Australia’s government-funded Paid Parental Leave (PPL) scheme is continuing its phased expansion, reaching 26 weeks for children born or adopted from 1 July 2026. The reforms affect workforce planning, payroll processes, and parental leave policies for all Australian employers, including internationally owned businesses.
Eligible parents will be able to access up to six months of PPL based on a standard five-day week, increasing from 22 weeks in 2024 and 24 weeks in 2025. The amount of leave reserved for each parent in a couple will rise from three weeks to four weeks on a use-it-or-lose-it basis, while single parents will be entitled to the full 26 weeks.
From 1 July 2025, superannuation is paid on government-funded Parental Leave Pay. Although the superannuation is funded and administered by the Commonwealth rather than employers, businesses still need to factor the change into workforce planning and parental leave policy design, particularly where employer-funded paid leave top-ups apply.
The reforms are designed to support shared caregiving and improve workforce participation by allowing parents to use leave flexibly over a two-year period. For employers, this increases the need to plan for longer employee absences and ensure payroll and HR systems can accommodate extended leave arrangements.
For international businesses unfamiliar with Australian payroll settings, the reforms add an extra layer of compliance complexity. Reviewing parental leave policies, confirming payroll system readiness, and incorporating the expanded PPL entitlements into workforce planning well ahead of 1 July 2026 will be critical to avoiding operational and compliance issues.
Last Updated: 20 Jan 2025
About the Author
Aaron Garry is the Managing Director of ABN Australia, where he leads the firm’s strategic growth and client service delivery. A Chartered Accountant with deep local and international experience, Aaron has supported hundreds of global businesses in establishing and growing their presence in Australia. His expertise spans market entry, compliance, and commercial advisory.
Aaron Garry
Managing Director