Paid Parental Leave Just Got Bigger. Here’s What Changes for Employers From 1 July 2026
Most employers know parental leave exists. Far fewer know exactly what changed on 1 July 2026, and which parts of it actually require them to do something.
Government-funded Paid Parental Leave has expanded to 26 weeks, up from 24. Super is now being paid on those weeks too. And employers have specific record-keeping and pay slip obligations that come with it, even though the government is the one funding the payment.
Here’s what’s actually new, what you need to do, and the part most employers are getting confused about.
What’s Actually Changed From 1 July 2026
Three things shifted at once, which is part of why this is causing confusion.
First, the scheme now covers 26 weeks of government-funded Paid Parental Leave, up from 24 weeks. This applies to children born or adopted on or after 1 July 2026.
Second, superannuation is now paid on government Paid Parental Leave at the standard 12 percent rate. This has never applied before and is a meaningful financial change for employees taking extended leave.
Third, the reserved portion of leave that must be taken by each parent in a couple has increased, a change designed to encourage more equal sharing of care between parents.
The Super Detail That’s Tripping Employers Up
Here’s the part most employers misread: the ATO pays the super on Paid Parental Leave. Not you.
The ATO will calculate and pay the superannuation contribution directly to your employee’s super fund after the end of the relevant financial year. The first of these payments will go out during the 2026–27 financial year for leave taken from 1 July 2025 onward.
You don’t calculate it. You don’t pay it. But you do still need to make sure your employee’s super fund details on record are accurate, because the ATO is using your data.
What Employers Do Still Need to Do
Just because the government funds the payment doesn’t mean employers step back entirely. There are still clear obligations.
You must notify your employee in writing within one working day of each Paid Parental Leave payment being made. That notification can go on their regular pay slip or in a separate letter or email, but it must be done each time.
Your pay slips and records must clearly identify Paid Parental Leave payments separately from regular wages. Lumping them together isn’t acceptable and can create compliance issues if your records are ever reviewed.
You also need to include Paid Parental Leave in the total amounts on your employee’s annual payment summary at year end.
What This Means If You Also Offer Employer-Funded Parental Leave
Some businesses offer their own paid parental leave on top of the government scheme, either through contracts, enterprise agreements, or workplace policies.
If your business does this, now is the time to check two things. First, confirm whether superannuation applies to your employer-funded payments specifically. This is a separate question from the government-funded scheme and depends on how your leave policy is structured.
Second, check whether your existing policy documents still reflect accurate entitlements given the changes to the government scheme. Outdated policies that reference old leave lengths or entitlements create confusion and potential legal exposure if a dispute arises.
The Workforce Planning Side Most Small Businesses Underestimate
The financial mechanics are only part of the picture. A longer leave entitlement means longer absences to plan around.
For a small business with a tight team, a staff member taking up to 26 weeks of parental leave is a meaningful operational challenge. Cover arrangements, workload distribution, client management, and return-to-work planning all require more lead time than many employers currently allow for.
Starting those conversations early, ideally as soon as a leave request comes in, is consistently better than scrambling once the absence has already begun.
A Quick Checklist for Employers
Check your employee’s super fund details are accurate. The ATO is paying super contributions using your records, so outdated fund information causes problems you’ll have to fix later.
Set up your pay slip process to identify PPL payments separately. This isn’t optional and needs to be in place before the first payment is made.
Review any employer-funded parental leave policy you have. Confirm it’s up to date and that you understand whether super applies to those payments specifically.
Start workforce planning conversations early. A 26-week absence needs more planning runway than a 24-week one, and small teams feel that difference acutely.
Understand the reserved leave rules. Each parent in a couple now has four weeks of reserved leave on a use-it-or-lose-it basis. Knowing this helps you plan for scenarios where both parents in your team take leave within the same period.
Frequently Asked Questions
Does the employer pay the super on Paid Parental Leave? No. The ATO pays 12 percent super directly to the employee’s super fund after the financial year ends. Employers do not calculate or process this payment.
Do the new rules apply to children born before 1 July 2026? The 26-week entitlement applies to children born or adopted on or after 1 July 2026. Children born earlier have different entitlements depending on the birth date.
What if my employee wants to take their leave in flexible blocks? Paid Parental Leave can be taken flexibly, including single days and smaller blocks, as long as it’s used before the child’s second birthday.
Is my business required to offer employer-funded parental leave on top of the government scheme? Not by law, unless it’s specified in an enterprise agreement, contract, or workplace policy that applies to your employees.
Get Parental Leave Right from Day One Talk to Edulink
Parental leave administration touches pay slips, records, super details, and workforce planning all at once. We make sure the payroll side is handled correctly so you can focus on the people side.
Edulink Payroll Services charges $750 per employee, per year, covering payroll, compliance, and reporting, for small and medium businesses across greater Sydney and Campbelltown.
Have more employees? Call us for a discounted rate.
📞 Call us today: 04 044 71 816
Edulink Payroll Services | Campbelltown & Greater Sydney | Call 04 044 71 816
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