What Has Changed With Paid Parental Leave?

Paid parental leave has undergone a series of reforms aimed at increasing flexibility and encouraging shared caregiving.

From 1 July this year, eligible parents will be able to access up to 26 weeks of government-funded paid parental leave, based on a standard five-day work week.

This is an increase from:

• 22 weeks in 2024
• 24 weeks in 2025

Increased “Use-It-Or-Lose-It” Leave for Partners

The portion of leave reserved for each parent in a couple will increase from three weeks to four weeks, on a use-it-or-lose-it basis.

This means:

• Each parent must take their allocated portion or it is forfeited
• It cannot be transferred to the other parent
• Single parents are entitled to the full 26 weeks

This change is designed to support more equal sharing of caregiving responsibilities.

How Much Time Off Can Employees Take After Having a Child?

Under the Fair Work Act, eligible employees are entitled to:

• 12 months of unpaid parental leave
• An option to request a further 12 months, subject to employer approval

This unpaid leave entitlement exists separately from the government paid parental leave scheme.

In practice, employees often combine unpaid parental leave under the Fair Work Act with government-funded paid parental leave.

How Much Government Paid Parental Leave Do Employees Get?

Eligible employees can currently receive government-funded paid parental leave at:

• $189.62 per day
• $948.10 per week

From 1 July 2026, this will equate to 130 days, or 26 weeks, based on a five-day work week.

Payments are administered through Services Australia.

Why Flexibility Around Leave Has Increased

Historically, paid parental leave was structured around the assumption that mothers were the primary carers. This often resulted in women remaining out of the workforce longer than they wanted to.

The current system allows far more flexibility and supports partners to take a more active caregiving role if they choose.

This does not mean mothers should take less leave. It simply means families now have more genuine choice.

Do Employees Have to Take Paid Parental Leave All at Once?

No. This is one of the biggest practical changes employers are seeing.

Paid parental leave can now be taken as:

• A single continuous block
• Multiple smaller blocks
• Single days
• A mix of blocks and single days

What Does This Look Like in Practice?

An employee could:

• Take 13 weeks completely off
• Return to work three days per week
• Use two days per week of government paid parental leave to support a gradual return

You may also see partners taking longer periods of leave than in the past, particularly as their reserved entitlement increases to four weeks.

Do Employers Have to Pay Paid Parental Leave?

Sometimes yes, sometimes no.

If an employee meets certain criteria, such as:

• Being employed for at least 12 months before the leave, and
• Taking a block of at least eight weeks

You may be required to process the government paid parental leave through your payroll.

You are reimbursed by Services Australia, so there is no out-of-pocket cost.

If the employee does not meet the criteria, it is voluntary for you to process payments.

Employees can also choose to have their paid parental leave paid directly by Services Australia, rather than through their employer.

What Do Employers Need to Do to Pay PPL?

To pay government paid parental leave via payroll, employers must:

• Register with Services Australia
• Opt in to provide Parental Leave Pay
• Ensure payroll systems are set up with the correct codes

If you do not opt in, payments will be made directly to the employee.

Should Employers Offer Additional Paid Parental Leave?

There is no legal obligation to provide employer-funded paid parental leave.

Around 50 percent of private employers in Australia with more than 100 employees report offering an average of 13 weeks of paid parental leave, but this assumes sufficient profitability and cash flow.

If fully funded paid parental leave is not viable, alternatives could include:

• A lump sum return-to-work payment
• Topping up missed superannuation
• Continuing annual leave accrual during unpaid leave

The key is to offer benefits that are sustainable for your business.

Do Employees Get Superannuation on Paid Parental Leave?

This is a significant change.

It has long been recognised that women often retire with lower superannuation balances, partly due to time out of the workforce or working part time while raising children.

For children born or adopted after 1 July 2025, employees receiving government paid parental leave will receive a Paid Parental Leave Superannuation Contribution.

This contribution will be paid by the Australian Taxation Office, not the employer.

What Action Do Employers Need to Take Now?

If you employ staff, there are a few key steps to take.

Review Your Policies

Ensure any parental leave policies reflect current legislation and upcoming changes.

Understand Entitlements

If you have an employee expecting a child, make sure you understand:

• Their unpaid parental leave entitlement under the Fair Work Act
• How government paid parental leave works at a high level

This will help you respond confidently to requests such as:

• Returning part time rather than full time
• Taking leave in separate blocks
• Partners requesting longer periods of leave than you may have seen previously

Being prepared reduces friction for everyone involved.

Final Thoughts

Paid parental leave has evolved quickly, and it will continue to do so.

For employers, the goal is not to memorise every detail, but to understand the framework well enough to:

• Set realistic expectations
• Respond appropriately to requests
• Keep policies, payroll, and practices aligned

Handled well, parental leave does not need to be disruptive. It simply requires awareness, planning, and clear communication.