there are various types of parental leave to be mindful of: unpaid parental leave covered by the National Employment Standards, Government funded paid parental leave, as well as company paid parental leave. Government funded paid parental leave provides eligible working parents the opportunity to receive payments based on the national minimum wage whilst taking time off work to care for a newborn or recently adopted child. This paid parental leave is government funded through Centrelink. This blog provides an overview of parental leave in Australia, as well as the upcoming changes to Government funded parental leave from 1 July 2026.
Differences in Parental Leave Types
Government Paid
The Australian government provides Parental Leave Pay (PLP) to individuals who are caring for a newborn or recently adopted child. The payment is based on the national minimum wage. To receive the payment, the following must apply:
- Be caring for a newborn or recently adopted child.
- Have met the income test:
- You must have an adjusted taxable income of either:
- $180,007 or less in the 2024-25 financial year (individually).
- $373,094 or less in the 2024-25 financial year (combined).
- You must have an adjusted taxable income of either:
- Have met the work test:
- You must have worked for 10 of the 13 months before the birth or adoption of the child.
- Worked a minimum of 330 hours (around one day a week), within those 10 months.
- Have met the residency rules:
- Must be living in Australia and have one of the following:
- Australian citizenship.
- A permanent visa.
- A Special Category visa.
- A certain temporary visa, that is partner provisional or temporary protection visa.
- Must be living in Australia and have one of the following:
- Have registered or applied to register your child’s birth with your state or territory birth registry, if they’re a newborn.
As an employer, you are expected to pay your employees their Paid Parental Leave directly through payroll. You will then be reimbursed by Centrelink for these payments.
Company Paid Parental Leave
In addition to the Government paid parental leave scheme, as an employer you may be required to pay extra parental leave payments if it is required through workplace agreements, employment contracts or workplace policies.
Employees can receive both the Australian governments PLP and their employer funded paid leave if they are eligible.
Many companies choose to adopt a Company paid parental leave incentive to attract and retain talent, as well as reward staff during times where personal life needs to take priority. Company paid parental leave schemes have also been seen to improve employee wellbeing and foster a workplace which values balance and inclusivity. The average company paid parental leave scheme often pays between 6 to 12 weeks at full pay, regardless of tenure or gender.
Unpaid Parental Leave
Unpaid parental leave is a part of the National Employment Standards (NES). An employee may take unpaid parental leave if they wish to take extended time off to care for a child which goes beyond paid entitlements, with a guaranteed right to right to their position at work.
Parents are entitled to take unpaid parental leave if:
- the employee, the employee’s spouse, or the employee’s de facto partner gives birth or
- the employee adopts a child under 16.
The leave can be taken as a single continuous period, flexibly, or a combination of both.
For a pregnant employee, leave can start up to 6 weeks before the expected date of birth (or earlier if agreed), or within 24 months of the birth of the child. The parental leave must end within 24 months of the birth of the child.
Paid Parental Leave Expansion
From 1 July 2026, there are changes to the Government paid parental leave scheme. These changes include direct payments into superannuation funds and an increase in the number of Parental Leave Pay days.
From 1 July 2025, the Australian Taxation Office (ATO) started paying superannuation contributions on PLP payments. These payments are known as Paid Parental Leave Superannuation Contributions (PPLSC). If an employee received Government funded paid parental leave from 1 July 2025, the ATO will pay PPLSC as a lump sum (including an interest component) and will notify the employee once it has been paid. These contributions will start in the 2026/27 financial year and will continue for all Government funded parental leave payment beyond this point.
If a child is born or adopted from 1 July 2026, an employee will now get 130 days of Parental Leave Pay, instead of the current entitlement of 120 days. This equates to 26 weeks, based on a 5-day work week.
Additionally, there are also changes to how many days will be reserved for the other parent. If the birthing parent of the child has a partner, 20 days of Government funded parental leave will also be reserved for them to use.
If you would like more information on the differing types of parental leave and your obligations as an employer, contact us via the link below.