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 22 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 $183.74 per day (the national minimum wage rate). Over 22 weeks (110 working days), the total PPL payment is approximately $20,211.

The 12% super contribution on this is approximately $2,425. From 1 July 2026, PPL extends to 26 weeks (130 days), making the total payment approximately $23,886 and the super contribution approximately $2,867.

These amounts may vary slightly depending on the exact daily rate at the time. The super contribution counts toward your concessional contribution cap ($30,000), 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 each parent (currently 2 weeks each, increasing to 4 weeks from 1 July 2026), with the remaining weeks 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 later, typically in the second half of the following year. 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 — $2,425 per child 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.