FAQs for Employers

General questions & answers about Paid Parental Leave scheme for business

What is the Paid Parental Leave scheme?

The Paid Parental Leave scheme is a government funded entitlement for working parents who are primary carers of children born or adopted from 1 January 2011. Parental Leave Pay is paid for a maximum of 18 weeks.

Who will fund Parental Leave Pay?

Parental Leave Pay is funded by the Australian Government.

Who is entitled to Parental Leave Pay?

Most working parents, including full-time, part-time, self-employed, casual, contract and seasonal employees may have access to Parental Leave Pay provided they meet the eligibility criteria.

How much Parental Leave Pay does my employee receive?

Parental Leave Pay is a taxable payment paid at the National Minimum Wage, currently $570 a week before tax.

What if I have an employee who is eligible for Parental Leave Pay?

If your employee has submitted a claim for Parental Leave Pay, and is eligible, you will be asked to provide us information such as your bank account and the employee’s pay cycle details. This information is needed so Paid Parental Leave funds can be transferred to your account. The easiest way to provide this information is online. You can register for the Paid Parental Leave scheme through Centrelink Business Online Services.

If you do not have access to the internet, you can provide these details by calling the Centrelink Business Hotline.

Who can apply for Parental Leave Pay?

Working parents of children born or adopted from 1 January 2011 can apply for Parental Leave Pay. In most cases, this will be the birth mother or an adopted child’s initial primary carer.

Can Parental Leave Pay be transferred to another primary carer?

Parental Leave Pay may be transferred from the mother to another primary carer, such as the father, who meets the eligibility criteria, but both cannot receive Parental Leave Pay at the same time.

Will my employee accrue additional leave entitlements for Parental Leave Pay?

Your employee will not accrue additional leave entitlements for Parental Leave Pay. The type of leave they use while receiving Parental Leave Pay will determine whether additional leave is accrued. For example, if Parental Leave Pay is received while the employee is on long service leave, accrual rules relating to long service leave will apply.

When can my employee take Parental Leave Pay?

Your employee can choose when their Parental Leave Pay starts. It can start at any time from the birth or adoption of their child, and they must receive all of their Parental Leave Pay within 12 months of their child’s date of birth or adoption. To be eligible for the full 18 weeks of Parental Leave Pay, your employee must choose a start date that is within 34 weeks of the birth or adoption of their child. Parental Leave Pay can be taken before, after or at the same time as paid leave your business provides, such as annual leave and/or paid and unpaid maternity leave. Parental Leave Pay must be taken in one continuous block of up to 18 weeks.

Does my employee need to receive their Parental Leave Pay within a certain time?

Your employee must receive all of their Parental Leave Pay within 12 months of the date of the birth or adoption. To be eligible for the full 18 weeks of Parental Leave Pay, the nominated start date for your employee’s Paid Parental Leave period needs to be within 34 weeks of the birth or adoption of their child.

If your employee is eligible for Parental Leave Pay, but claims after 34 weeks, the Parental Leave Pay they can receive is reduced. For example, if they claim in the 35th week after the birth/adoption of their child they will only be eligible for 17 weeks of Parental Leave Pay, 36th week only 16 weeks, 37th week only 15 weeks.

Will the Paid Parental Leave scheme affect existing employer-provided parental leave entitlements?

Businesses that currently provide paid parental leave through an industrial agreement or other contractual agreement cannot withdraw those entitlements for the duration of that agreement. If eligible, employees will be able to access up to 18 weeks of Parental Leave Pay, in addition to existing employer provided parental leave. Parental Leave Pay can be taken before, after or at the same time as employer provided leave.

Does my employee have any entitlements to other parental leave?

The Paid Parental Leave scheme does not provide an entitlement to leave but is designed to complement existing leave entitlements, for example the unpaid parental leave provision of the National Employment Standards under the Fair Work Act 2009.

Under the Fair Work Act 2009 if an employee has been employed by your business for 12 months or more, they may be entitled to access up to 12 months unpaid parental leave associated with the birth or adoption of a child. Where families prefer one parent to take a longer period of leave, that employee has the right to request up to an additional 12 months of unpaid parental leave.

What do I need to discuss with my employee?

You are encouraged to discuss leave arrangements with your employee before they commence leave and prior to the birth or adoption of their child.

Are there any times when my employee cannot receive Parental Leave Pay?

Parental Leave Pay will not be paid for any period after your employee returns to work.

However, your employee can ‘keep in touch’ with the workplace. If you and your employee both agree, your employee can participate in workplace activities for up to 10 days during their Paid Parental Leave period for the purposes of ‘keeping in touch’. For example, you may have scheduled a short training course and your employee may wish to be involved. This must be a voluntary agreement between you and your employee. You cannot make this a compulsory requirement for your employee.

Questions & answers about my role as an employer in the Paid Parental Leave scheme

What is my role as an employer?

From 1 January 2011, you can choose to provide Parental Leave Pay to your eligible long-term employees. This role will be voluntary until 30 June 2011, so you have time to make any necessary adjustments to your payroll system. This also means you will not have to make changes to your payroll system part-way through a financial year. If you choose not to provide Parental Leave Pay to your employees during this period, it will be paid by us.

From 1 July 2011

From 1 July 2011, you will be responsible for providing Parental Leave Pay to your eligible employees who have a baby or adopt a child from 1 July 2011, have worked in your business for 12 months or more, and are receiving 8 weeks or more of Parental Leave Pay. However, you will have the choice to pay your employee if they have worked for your business for less than 12 months, or are accessing less than 8 weeks Parental Leave Pay. In this instance, if you choose not to provide Parental Leave Pay, we will pay your employee for you.

We will provide Paid Parental Leave funds to you before your employee’s usual pay cycle. You will receive the funds fortnightly throughout the 18 weeks or you may choose to receive them in 3 six-weekly instalments. This will enable you to provide Parental Leave Pay to your employee through your existing payroll cycle.

To make sure you meet your obligations under the Paid Parental Leave scheme, you will need to do the following:

How do I know if my employee is eligible for Parental Leave Pay?

As an employer, you do not need to work out if your employee is eligible for Paid Parental Pay. This is done by us and we will let you know if you have to provide Parental Leave Pay to any of your employees.

What will my employees receive?

Your employees will receive the taxable equivalent of the National Minimum Wage (of $570 per week), paid for up to 18 weeks.

When do I provide Parental Leave Pay to my employees?

When we have transferred the Paid Parental Leave funds into your nominated bank account, you will then provide Parental Leave Pay as part of your employee’s usual pay cycle. You will receive these funds fortnightly throughout the 18 weeks, or you may choose to receive them in 3 six-weekly instalments.

Who will fund the Paid Parental Leave scheme?

Parental Leave Pay is funded by the Australian Government.

When does my role in the Paid Parental Leave scheme start?

From 1 January 2011, you can choose to provide Parental Leave Pay to your eligible long-term employees. This role will be voluntary until 30 June 2011. If you do not choose to provide Parental Leave Pay to your employees during this period, it will be paid by us.

From 1 July 2011, you will be responsible for providing Parental Leave Pay to your eligible employees who have a baby or adopt a child from 1 July 2011, have worked in your business for 12 months or more, and are receiving 8 weeks or more of Parental Leave Pay. However, you will have the choice to pay your employee if they have worked for your business for less than 12 months, or are accessing less than 8 weeks of Parental Leave Pay.

After 1 July 2011 are there any times when I do not have to provide Parental Leave Pay to my employees?

Yes, there are some circumstances where you will have the option not to provide Parental Leave Pay. You will not have to provide Parental Leave Pay if your employee:

If the employee no longer works for your business you will not be required to provide their Parental Leave Pay.

Who will pay my employee’s Parental Leave Pay if I am not required to pay them?

We will pay your employees directly if you are not required to do so.

What records do I need to keep?

You must keep written financial records of the receipt of Paid Parental Leave funds you receive from us, and of the Parental Leave Pay provided to your employee.

What do I do with unused Paid Parental Leave funds?

You must ensure that any unpaid Parental Leave funds are returned to us, either if you become aware you have an amount that cannot be paid, or if we advise that you must return funds.

What happens if I sell my business while paying Parental Leave Pay to an employee?

If you intend ceasing to trade, declare bankruptcy, selling your business, transferring ownership or merging with another business, you need to notify us in advance so arrangements can be made for continuing Parental Leave Pay to your employee.

Questions & answers about providing Parental Leave Pay to my employees

What is my employee asked to confirm about me when they make a claim?

If they are currently employed

What do I need to do to prepare for providing Parental Leave Pay?

The easiest way to do this is online. You can register for the Paid Parental Leave scheme through Centrelink Business Online Services.
If you do not have access to the internet you can call Centrelink Business Hotline to register.
A Business Online Toolkit has been developed to assist employers, human resources staff, accountants and tax practitioners to prepare for the introduction of the Paid Parental Leave scheme.

What information do I need to provide?

We will contact you and ask you to confirm details such as your:

How does my business receive Paid Parental Leave funds?

You will receive Parental Leave funds via electronic transfer into the business bank account you nominated on Centrelink Business Online Services or over the phone when you registered. This will be done before your employee’s pay cycle cut off date and will enable you to provide Parental Leave Pay to your employee through their usual pay cycle.

When will my business receive Paid Parental Leave funds?

In most cases, we will provide the Paid Parental Leave funds to you before your employee’s usual pay cycle. You will receive these funds fortnightly throughout the 18 weeks or you may choose to receive them in 3 six-weekly instalments. This will enable you to provide Parental Leave Pay to your employee through their usual pay cycle.

Will my employee receive Parental Leave Pay if my organisation already has a paid parental leave scheme in place?

Parental Leave Pay can be taken before, after or at the same time as paid leave your business provides such as annual leave and/or maternity leave. Parental Leave Pay does not replace existing workplace entitlements. If you currently provide an employer-funded scheme such as paid maternity or parental leave through an industrial agreement, you cannot withdraw the entitlement for the life of the agreement.

Do I need to withhold tax from the Parental Leave Pay?

You must withhold tax from the Parental Leave Pay under the usual PAYG withholding arrangements and include Parental Leave Pay in the total amounts on the employee’s annual or part-year payment summary.

Do I have to make superannuation contributions for Parental Leave Pay?

You will not be required to make superannuation contributions for Parental Leave Pay.

Will Parental Leave Pay be subject to payroll tax liability or workers compensation premium liabilities?

Parental Leave Pay will not be subject to payroll tax liabilities or workers compensation premium liabilities.

Questions & answers about providing written notification to your employees

What payment notification do I need to provide my employees?

You must provide your employee with written notification of their Parental Leave Pay within 1 working day of the payment being made. You can choose to provide the written notification of pay on a payslip or on a separate record. This notification can be provided to the employee electronically. The written notification must include:

When do I provide my employee with written notification?

You need to give written notification to your employee of their Parental Leave Pay within one working day of the Parental Leave Pay being provided to them.

Do I need to provide payment notification to you?

You do not need to notify us when you have provided Paid Parental Leave Pay to your employee, but you must keep written financial records of the Paid Parental Leave funds you receive from us and of the Parental Leave Pay you provide to your employee.

Questions & answers about participation in the workplace while receiving Parental Leave Pay

Can I ask my employee to be involved in workplace activities while they are receiving Parental Leave Pay?

You cannot make it a compulsory requirement for your employee to take part in any work activities while they are receiving Parental Leave Pay. If your employee returns to work before they have received all of their Parental Leave Pay, their payment will stop.

However, your employee may choose to take part in a work activity for the purposes of ‘keeping in touch’ with the workplace, such as a training day. This must be a voluntary agreement between you and your employee.

How often can my employee be involved in workplace activities?

If you and your employee both agree, your employee can participate in workplace activities for the purposes of ‘keeping in touch’ for up to 10 days during their Paid Parental Leave period. These ‘keeping in touch’ activities include things such as meetings, planning days and training days. These 10 days do not have to be taken all at once.

If your employee has more than 10 ‘keeping in touch days’, your employee’s Parental Leave Pay will stop.

What if I am self-employed and receiving Parental Leave Pay?

If you are self-employed, you will be able to keep an eye on your business. You will still be able to oversee your business and perform occasional administrative tasks, such as arranging a repair or paying an account.

Do I need to pay my employee if they take part in workplace activities while receiving Parental Leave Pay?

You will need to pay your employee their usual wages or salary for the time they participate in ‘keeping in touch’ activities.

What if my employee decides to return to work before their Parental Leave Pay is due to finish?

You will need to notify us if your employee decides to return to work before their Parental Leave Pay finishes. Your employee will also need to notify us. They may be able to transfer any unused portion of their Parental Leave Pay to another eligible primary carer.

Where can I go for more information about my employee’s workplace entitlements?

For more information about workplace entitlements and obligations visit the Fair Work Ombudsman website.