From 1 July 2026, Australia’s Paid Parental Leave scheme reaches another important milestone, increasing to 26 weeks of government-funded leave.
The reforms represent continued progress towards better supporting working families and recognising the important role care plays in our workplaces, communities and economy.
For employers, they also provide a valuable opportunity to reflect on how parental leave is experienced across the employee lifecycle, from preparing employees before they take leave, during leave and supporting them as they return to work.
What’s Changed in Paid Parental Leave?
1. More Paid Leave
- 26 weeks of government-funded Paid Parental Leave will be available (up from 24 weeks).
- Leave is paid at the national minimum wage.
- Parents receiving Paid Parental Leave will receive a higher rate of payment from 1 July, increasing to $1,004.70 per week.
- Annual income limits for Paid Parental Leave will rise, with the individual income limit increasing to $186,487 and the family income limit increasing to $386,525.
2. Superannuation Contributions Introduced
- 12% superannuation will now be paid on government-funded parental leave, a game-changer for women’s retirement savings.
- It applies to babies born or adopted on or after 1 July 2025.
- Contributions will be paid as a lump sum after the end of the financial year in which the leave is taken.
3. More Flexibility for Partners
- Concurrent leave doubles: Both parents can now take up to 4 weeks (20 days) together (previously 10 days).
- Reserved leave for partners increases from 15 to 20 days, encouraging active fatherhood and more balanced caregiving from day one.
- This leave can be shared between both parents in any combination.
- A portion of the leave is reserved for each parent on a “use it or lose it” basis.
But It’s Not Perfect Yet
Despite these advancements, challenges remain:
- 26 weeks is still well below the OECD average of 52 weeks.
- Paid leave at the minimum wage doesn’t provide enough income support for both parents to take leave together.
- Eligibility for the scheme is means-tested, so that higher-income families may miss out entirely on payments or superannuation contributions.
These shortcomings reinforce the need for employer-funded paid parental leave to supplement government provisions.
Why Employer-Led Policy Still Matters
Employers who go above and beyond the government’s minimum are setting the gold standard for family-friendly workplaces. These leaders understand that supporting caregiving is a strategic investment, not just a “nice-to-have.”
High-impact employer policies typically:
- Remove outdated labels like “primary” or “secondary” carer, ensuring equal access regardless of gender.
- Allow flexible leave use in blocks, part-time, or spread over a 24-month period.
- Include diverse families, including adoption, surrogacy, and foster care.
- Offer paid leave from day one of employment, with no 12-month waiting period.
- Pay superannuation on unpaid leave, not just paid.
- Provide transition coaching and return-to-work support, keeping employees connected and confident.
These are more than benefits; they’re retention, engagement, and equity strategies.
What Employers Should Do Now:
1. Update Your Internal Policies
- Align your HR documents and payroll systems with the legislative updates.
- Add superannuation to your existing paid parental leave offer to demonstrate your commitment to financial equality.
2. Normalise Shared Care
- Encourage both parents to take leave, especially the “use it or lose it” reserved days.
- Educate leaders and teams on the value of parental leave for fathers.
3. Measure What Matters
- Track leave uptake and return-to-work outcomes by gender to identify and close participation gaps.
- Benchmark your offer against industry best practices and the Family Friendly Workplaces Certification.
4. Communicate Early and Often
- Ensure employees understand eligibility criteria, such as the work test and income thresholds.
- Clarify the difference between government-funded and employer-funded parental leave.
Why These Reforms Matter Now More Than Ever
Paid parental leave is no longer a fringe issue; it’s a core gender equality, financial security, and workforce participation lever.
Research by the Workplace Gender Equality Agency (WGEA) and Parents At Work shows that access to quality paid parental leave directly impacts:
- Career progression
- Employee retention
- Family wellbeing
- Economic resilience
These reforms are backed by the Paid Parental Leave Amendment (Adding Superannuation for a More Secure Retirement) Act 2024, reflecting Australia’s growing recognition that caregiving is an economic infrastructure.
Frequently Asked Questions
Do employers need to provide more than the government Paid Parental Leave scheme?
The government scheme establishes the minimum entitlement. Many employers choose to enhance their offering through additional paid leave, superannuation, transition support or flexible work arrangements as part of their broader people strategy.
Are employers moving away from “primary” and “secondary” carer labels?
Increasingly, yes. Many organisations are adopting more inclusive, gender-neutral parental leave policies that better reflect modern families and encourage shared caregiving.
What support should employers consider beyond paid leave?
Leading practice increasingly includes manager education, parental leave planning, maintaining connection during leave, coaching, gradual return-to-work arrangements and flexible work that supports employees beyond the leave period.
Why does parental leave matter for organisations?
Supporting parents and carers contributes to workforce participation, employee wellbeing, retention, inclusion and gender equality. It also helps organisations build workplaces where people can thrive throughout different life stages and caring responsibilities.
A Win for Families, Equity, and Workplaces
This is a once-in-a-generation opportunity to reset how we support working parents in Australia. Employers who act now will not only comply, they’ll lead.
How our partner organisation Parents At Work can help
Family Friendly Workplaces provides the framework and certification for family‑inclusive employers. Our partner organisation, Parents At Work, offers practical support to bring these reforms to life – including a Parental Leave Transition program, coaching for parents and managers.
If you’d like to review your parental leave approach or explore transition support for your employees, you can learn more about the Parental Leave Transition program via the Parents At Work website.
