Super on Paid Parental Leave: The 2025 Change That Boosts Your Retirement

From 1 July 2025, the Australian Government pays a 12% superannuation contribution on government-funded Paid Parental Leave (PPL) payments. This is a landmark change that addresses one of the biggest drivers of the superannuation gender gap. Previously, parents (overwhelmingly mothers) received the PPL payment at the national minimum wage rate but with no super on top — meaning every week of parental leave was a week with zero super contributions.

Quick version: With PPL now at 24 weeks (increasing to 26 weeks from 1 July 2026), the super gap from a single period of parental leave could be $1,500 to $2,000 — and across multiple children, tens of thousands of dollars in lost retirement savings. The new super contribution applies to babies born or adopted on or after 1 July 2025.

It's paid by the ATO directly to your super fund after the end of the financial year.

The super contribution is 12% of the PPL payment you receive. For 2025-26, the PPL rate is $189.62 per day (the national minimum wage rate, Services Australia). Over 24 weeks (120 working days), the total PPL payment is $22,754.40.

The 12% super contribution on this is $2,730.53. From 1 July 2026, PPL extends to 26 weeks (130 days) and the rate rises to $200.94 per day, making the total payment $26,122.20 and the super contribution $3,134.66.

The daily rate depends on the financial year of each day of leave, so a period that runs across 30 June mixes the two rates. The ATO also adds an interest component on top of the 12% to make up for the wait; our guide to the Paid Parental Leave super contribution (PPLSC) shows how it is worked out. The super contribution counts toward your concessional contribution cap ($32,500), so keep this in mind if you're also salary sacrificing or making other deductible contributions in the same financial year. For most parents on leave, this will not be an issue as employer SG contributions stop during unpaid leave.

For the super contribution applies to anyone who receives government-funded PPL for a child born or adopted on or after 1 July 2025. It applies to both primary and secondary carers — PPL is no longer split into separate 'primary' and 'partner' payments. Of the total PPL entitlement, a portion is reserved for the partner (15 days for children born or adopted from 1 July 2025, increasing to 20 days from 1 July 2026, per Services Australia), with the remaining days shareable between parents.

Both parents receive the 12% super on their respective PPL days. The timing is important: the ATO pays the super contribution as a lump sum to your super fund after the end of the financial year in which you received PPL.

Effectively, you'll not see it arrive during your leave — it comes after 30 June. For PPL received in 2025-26, the ATO said it would start paying from July 2026. The ATO will use the super fund details linked to your Tax File Number. Make sure your super fund details are correct in myGov before going on leave.

Many employers offer paid parental leave above and beyond the government scheme. Whether you receive super on employer-funded parental leave depends on your employment contract, enterprise agreement, or employer policy. Under the Superannuation Guarantee, employers must pay SG on ordinary time earnings — and salary or wages paid during employer-funded parental leave are generally considered OTE.

Quick version: This means if your employer pays you your normal salary for 12 weeks of parental leave, they should be paying 12% SG on that salary. However, some employers argue that employer-funded parental leave payments aren't OTE because the employee isn't performing work.

The ATO's position is that if the payment is made under the terms of the employment and calculated by reference to the employee's ordinary hours pay, it's likely OTE. If you're unsure whether your employer is paying super during their funded leave, ask your payroll or HR department in writing. Check your super fund for contributions during the leave period.

So, the superannuation gender gap in Australia is approximately 25% — women retire with about $140,000 less super than men on average. Career breaks for parenting are one of the biggest contributors. A woman who takes two periods of 12 months parental leave (combining government and unpaid leave) on a $75,000 salary loses approximately $18,000 in super contributions from employer SG alone, before accounting for the compounding growth those contributions would have earned over 20-30 years.

The new PPL super contribution is a step toward closing this gap, but it's modest — about $2,731 per child for a 2025-26 birth (before the interest component) doesn't fully replace the SG that would have been earned on a full salary. If you're returning from parental leave, consider using salary sacrifice or the carry-forward unused cap rule to catch up on contributions.

If your total super balance is under $500,000, you can use unused concessional cap space from the past five years to make larger catch-up contributions.