The Australian Government will begin paying superannuation contributions from 1 July 2026 for people who receive government-funded paid parental leave from 1 July 2025. This aims to improve retirement outcomes for parents, particularly women, who often experience reduced superannuation growth when they take time out of the workforce for parenting.

Paid parental leave super applies for parents of children born or adopted on or after 1 July 2025. The government contributes superannuation to the employee’s nominated fund at the superannuation guarantee rate of 12% (plus an interest component).

These super contributions aren’t paid at the same time as the paid parental leave income. The ATO will pay them after the end of the financial year when the parent received paid parental leave income. The first contributions are expected from July 2026, covering paid parental leave received during 2025–2026.

The contributions are taxed within the fund at 15% and count towards the individual’s concessional

contributions cap, in the same way as employer superannuation guarantee contributions.

Employers aren’t required to fund or process these super contributions, but they may still affect financial and workforce planning.

Workforce costs and retention planning

Government-funded paid parental leave super doesn’t appear in your payroll costs, but some employers may choose to pay super on employer-funded parental leave or expand existing entitlements to stay competitive. These decisions can influence remuneration strategy and budgets for 2026–2027.

Attracting and retaining employees

Paid parental leave benefits – including how employers top up or complement the government scheme – are increasingly visible to job seekers and staff. As you review year-end HR reports, check whether your parental leave offering remains competitive and clearly communicated.

Staff planning and communication

Employees who’ve taken or planned paid parental leave during 2025–2026 may ask whether they’ll receive super, when it will be paid and how it interacts with their existing super and caps. Clear internal guidance helps managers and HR answer questions confidently and plan for staffing and backfill arrangements.

Compliance clarity

There’s potential for confusion between employer- funded super (currently paid at least quarterly and not compulsory on employer-funded parental leave) and government-funded paid parental leave super paid annually by the ATO. Ensuring your policies and communications clearly distinguish between these two streams can help reduce misunderstandings.