Everyone
Parental leave payments
Employees and self-employed people may be able to get parental leave payments when they are not working so they can care for a new child.
The parental leave payment is a weekly payment for one continuous period of up to 26 weeks. These payments are to support eligible employees as self-employed people when they are not working to take care of a new child. This payment is made from a state-funded scheme administered by the Inland Revenue. However, an employment agreement can also provide for employer-funded payments.
What eligible employees are entitled to
Your weekly parental leave payments equal the greater of:
- your
Ordinary Weekly Pay , orThis is used to help determine how much to pay an employee for annual holidays. Ordinary weekly pay includes everything an employee is normally paid weekly. Irregular or one-off payments as well as discretionary payments and employer contributions to superannuation schemes are not included in ordinary weekly pay.
- your
Average Weekly Earnings This is 1/52 of an employee’s gross earnings for the 12 months up to the end of the last pay period before they take an annual holiday. In some situations, average weekly earnings may be calculated over less than 52 weeks.
up to the maximum weekly amount of $754.87 gross earnings (gross earnings means before any deductions, for example, income tax) per week.
If you’re self-employed, your parental leave payments equal the greater of:
- 100% of your Average Weekly Earnings, or
- the minimum amount of parental leave payment payable to an eligible self-employed person, up to the maximum amount of $754.87 gross (gross means before any deductions, for example, income tax) per week.
The minimum amount of payment for a self-employed person per week is $231.50 per week. This is equal to 10 hours of the minimum adult wage per week and will be adjusted every year on 1 July to reflect the current minimum wage rate. If you’re self-employed, you’ll receive this amount if you make a loss or earn less than the minimum wage while working for at least 10 hours per week.
Scenarios: Calculating payment
You may qualify for parental leave payments by adding together your hours from more than one job to meet the 10 hours a week criterion. The ordinary weekly pay or average weekly income from your different employers will also be added together to work out your total ordinary weekly pay or average weekly income.
For each employment, ordinary weekly pay is the amount of pay that the employee receives under their employment agreement for an ordinary working week. It includes:
- productivity or incentive-based payments (including commission) if they are a regular part of the employee’s pay, and
- payments for overtime if these are a regular part of the employee’s pay, and
- the cash value of any board or lodgings provided by the employer to the employee.
It does not include:
- productivity or incentive-based payments that aren’t a regular part of the employee’s pay, and
- payments for overtime that aren’t a regular part of the employee’s pay, and
- any one-off or exceptional payments, and
- any discretionary payments that the employer is not bound, under the terms of the employee’s employment agreement, to pay the employee, and
- any payment of any employer contribution to a superannuation scheme for the benefit of the employee.
If it is not possible to determine an employee’s ordinary weekly pay as above, the pay must be calculated by the following formula:
a − b
c
where:
- ‘a’ is the employee’s gross earnings for the four calendar weeks before the end of the pay period immediately before the calculation is made, or if the employee’s normal pay period is longer than 4 weeks, that pay period immediately before the calculation is made, and
- ‘b’ is the total amount of payments which are not included (as above), and
- 'c' = 4
To work out average weekly income, you’ve to add together all of your gross weekly earnings from all your employments for the 26 weeks out of the relevant 52-week period during which you’ve earned the most money. (The relevant 52-week period is the period ending just before the child’s due date/birthdate or the date the employee or their partner becomes the primary carer of the child under 6 years.)
The weeks do not have to be together, for example, some of the weeks where you’ve earned the most might be in April-May, some in July, some in October, with the rest in December-February etc., but they must have a total of 26 weeks’ worth.
This total is divided by 26 to get the average weekly income.
Self-employed people choose whether their average weekly income is calculated over a 6 or 12-month period. Over a 12-month period, your average weekly income is 1/52 of your net income from self-employment over the last 12 months (ending just before the child’s due date/ birthdate or the date you or your partner become the primary carer of the child under 6 years). Over a 6-month period, the person’s average weekly income is 1/26 of the person’s net income from self-employment over the last 6 months (ending just before the child’s due date or the date you or your partner become the primary carer of the child under 6). Net income for a period is the difference between the gross income and total deductions. If you were not working because you were:
- entitled to a payment of weekly compensation under the Accident Compensation Act 2001, or
- on parental leave before the expected due date of the child, or
- unable to work because of any other circumstances that are considered by a Labour Inspector not to disrupt the normal pattern of your self-employment,
then the divisor (the number of weeks the net total income from self-employment is divided by, usually either 52 or 26) is reduced by the number of complete weeks you were not working.
Who can get parental leave payments
Employees
If you’re an employee, to get parental leave payments you must:
- be going to be the primary carer of a child under 6 years (through giving birth or otherwise taking permanent primary responsibility for the care, development and upbringing of the child, (For example through adoption, whāngai, or similar permanent arrangement), and
- have been employed as an employee (this does not have to be for the same employer) for at least an average of 10 hours per week over any 26 of the 52 weeks just before:
- the baby’s due date (if the child is being born to you or your partner), or
- in any other case of a child under 6 years, the date when you or your partner becomes the primary carer of the child.
This eligibility test is different from the 6 and 12-month criteria for eligibility for parental leave. This means that some employees who are not eligible for parental leave can still get parental leave payments (as long as they are not working).
What being employed includes:
If you would normally have been at work for an hour (or hours) but were absent due to the reasons listed below, this time is still counted as being employed for that hour (or hours). If you were:
- absent on leave with pay
- on leave without pay (other than parental leave) with the employer’s agreement entitled to an ACC payment for that hour, or
- on volunteers leave
- a pregnant employee who is on primary carer leave before the expected due date for that hour (excluding any primary carer leave taken for a different child in the past 6 months), or
- absent for any other reason that does not disrupt their normal pattern of employment, in the view of a Labour Inspector.
Self-employed
If you’re self-employed to get parental leave payments, you must:
- be becoming the primary carer of a child under 6 years (through giving birth or otherwise permanently becoming primarily responsible for their care, development and upbringing for example through adoption or home for life), and
- have been working in self-employment for at least an average of 10 hours a week over any 26 of the 52 weeks just before:
- the baby’s due date (if the child is being born to you or your partner), or
- in any other case of a child under 6 years, the date when you or your partner becomes the primary carer of the child.
What being self-employed includes:
For the purposes of parental leave payments, self-employed means you must have been working, doing one or more of these things (but not as an employee):
- providing goods or services for hire or reward under a contract for services
- carrying on a business (including a profession, trade, manufacture, or undertaking carried on for profit), including in partnership with another person
- working for a trust in a business carried on by the trust.
You can be doing more than one type of work when you are self-employed, for example, gardening and beekeeping.
A self-employed person is counted as having been self-employed for an hour if the person:
- is entitled to a weekly payment under the Accident Compensation Act 2001
- is on parental leave before the expected date of delivery of the child
- is unable to work for any other reason that a Labour Inspector considers would not disrupt the normal pattern of the person’s self-employment.
Accident Compensation Act 2001 - ACC New Zealand(external link)
You can only get parental leave payments while you are not working, but because of the differences between the nature of employment and self-employment, it is expected that a self-employed person:
- would still do occasional administrative duties such as signing off the wages or monthly account reconciliations and GST returns, but
- would not be working regularly.
A self-employed person may receive income during the parental leave payment period if the income was earned before the parental leave payment period started or is because of work undertaken by other people in the business.
Examples of other situations
If you worked as a self-employed person and an employee during the last 6 or 12 months, you could apply separately as an employee and a self-employed person as long as you meet the criteria for each. The total payment you get from both cannot be more than the maximum amount.
For example, you worked as an employed carer at a rest home and also provided weekend respite care as a self-employed person from time to time.
Members of the Armed Forces in New Zealand or overseas are generally treated as if they were employees of the Chief of Defence Force for parental leave payments and if their conditions of service set by the Defence Act 1990 were their employment agreement. However:
- there is no employer obligation to notify them of their parental leave payment entitlements, and
- there is no restriction on their ‘employment agreement’ affecting their parental leave payment entitlement, and
- there is no restriction on their parental leave payment entitlement affecting their entitlements under their ‘employment agreement’.
If you’ve more than one child at the same time, for example, twins, you get the same amount of parental leave and parental leave payments if you had only one child.
You can get a Best Start payment per week for each new baby regardless of your income. An employee cannot get the Best Start payment and a parental leave payment for the same child or children at the same time. So, your Best Start payments will start when your parental leave payments end. For more information see:
Types of Working for Families payments - Inland Revenue(external link)
You can get parental leave payments for your next child, but there must be at least 6 months between the date you received a parental leave payment for your last child and the date you want a parental leave payment for your next child. You must also meet all the criteria for a parental leave payment each time.
In surrogacy situations, both the birth mother and the new primary caregiver are fully entitled to primary carer leave and parental leave payments (if they meet the eligibility criteria). The birth mother's entitlements do not end when she hands over care of the child.
Preterm baby payments
Preterm baby payments may be available if a baby is born before the end of 36 weeks gestation. These payments are in addition to parental leave payments.
You may be able to get preterm baby payments in addition to parental leave payments if:
- you’re caring for a baby who was born live before the end of 36 weeks’ gestation, and
- you’re eligible for parental leave payments.
Duration
The preterm baby payments are available for a continuous period of up to 13 weeks. It is paid at the same rate as the parental leave payment.
Start date
The preterm baby payment period can start from:
- the date the baby is born if the baby is born to you or your partner, or
- otherwise, on the day you become the permanent primary carer for the child.
End date
The preterm baby payment period ends on the earliest of:
- the date that would have been the end of the 36 weeks gestation had your baby not been born early, or
- the date you returned to work as an employee or a self-employed person, or
- the date you stopped being the primary carer of the child (unless you are the birth mother of the child).
Applying for a preterm baby payment
An application for a preterm baby payment is done through Inland Revenue in the same way and on the same form as applying for the parental leave payment. You must apply before the baby’s first birthday (or before the applicant has had permanent primary responsibility for the child under 6 years, for 12 months).
Preterm baby payments for people getting parental leave payments
Employees and self-employed applicants will need to contact Inland Revenue so that they can get the right entitlements, if:
- the applicant has already applied for parental leave payments and the baby is born before 37-week gestation and the applicant may be able to get a preterm baby payment (for the same child), or
- the applicant is already getting parental leave payments (for the same child) and the baby is born before 37 weeks gestation. If the applicant gets preterm baby payments, parental leave payments will stop and then start again when your preterm payments end (as long as you have not used up all of your 26 weeks of parental leave payments and you still qualify).
Preterm babies and paid parental leave – Inland Revenue(external link)
Applying for parental leave payments
Employees and self-employed people apply for parental leave payments through Inland Revenue. You must apply before the earlier of 12 months since the child's arrival, or when you return to work. You must apply for paid parental leave payments:
- before their baby’s first birthday if you or your partner gave birth to the child, (or otherwise before you have had permanent primary responsibility for the child under 6 years for 12 months), and
- before you return to work (other than for keeping-in-touch days).
What happens while on parental leave and your return
Applicants need to apply for parental leave payments (and preterm baby payments) as soon as possible to make sure their family does not miss out.
Employees often apply for parental leave payments when their employer has agreed to their leave arrangements.
If the baby has not been born when an applicant applies, you can use your due date of delivery on their application form as the expected start date for the parental leave payment period.
If necessary, you can apply for parental leave payments (or preterm baby payments) after the child arrives, or after the start of the period. In this case, the payment period start date will be backdated to the date that the child was born, or you became the primary carer of the child. Applications submitted more than 22 weeks after their baby is born will be paid as a lump sum.
If you take paid leave (such as annual holidays) at the start of your parental leave period, the parental leave payment period start date would be backdated to the day after the paid leave ends. Find out more on the Inland Revenue website.
Paid parental leave – Inland Revenue(external link)
Application
You need to send your application for parental leave payments to your Inland Revenue myIR account.
Apply for paid parental leave – Inland Revenue(external link)
Transferring parent leave payments
Parental leave payments are payable for 1 continuous period of up to 26 weeks. You can transfer some or all your parental leave payments to your partner.
If you transfer your payments once you start receiving them, you cannot transfer them back again. If your partner needs to return to work early, the parental leave payments will end. Any further parental leave payments will be lost.
If you transfer your payments before your payment period starts (which may be before you receive the first payment), you will be able to transfer them back again. That means if your partner needs to return to work early, they can transfer payments back to you before they return.
The rules for transferring parental leave payments are not the same as the more flexible rules for sharing parental leave.
If you choose to transfer some of your parental leave payments, you can choose to do so when you apply, or by completing a transfer request.
Transfer your paid parental leave - Inland Revenue(external link)
Make sure that all the information in your application and the supporting documents are complete and accurate. It’s an offence to give inaccurate information or hold back relevant information with the intention to mislead when making an application. Employers are required to give their employees information about parental leave payments. They should use the following notice.
Notice for employees about tax payer funded leave entitlements [PDF, 462 KB]
Best Start payment
You can also look into the Best Start payment, a weekly payment is available per child for a baby born on or after 1 July 2018. After the first year, you may continue to receive Best Start payments based on your income and family situation until the child turns 3 years old.
If you’re planning to get paid parental leave, then your Best Start payments will start once their paid parental leave payments end. The Inland Revenue website has information on the 4 types of tax credits that you may be entitled to.
Working for families tax credits – Inland Revenue(external link)