Parental Leave in Australia and New Zealand: What Changes in 2026

2026 is a landmark year for parental leave in Australia. Government-funded Paid Parental Leave expands to 26 weeks from 1 July — the final step in a multi-year rollout that began with the Albanese Government’s 2022 reforms to the Paid Parental Leave Act 2010. Once complete, Australia’s scheme will be one of the most generous in the Asia-Pacific region. Across the Tasman, New Zealand already offers 26 weeks of government-funded parental leave under the Parental Leave and Employment Protection Act 1987, but its own set of reforms and rate adjustments are reshaping how employers manage leave in practice.

Whether you operate in one country or both, 2026 brings changes that affect payroll, superannuation, policy documentation, and day-to-day leave administration. This guide covers what is changing, what stays the same, and what employers need to do to stay compliant.

Australia: Government-Funded Paid Parental Leave

Australia’s Paid Parental Leave (PPL) scheme is administered under the Paid Parental Leave Act 2010 and funded entirely by the Commonwealth Government. Employers do not fund PPL payments — Services Australia (Centrelink) pays eligible parents directly, or in some cases routes the payment through the employer’s payroll system. Either way, the cost sits with the Government, not the business.

What Changes on 1 July 2026

On 1 July 2026, the PPL entitlement increases from 24 weeks to 26 weeks (130 payable days). This is the final scheduled increase in a phased rollout that has added two weeks per year since 1 July 2024:

• 1 July 2024: PPL increased from 20 weeks to 22 weeks
• 1 July 2025: PPL increased from 22 weeks to 24 weeks
• 1 July 2026: PPL increases from 24 weeks to 26 weeks (final increase)

PPL is paid at the national minimum wage rate, which is currently approximately $915.90 per week before tax (based on the 2025-2026 minimum wage of $24.10 per hour). The exact rate for the 2026-2027 financial year will be confirmed following the Fair Work Commission’s Annual Wage Review, typically handed down in June.

The “Use It or Lose It” Provision

Of the 26 weeks, 4 weeks are reserved on a “use it or lose it” basis for each parent. This means that if one parent does not take their reserved 4 weeks, those weeks cannot be transferred to the other parent — they are simply forfeited. The intention is to encourage shared parenting and increase the take-up of leave by non-birth parents, particularly fathers and partners.

Both parents can also take leave concurrently for up to 4 weeks. This allows families to have both parents at home during the newborn period without one parent needing to use annual leave or take unpaid time off.

Income Test

Eligibility for PPL is subject to a family income test. The combined adjusted taxable income of both parents must be under approximately $195,000 per financial year. Individual income tests were removed as part of the 2023 reforms, simplifying the means-testing framework significantly.

Superannuation on PPL Payments

Starting from 1 July 2025, the Australian Government pays 12% superannuation on all government-funded PPL payments. The superannuation contribution is paid directly to the parent’s nominated super fund by the Australian Taxation Office (ATO), not by the employer.

This is a significant change. Previously, parents on PPL received no superannuation contributions during their leave period, which compounded the existing retirement savings gap — particularly for women, who take the majority of parental leave. Over a career with two periods of parental leave, the super gap could amount to tens of thousands of dollars by retirement.

For employers, the practical impact is minimal: the ATO handles the super payments. However, employers should be aware that employees may have questions about how super on PPL interacts with their employer-funded parental leave scheme, if one exists.

Employer Obligations

Although the employer does not fund PPL, there are still administrative obligations:

• Facilitating the claim: Employers must provide a response to Services Australia when an employee makes a PPL claim, confirming employment details and expected return-to-work dates.
• Payroll routing (if applicable): Some employers elect to route PPL payments through their payroll system. In this case, the employer receives the PPL funds from Services Australia and includes them in the employee’s regular pay cycle. This is optional, not mandatory.
• Record-keeping: Employers must keep records of parental leave taken, including start and end dates, in accordance with the Fair Work Act 2009 record-keeping requirements.

Australia: Unpaid Parental Leave Under the National Employment Standards

Separate from the government-funded PPL scheme, the Fair Work Act 2009 provides a statutory entitlement to unpaid parental leave as part of the National Employment Standards (NES). This entitlement applies regardless of whether the employee also receives PPL.

Eligibility

To qualify for unpaid parental leave under the NES, an employee must have completed at least 12 months of continuous service with their employer. This applies to both full-time and part-time employees.

Casual employees may also be eligible if they have been employed on a regular and systematic basis for at least 12 months and have a reasonable expectation of continuing employment on that basis.

Duration

An eligible employee is entitled to up to 12 months of unpaid parental leave. The employee may also request an additional 12 months of unpaid leave (for a total of up to 24 months). The employer can only refuse the request on reasonable business grounds, and the refusal must be in writing with reasons provided.

Types of Leave Covered

Unpaid parental leave under the NES covers:

• Birth-related leave: For the birth parent
• Adoption leave: For employees adopting a child under 16 years of age
• Surrogacy leave: For intended parents in surrogacy arrangements (added in recent amendments)

Job Protection

The employer must return the employee to their pre-leave position upon their return to work. If that position no longer exists, the employer must offer the employee an available position that is nearest in status and pay to the pre-leave role. Failure to do so can constitute a breach of the NES and may result in enforcement action by the Fair Work Ombudsman.

Keeping in Touch Days

An employee on unpaid parental leave can work up to 10 keeping in touch (KIT) days during their leave period without breaking the continuity of their leave. These days must be agreed to by both the employee and the employer — neither party can compel the other.

KIT days are useful for maintaining connection with the workplace, attending team meetings, completing training, or gradually transitioning back to work. The employee must be paid their normal rate for any KIT day worked.

Notice Requirements

The employee must give their employer at least 10 weeks’ written notice before the expected start date of their parental leave. They must also provide at least 4 weeks’ notice of the actual start date, and confirm the expected duration of the leave.

Australia: Employer-Funded Parental Leave

There is no legal requirement under Australian law for employers to provide paid parental leave beyond the government-funded PPL scheme. The NES entitlement is to unpaid leave only, and the PPL scheme is government-funded.

However, many Australian employers — particularly in professional services, technology, financial services, and the public sector — offer their own paid parental leave schemes as part of their employee value proposition.

Common Employer Schemes

Employer-funded parental leave policies vary widely, but common structures include:

• Primary carer leave: 6 to 18 weeks at full pay (or sometimes at half pay for double the duration)
• Secondary carer leave: 2 to 6 weeks at full pay
• Superannuation continuation: Employer continues super contributions during both paid and unpaid parental leave

Employer-funded leave is separate from and in addition to government PPL. An employee can receive both. For example, an employee might take 12 weeks of employer-paid leave followed by 26 weeks of government PPL, giving them a total of 38 weeks of paid leave before moving to unpaid leave.

The Shift Away From “Primary” and “Secondary” Carer

A growing number of Australian employers are removing the distinction between “primary” and “secondary” carer in their parental leave policies. Instead, they offer equal leave to all parents regardless of gender or the nature of their relationship to the child. This approach aligns with the intent of the government’s “use it or lose it” PPL reforms and reflects changing expectations around parenting roles.

Organisations including Deloitte, Commonwealth Bank, Salesforce Australia, and several state government departments have already made this shift. If your policy still distinguishes between primary and secondary carers, 2026 is a good year to review it.

New Zealand: Government-Funded Parental Leave

New Zealand’s parental leave framework is governed by the Parental Leave and Employment Protection Act 1987 and its subsequent amendments. The scheme provides 26 weeks of government-funded paid parental leave — a duration that New Zealand has maintained since 2020.

Eligibility

To qualify for government-funded parental leave in New Zealand, the primary carer must have worked for the same employer for at least 6 months (or been self-employed for at least 10 hours per week for 6 months) immediately before the expected date of delivery or adoption.

There is no family income test for New Zealand’s paid parental leave — eligibility is based on employment history, not income.

Payment Rate

Paid parental leave in New Zealand is paid at a rate based on the employee’s ordinary weekly pay or average weekly earnings, up to a maximum of approximately $754.46 per week (before tax). This cap is reviewed annually by the New Zealand Government and typically increases on 1 July each year.

Unlike Australia’s flat-rate approach (national minimum wage for all recipients), New Zealand’s scheme is income-linked up to the cap. A lower-income employee may receive less than the maximum, while a higher-income employee will be capped at the weekly maximum regardless of their actual earnings.

Partner’s Leave

The partner (non-primary carer) is entitled to:

• 2 weeks of unpaid partner’s leave if they have at least 6 months’ service with their employer
• 1 week of unpaid partner’s leave if they have less than 6 months’ service

Partner’s leave is unpaid — there is no government-funded payment for the non-primary carer in New Zealand. This is a notable difference from Australia, where both parents can access the PPL scheme.

Total Leave Available

The total parental leave available in New Zealand is up to 52 weeks, structured as follows:

• 26 weeks of government-funded paid parental leave (taken by the primary carer, or shared)
• Up to 26 weeks of additional unpaid extended leave

The primary carer can transfer some or all of their unused paid parental leave entitlement to their partner, provided the partner also meets the eligibility criteria. This offers flexibility for families to decide how to share the leave between them.

Keeping in Touch Hours

New Zealand provides for up to 52 hours of keeping in touch work during the parental leave period. This is measured in hours rather than days (as in Australia), giving employers and employees more granular flexibility in how they use this time.

Job Protection

Job protection applies throughout the parental leave period. The employer must hold the employee’s position open and return them to the same or a similar role upon their return. The protections mirror those in Australia, although the specific enforcement mechanisms differ under New Zealand employment law.

Key Differences: Australia vs New Zealand

Both countries offer 26 weeks of government-funded paid parental leave, but the details differ in important ways. The following table summarises the key differences for employers operating across both jurisdictions.

Feature	Australia (from 1 July 2026)	New Zealand
Government-funded paid leave	26 weeks	26 weeks
Payment rate	National minimum wage (~$915/week AUD)	Up to $754/week NZD (income-linked)
“Use it or lose it” for partner	4 weeks reserved per parent	None
Super / KiwiSaver on PPL	Yes — 12% super paid by ATO (from July 2025)	Employer not required to contribute to KiwiSaver during government-funded PPL
Partner’s leave (separate entitlement)	Included within PPL (shared entitlement)	1-2 weeks unpaid
Unpaid parental leave	12 months (+ 12 months on request)	Up to 52 weeks total (less paid weeks taken)
Keeping in touch	10 days	52 hours
Eligibility — continuous service	12 months (for NES unpaid leave)	6 months (for government-funded PPL)
Income test	Yes — combined family income under ~$195,000 AUD	No income test
Legislation	Paid Parental Leave Act 2010; Fair Work Act 2009	Parental Leave and Employment Protection Act 1987

Notable Differences for Multi-Country Employers

If your organisation has employees in both Australia and New Zealand, there are several practical differences to manage:

Payment structure: Australia pays PPL at a flat rate (national minimum wage) regardless of the employee’s actual earnings. New Zealand pays based on actual earnings up to a cap. Your payroll system needs to handle both approaches.

Partner entitlements: Australia’s “use it or lose it” model encourages both parents to take leave from the same PPL pool. New Zealand gives the partner a separate (but unpaid) entitlement. Employees in New Zealand may expect the same “use it or lose it” provisions they have heard about in Australia — clear communication is essential.

Superannuation vs KiwiSaver: In Australia, the ATO now pays super on PPL directly. In New Zealand, KiwiSaver contributions are generally not required during government-funded parental leave (although the employee may choose to continue their own contributions). Ensure your payroll and benefits teams understand the difference.

What Employers Should Do Now

With the 26-week PPL entitlement taking effect on 1 July 2026, employers in Australia should be preparing now. New Zealand employers should also review their processes, even if the PPL duration itself is not changing.

Update Parental Leave Policies

Review and update your written parental leave policy to reflect the 26-week PPL entitlement from 1 July 2026. If your policy references a specific number of weeks (such as “20 weeks” or “22 weeks”), it will be out of date after 1 July. Ensure the policy clearly explains the relationship between government PPL, any employer-funded leave, and unpaid parental leave under the NES.

Prepare Payroll for Superannuation on PPL

If you have not already done so, confirm that your payroll system and superannuation fund administration can handle the 12% super contributions on PPL that the ATO began paying from 1 July 2025. While the employer does not make these payments directly, employees may ask questions, and your payroll team should understand how the payments appear in super fund statements.

Review How Your Employer Scheme Interacts With PPL

Determine whether your employer-funded parental leave stacks with or replaces government PPL. Some employers allow employees to take employer-paid leave and government PPL consecutively (stacking), while others offset one against the other. The approach you choose has significant implications for the total paid leave available to employees and should be clearly documented.

Communicate Changes to Employees

Proactively communicate the changes to your workforce, with particular emphasis on:

• The increase to 26 weeks from 1 July 2026
• The “use it or lose it” provisions for partners — many non-birth parents are not aware that 4 weeks of PPL are reserved specifically for them and will be lost if not claimed
• Superannuation on PPL and what it means for retirement savings
• How to make a PPL claim through Services Australia

Ensure Your Leave Management System Is Ready

Your leave management system should be able to track the following as separate leave types:

• Government-funded PPL (26 weeks from 1 July 2026)
• Employer-funded parental leave (if applicable)
• Unpaid parental leave (NES entitlement)
• Keeping in touch days / hours
• Partner’s leave (particularly for New Zealand employees)

If your current system treats parental leave as a single bucket, you risk inaccurate records, missed compliance obligations, and confused employees.

How Leave Balance Helps

Managing parental leave across Australia and New Zealand requires a system that understands the nuances of both jurisdictions. Leave Balance is built for exactly this.

Track every parental leave type separately. Leave Balance allows you to configure distinct leave policies for government-funded PPL, employer-funded parental leave, unpaid parental leave, and keeping in touch days. Each type has its own balance, accrual rules, and approval workflow.

Multi-country support. If your business operates in both Australia and New Zealand, Leave Balance supports multiple country configurations within a single workspace. Australian employees see their entitlements under the Fair Work Act and PPL Act; New Zealand employees see theirs under the Holidays Act and Parental Leave and Employment Protection Act.

Slack and Teams integration. Employees can request parental leave, check their balances, and receive approval notifications directly in Slack or Microsoft Teams — no need to log into a separate HR portal.

Flat pricing, unlimited employees. Leave Balance costs AUD $29 per month, with no per-employee fees. Whether you have 10 employees or 500, the price stays the same.