Providing Parental Leave Pay
If your business is providing Parental Leave Pay, we always give you the funds first.
We'll send you a letter to tell you:
- when your employee's Paid Parental Leave period will start
- how long you will need to provide Parental Leave Pay funds to them.
You don't have to provide Parental Leave Pay before you get the funds from us. We'll transfer funds into your nominated bank account before your employee’s usual pay cycle cut off. This is normally 7 days before. You don’t need to open a separate bank account to get Paid Parental Leave funds.
You’ll get the funds in instalments, either fortnightly or 6-weekly. We’ll send you a payment advice every time we deposit funds into your account.
Call us if you don’t think you have enough to provide your employee’s next payment on the day it’s due. You should call the Third Party Contact Centre.
Making payments to employees
When to pay your employee
You must provide Parental Leave Pay to your employee according to their normal pay cycle. For example, if you usually pay them fortnightly in arrears, you must provide their Parental Leave Pay fortnightly in arrears. You can’t provide it in 1 lump sum and your employee can’t take it at half pay.
From 1 July 2020, the rate of Parental Leave Pay is $753.90 per week, before tax.
Everyone gets Parental Leave Pay at the same weekly payment rate. Neither of the following will impact this:
- how many hours your employee was working
- how much money they were earning before they went on leave.
How long you must pay your employee
You will need to provide the continuous block of Parental Leave Pay. This can include the following:
- their Paid Parental Leave period
- any Flexible Paid Parental Leave days your employees connected to their Paid Parental Leave period.
We will tell you how long you need to provide the funds to each employee.
Depending on their circumstances, this may be between 8 and 18 weeks.
The only deductions you can make from an employee’s Parental Leave Pay are:
- Pay As You Go (PAYG) withholdings - you must withhold tax from your employee’s Parental Leave Pay at the appropriate rate
- child support deductions, if your employee has a child support liability
- automatic deductions that your employee has in place as part of their usual pay arrangements
- garnishee arrangements
- voluntary contributions to their superannuation, including salary sacrifice arrangements.
You don't have to make superannuation contributions for Parental Leave Pay. But the Paid Parental Leave scheme doesn’t prevent you from making voluntary superannuation contributions.
Record of instalment
You'll need to give your employee written notification of their Parental Leave Pay within 1 working day of paying it. This can be on the usual payslip or in a separate notice, such as a letter or email.
The notification must include all of the following:
- your business or trading name
- your Australian Business Number (ABN)
- the employee’s name
- the period to which the Parental Leave Pay relates
- the date you paid or will pay the Parental Leave Pay
- the gross amount of Parental Leave Pay
- the total PAYG amount deducted for all taxable entitlements paid in the pay period
- the total net amount of payment.
If you make other deductions the record must also include details about these. For example if you make superannuation contributions or deduct child support. The record should include both of the following:
- the amount of the deduction
- the name and number of the account into which the deduction’s paid.
You must include Parental Leave Pay in the total amount on your employee’s annual or part year payment summary. You don't need to separately identify it from other amounts.
Get the Employer Toolkit
The Employer Toolkit is your complete guide to the Paid Parental Leave scheme and what you need to do.
Page last updated: 14 September 2020
This information was printed 27 October 2020 from https://www.servicesaustralia.gov.au/organisations/business/services/centrelink/paid-parental-leave-scheme-employers/how-manage-your-role-scheme/providing-parental-leave-pay. It may not include all of the relevant information on this topic. Please consider any relevant site notices at https://www.servicesaustralia.gov.au/individuals/site-notices when using this material.