Superannuation on Paid Parental Leave
Starting from July 1, 2025, superannuation contributions will be included in government-funded Paid Parental Leave (PPL). This means parents will see additional super contributions on top of their PPL payments, marking a major change in retirement savings policy.
What’s Changing?
Parents eligible for government-funded PPL will receive an additional 12% superannuation contribution on their PPL payments. The contributions will be administered by the Australian Taxation Office (ATO) and paid out as a lump sum at the end of the financial year, beginning in 2026.
This reform applies to births or adoptions from July 1, 2025. For parents utilising the full 26 weeks of PPL, the expected super contribution could amount to more than $3,000, offering a boost to their super fund balance
Explore the ATO’s superannuation page for more details.
How Will It Work?
The new super contribution will be calculated based on the total PPL payments received by a parent in a given financial year, multiplied by the superannuation guarantee rate, which will be 12% from 2025. The ATO will then deposit the lump sum directly into the parent’s nominated super fund.
Parents should ensure that their super fund details are accurate and updated with Services Australia to receive the payments promptly.
What Does It Mean for Employers?
Employers are not responsible for making these super contributions, as they are part of the government’s PPL scheme. However, employers may wish to inform employees about this update to ensure they are aware of the new benefit. It’s a positive step that helps standardise super contributions across more employment conditions without increasing administrative duties for employers.
What’s Next?
As the first payments will be processed in 2026, it’s advisable for parents planning to take PPL after July 2025 to review their super plans accordingly. The lump-sum nature of the payment could influence financial planning, especially when considering potential tax impacts or investment strategies within their super funds.
As you navigate these changes, staying informed and compliant is key. At MKG Partners, we specialise in helping clients manage superannuation obligations effectively. Our experienced team is here to guide you through these updates and ensure you’re well-prepared. Contact us today to learn how we can support you in understanding the new super requirements.
