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.
You don't have to provide Parental Leave Pay before you've received the funds from us. We'll transfer funds into your nominated bank account before your employee’s usual pay cycle cut off, normally 7 days before. You don’t need to open a separate bank account to receive Paid Parental Leave funds.
You’ll receive the funds in instalments, either fortnightly or 6-weekly. We’ll send you a payment advice every time we deposit funds into your account.
If you don’t think you have sufficient funds to provide your employee’s next payment on the day it’s due to be paid, 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 receives Parental Leave Pay at the same weekly payment rate. It doesn’t matter how many hours your employee was working or how much money they were earning before they went on leave.
The only deductions that can be made 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, and
- other deductions, including
- automatic deductions that your employee has in place as part of their usual pay arrangements
- garnishee arrangements, and
- voluntary contributions to their superannuation, including salary sacrifice arrangements.
You aren’t required to make superannuation contributions for Parental Leave Pay; however, 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:
- 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 the Parental Leave Pay was or will be paid
- the gross amount of Parental Leave Pay
- the total PAYG amount deducted for all taxable entitlements paid in the pay period, and
- the total net amount of payment.
If other deductions are made, for example, superannuation contributions or child support, the record must also include the amount of the deduction and the name and number of the account into which the deduction was paid.
You must include Parental Leave Pay in the total amount on your employee’s annual or part year payment summary. It doesn’t need to be separately identified 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: 1 July 2020
This information was printed 14 July 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.