Parental leave¶

Parental leave is time off an employee can take around the birth or adoption of a child. Under the National Employment Standards (the NES) — the minimum rules that apply to most employees in Australia — this leave is unpaid. It gives new parents the right to take an extended period away from work and return to their job afterwards.

It is important to keep two different things apart. The NES unpaid parental leave described here is your obligation as an employer. The government Paid Parental Leave scheme is a separate payment run by the government — the two are explained below.

In one line

Parental leave under the NES is unpaid leave for the birth or adoption of a child — up to 12 months for an eligible employee, with a right to request a further 12 months.

Why this matters¶

When an employee is having or adopting a child, they will usually ask about time off. Knowing that the NES entitlement is unpaid, how much there is, and who qualifies helps you answer clearly and avoid confusing it with the separate government payment.

What you will learn¶

What unpaid parental leave is and who can take it
How much leave the NES provides and the right to request more
How the NES unpaid entitlement differs from the government Paid Parental Leave scheme

Understanding the concept¶

Under the NES, an eligible employee can take up to 12 months of unpaid parental leave for the birth or adoption of a child. The employee also has a right to request a further period of up to 12 months, which can bring the total to up to 24 months.

To be eligible, an employee must have completed at least 12 months of continuous service with the employer before the expected birth or the date of the adoption. This 12-month period is called the qualifying period. Casual employees can also be eligible if they have been employed on a regular and systematic basis for at least 12 months and, if not for the birth or adoption, would reasonably have expected to keep working on that basis.

The further-period request must be made in writing and given to the employer at least 4 weeks before the end of the first period of leave. Fair Work explains that the employer must respond in writing within 21 days, saying whether they grant or refuse the request. An employer can only refuse on reasonable business grounds, and must give the employee a chance to discuss the request first.

Because this NES leave is unpaid, the employee does not receive their normal wage from you while they are on it. What they can get instead is covered next.

The government Paid Parental Leave scheme is separate¶

Alongside the NES unpaid entitlement, the Australian Government runs its own Paid Parental Leave scheme. It is administered by the government (through Services Australia), not by the employer, and it provides a payment to eligible parents during their time off.

The key point is that this government payment is a different thing from the unpaid parental leave you provide under the NES. It does not add to or extend the amount of unpaid parental leave an employee can take under the Fair Work rules — it is a separate payment with its own eligibility. The exact rates and length of the government scheme are set and paid by the government, so they are outside what you need to work out as an employer.

For accountants & bookkeepers

The 12-month unpaid entitlement and the right to request a further 12 months sit in the NES. Continuous service is assessed at the expected date of birth or the date of placement for adoption. For the government Paid Parental Leave scheme, employers may in some cases be asked to pass on the government-funded payment to the employee, but the funding and eligibility are the government's — keep it recorded separately from the employer's own pay obligations so the two are never conflated.

Example¶

Sam has worked full-time for the same business for three years. Sam and their partner are expecting a baby, so Sam gives written notice and takes 12 months of unpaid parental leave under the NES. During this time the employer does not pay Sam a wage, and Sam's job is kept open to return to.

As the 12 months near their end, Sam decides they would like more time at home. Six weeks before the leave ends, Sam puts a written request to the employer for a further period of unpaid leave. The employer considers it and replies in writing within 21 days. Separately, Sam applies to the government for the Paid Parental Leave scheme, which is handled by the government rather than the employer.

Common mistakes¶

Thinking parental leave under the NES is paid — the NES entitlement is unpaid.
Confusing the NES unpaid leave with the government Paid Parental Leave scheme — they are two separate things.
Assuming a brand-new employee qualifies — the employee generally needs 12 months of continuous service first.
Believing casuals never qualify — a regular, systematic casual with 12 months of service can be eligible.
Treating the government payment as extra unpaid leave — it does not extend the unpaid period the employee can take.

How this works in myaccountant¶

In the app — because parental leave under the NES is unpaid, you record it against an unpaid leave type for the employee rather than as paid leave, so it does not add to their pay. The leave you record is shown on the pay for that period. The government Paid Parental Leave scheme is handled by the government, so it is not something the app calculates as part of the employee's ordinary pay.

Key points¶

Parental leave under the NES is unpaid leave for the birth or adoption of a child.
An eligible employee can take up to 12 months, with a right to request a further 12 months.
Eligibility generally needs at least 12 months of continuous service.
Regular, systematic casuals with 12 months of service can also be eligible.
The government Paid Parental Leave scheme is a separate payment run by the government.
The government payment does not extend the amount of unpaid leave under the NES.

Learn next¶

General information only — not tax, super or financial advice.

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