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Your guide to parental leave and superannuation

Jodie Humphries avatar
Jodie Humphries
- 4 min read
Your guide to parental leave and superannuation

While it may be difficult to plan for every financial decision, it’s helpful to understand how different life events may affect your financial future. When you’re working and eligible, your employer makes contributions to your super fund.

You may not be aware that if you take time off from your work to take care of a new baby, your employer doesn’t have to make contributions to your super. This break from super contributions may significantly impact your retirement savings.

What are the types of parental leave?

It's worth understanding the types of parental leave before exploring whether super is paid on parental leave. Parental leave falls under two categories:

  • Paid parental leave from employers

It is not compulsory for employers to offer paid parental leave to employees but often is offered by most employers. Usually, it is paid if you’ve worked for the company for 12 consecutive months, which can vary from one employer to another.

  • Government parental leave pay

If you meet the income test and don’t work during the leave period, you may be eligible. You will also need to register your child’s birth with your territory or state registry and meet the work test.

Does paid parental leave accrue super?

Neither the employer-paid parental leave nor the government parental leave pay includes super contributions. However, some employers may make paid parental leave superannuation contributions as an additional incentive to their employees.

Even today, Australian women take the majority of the primary parental leave to take care of their babies. With no super contributions during this period, women are more likely to have a lower balance at the time of retirement and would probably require government assistance like Age Pension during their post-retirement years.

This is one of the key contributors to the gender pay gap and the gender super gap

How to reduce the impact on your super balance during parental leave?

If your employer doesn’t make contributions to your superannuation while on paid parental leave, you can take the following measures to reduce its impact:

  • Splitting contributions with your partner

Pre-tax contributions can be split, and if you aren’t working, your partner can give you some part of their super during the year. If your spouse is working, they can also make a post-tax contribution to your super account.

  • Planning beforehand

If you know that you want to have children in the future, you can try to save extra before taking time off. Two ways to boost your super balance before parental leave are:

  • Salary sacrifice super contributions

You ask your employer to pay a certain amount from your pre-tax salary into your super account. This will be in addition to the super guarantee amount contributed by your employer. Salary sacrifice also reduces the tax on the assessable income.

  • Post-tax super contributions

These are voluntary contributions made to your super from your post-tax income. You can also make personal deductible contributions, which can be considered as a tax deduction if you’re eligible for the same.

  • Check the investment strategy

How you invest your super also impacts the future balance. You can choose from different investment options after understanding their risks and returns.

Superannuation on unpaid parental leave

Superannuation contribution entitlement applies to all types of unpaid parental leave, including maternity leave, special maternity leave, extended maternity leave, adoption leave, and other parent leave. However, the superannuation contribution is limited to a maximum of 12 weeks. The contributions are calculated as follows:

  • Actual leave taken or 12 weeks, whichever is lesser
  • Based on the amount that would have been paid if the employee had taken paid leave in accordance to the following:
    • Full-time employees – ordinary working hours at the time of commencement of the leave
    • Part-time employees – average hours worked during the 12 preceding months or ordinary working hours at the time of commencement of the leave, whichever is greater
    • Eligible casual employees – an average of the hours worked during the 12 preceding months
      The contributions will be paid into the employee’s superannuation fund.

Employer funded paid parental leave superannuation contributions may be used as incentives to attract and retain employees. Several employers may continue making super contributions to reduce the gender pay gap, but this will need to be discussed with your employer. 


This article is over two years old, last updated on March 25, 2022. While RateCity makes best efforts to update every important article regularly, the information in this piece may not be as relevant as it once was. Alternatively, please consider checking recent superannuation articles.

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This article was reviewed by Personal Finance Editor Alex Ritchie before it was published as part of RateCity's Fact Check process.

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