Reporting requirements

Your financial statements

In accordance with Australian Accounting Standards, Paid Parental Leave funds you get from us must be treated as a liability until you pay Parental Leave Pay to your employee.

You shouldn’t account for Paid Parental Leave funds as revenue or an expense. However, you do need to include cash receipts and cash payments in your statement of cash flows.

Read more about accounting standards and financial statements, on the Australian Accounting Standards Board website or talk to your accountant.

Your business’s tax return

In your business’s tax return, you need to declare both of the following as assessable income:

• Paid Parental Leave funds you received from us
• any interest you earned on Paid Parental Leave funds.

You can claim a tax deduction for both of these:

• the amount of Parental Leave Pay you provided to your employees
• costs you incurred in administering the scheme.

You’ll need to keep records of the Paid Parental Leave funds you received from us and the amounts you paid in Parental Leave Pay throughout the financial year for your tax return.

Read more about completing your tax return, on the Australian Taxation Office website or speak to your accountant.

Payroll tax

Payroll tax is managed differently in every state and territory. Parental Leave Pay isn’t subject to payroll tax and you need to identify it separately from other amounts that attract payroll tax in your accounting system and reports, such as superannuation and workers compensation premiums.

Read more about payroll tax on the Department of Industry Business website.

Superannuation

You don’t have to make superannuation guarantee contributions for Parental Leave Pay, but you can choose to make voluntary contributions.

You must clearly separate Parental Leave Pay in your payroll system from other amounts that attract a superannuation guarantee liability.

Workers compensation premiums

The Paid Parental Leave scheme doesn’t create additional liabilities for workers compensation premiums. Parental Leave Pay needs to be identified separately from other amounts that attract a workers compensation premium liability in your accounting system and reports.

Read more about workers compensation on the Department of Industry Business website.

Record keeping

You need to keep records of the funds you received from us and Parental Leave Pay you provided to your employees. You must keep records that specify both of these:

• the payment advice each time you receive funds from us
• records of written notifications you have provided to your employees, such as, pay slips or separate notices.

If you’re subscribed to Online Reports in Business Hub, make sure you print or save your payment advice. It’s only stored online for 90 days.

You must keep these records for at least 7 years.

Read more about record keeping on the Fair Work Ombudsman website.