Paid Parental Leave and super: what HR and payroll should separate in 2026

Published by SESAY · 2026-10-13 · General Australian payroll guidance

What to understand first

Three arrangements can operate at the same time and should not be combined into one payroll rule: unpaid parental leave under workplace law, government-funded Parental Leave Pay administered by Services Australia, and any paid parental leave provided by the employer. For a child born or adopted from 1 July 2025, the ATO pays a Paid Parental Leave Superannuation Contribution on eligible government-funded Parental Leave Pay. The current contribution rate is 12%. The ATO pays it directly to the employee’s super fund after the relevant financial year ends, with payments commencing from July 2026. The employer does not calculate or pay this government contribution, although a separate contract, policy or industrial instrument may create employer-funded payment or super obligations.

Practical checks

• Record the child’s birth or adoption date and keep the government payment, unpaid leave and employer-funded leave as separate items in the HR-to-payroll handover.
• Confirm whether Services Australia will pay the employee directly or require the employer to deliver a funded payment through payroll; later payment blocks may be handled differently from the first block.
• Where the employer delivers Parental Leave Pay, use the required payment records and payslip description, apply only permitted deductions and reconcile amounts received from Services Australia to amounts paid.
• Do not create an employer super liability on the government-funded payment merely because the ATO contribution exists. Check employer-funded parental leave separately against the applicable agreement, contract, policy and super rules.
• Explain the timing clearly: an employee may receive Parental Leave Pay through payroll now while the related ATO super contribution appears in their fund after the financial year.

Fictional example

Fictional employee Maya receives $10,000 of eligible government-funded Parental Leave Pay for a child born after 1 July 2025. A simple 12% illustration is $10,000 × 12% = $1,200. Payroll does not add that $1,200 to Maya’s employer-paid super in the current pay run; the ATO calculates and pays the government contribution directly to the eligible fund after the relevant financial year. Maya also receives six weeks of employer-funded parental leave. HR and payroll assess that separate benefit under the company policy and applicable employment terms rather than copying the government-payment treatment. The $1,200 is illustrative and excludes any adjustment made under the statutory calculation.

Your next step

Review parental-leave templates, payroll codes and employee communications together. Remove wording that says the employer must pay 12% super on the government-funded amount, but do not use that correction to switch off super on an employer-funded benefit without checking its governing terms. Test one scenario paid through the employer and one paid directly by Services Australia. Reconcile funding, gross payment, PAYG withholding, payslip presentation and leave status, and give employees a contact point for questions that belong with Services Australia or the ATO.

How SESAY can help

SESAY can help HR and payroll teams map the parental-leave handover, separate payment types, review payroll-code behaviour and document reconciliations within an agreed scope. Eligibility decisions and unresolved legal, tax or industrial-instrument interpretations should be confirmed with the relevant agency or qualified adviser.

Official sources

• ATO — Paid Parental Leave Superannuation Contribution
• Services Australia — Providing Parental Leave Pay as an employer
• Fair Work Ombudsman — Payment during parental leave

Sources researched 2026-10-13. Examples are fictional and use stated assumptions. Confirm current rules and your circumstances before acting. This is general information, not individual tax or legal advice. SESAY is independent of the regulators linked here.