Paid Parental Leave

Paid parental leave

Employees are entitled to receive paid parental leave paid from the Department of Human Services as long as they meet the following criteria:

• be the primary carer of a newborn or newly adopted child
• have individually earned less than $150,000 in the last financial year
• not be working during your Parental Leave Pay period
• have met the work test in the 13 months before the child’s birth or entry into care.

As of the latest information, Parental Leave Pay in Australia is based on the national minimum wage. For the 2023/24 financial year, the current payment is approximately $882.75 per week before tax, which equates to $176.55 per day for a 5-day workweek. This rate can change annually, typically on July 1st.

If you have further questions or need more detailed and up-to-date information, please check the Services Australia website or contact them directly.

In order to automate paid parental leave you will need to follow the below instructions:

Creating the pay category

1. Go to 'Management'>>'Payroll'>> 'Payroll settings' >> 'Pay categories' and create a new pay category. See here for instructions. 
2. Change the unit field to 'fixed' because this is paid on a weekly (not hourly) basis. 
3. There is no requirement to pay superannuation on paid parental leave, but if you wish to, you can leave the SG rate at 9.5%
4. This payment is payroll tax-exempt, so be sure to tick the 'payroll tax-exempt' box
5. Leave does not accrue, so do not tick the 'accrues leave' box
6. Click 'Save'

Applying the settings to an employee

1. Go to the employee file via the 'Employees' tab
2. Go to the 'Pay rates' section
3. If the employee is paid a set amount of hours each pay, the 'show in pay run' box will be ticked against their default pay category. You will need to untick this box.
4. Scroll down the page to the 'Additional earnings lines' section. You are going to use this feature as it will allow you to have payments automatically added to a pay run until the parental leave payment limit has been reached. 
5. Click 'Add' to create an additional earnings line, and select the previous parental leave pay category that you created earlier. 
6. You can set a location for the payment, or use the default location that exists for the employee on their 'Pay run defaults' page
7. The 'units' field represents the number of weeks being paid in the pay run (e.g. 1 for weekly pay run, and 4.33 for monthly pay runs)
8. Set the rate, which is the current weekly amount that has been set for paid parental leave ($812.45 for the 22/23 financial year)
9. Typically you would leave the super rate at 0% but you can override it if you wish. 
10. Enter a note if you wish (e.g. parental leave)
11. In the final field, select the 'all pay runs until the maximum amount has been reached' option. Here, enter the weekly Paid Parental Leave amount multiplied by 18 (the number of entitlement weeks).  In the case of $812.45 per week, the maximum entitlement is $14,62400. 
12. Click 'Save'

As each payment is processed within a pay run, you'll be able to go back here and view how much as already been paid, and how much is remaining to be paid:

How it works in a pay run

Create a new pay run and click on the employee's name and you'll be able to view the details. You should see an earnings line for the parental leave, but because it is a 'fixed' pay category, you'll notice that there are 0 hours. That is fine, as the gross earnings will still be correct. 

For the last pay run, you'll probably find a pro-rata amount that the system will work out so, this will ensure that the employee is not overpaid. 

If you have any questions or feedback please let us know via payroll@roubler.com