How Paid Parental Leave Works in New Zealand
Paid parental leave (PPL) in New Zealand is a government-funded payment administered by Inland Revenue (IRD), not your employer. It provides income support to the primary carer of a new child for up to 26 continuous weeks. The payment covers biological parents, adoptive parents, whangai (informal adoption), and parents of children born through surrogacy.
Eligibility
To qualify for paid parental leave payments, you must:
- Have worked an average of at least 10 hours per week for any 26 of the 52 weeks immediately before the expected due date (or date of adoption/care)
- Be the primary carer of the child (only one person at a time)
- Be an employee, self-employed, or both
The 26-week work test can be met across multiple employers or a combination of employment and self-employment. It is separate from the 6-month and 12-month service tests that determine your entitlement to job-protected unpaid parental leave from your employer.
Payment Rates (from 1 July 2026)
| Rate | Amount | Applies To |
|---|
| Maximum weekly rate | $811.05 gross/week | Employees and self-employed earning above the cap |
| Minimum weekly rate (self-employed) | $239.50 gross/week | Self-employed parents (10 hours at minimum wage) |
| Payment duration | 26 weeks | Continuous period, paid fortnightly |
| Maximum total (at cap) | $21,087.30 gross | 26 weeks at $811.05/week |
The maximum rate is reviewed annually on 1 July to reflect changes in average weekly earnings. The minimum rate for self-employed parents is linked to the adult minimum wage (currently $23.95/hour from 1 April 2026).
How the Payment is Calculated
IRD calculates your payment as the higher of:
- Ordinary weekly pay (OWP): What you regularly earn per week, including regular allowances and productivity payments
- Average weekly income (AWI): The average of your best 26 weeks of earnings within the 52 weeks before the due date
The payment is capped at the maximum rate. If you have income from multiple employers, all income is combined. For variable earners, the "best 26 of 52 weeks" method ensures you are not disadvantaged by weeks with lower earnings.
KiwiSaver During Parental Leave
Since 1 July 2024, employees on paid parental leave can choose to continue their KiwiSaver contributions from their IRD payments. If you opt in:
- Your employee KiwiSaver contributions are deducted from your PPL payment at your chosen rate
- IRD matches the employer contribution at the current compulsory minimum rate (3.5% from 1 April 2026)
- This is a significant benefit: previously, no employer contributions were made during parental leave unless you were being paid by your employer
You can opt in or out through myIR. If your employer is topping up your pay during parental leave, they continue making employer KiwiSaver contributions on the top-up amount.
Leave Types and Duration
| Leave Type | Duration | Paid/Unpaid | Eligibility |
|---|
| Primary carer leave | Up to 26 weeks | Paid by IRD (if eligible) | 6 months service |
| Extended leave | Up to 52 weeks total | Unpaid (job protected) | 12 months service |
| Partner leave | 2 weeks | Unpaid | 6 months service |
| Keeping-in-touch days | Up to 64 hours | Paid by employer | Agreed by both parties |
Transferring Leave to Your Partner
The primary carer can transfer some or all of their remaining paid parental leave entitlement to an eligible spouse or partner. The partner must also meet the work test independently. Only one person can be the primary carer at any given time. The partner's payment is calculated based on their own earnings, capped at the maximum rate.
Tax and Other Considerations
- Paid parental leave is taxable income (use PPL tax code)
- If receiving employer top-up simultaneously, secondary tax code applies to the lower income source
- Annual leave continues to accrue during parental leave
- Sick leave entitlements carry over
- Your job must be kept open for the duration of your leave
- Personal grievance rights apply if the employer fails to comply
Regulatory Framework
- Parental Leave and Employment Protection Act 1987: Governs all parental leave entitlements
- Inland Revenue: Administers PPL payments (ird.govt.nz/paid-parental-leave)
- Employment New Zealand: Guidance on employer obligations (employment.govt.nz)
Related Calculators
Sources: Parental Leave and Employment Protection Act 1987 (legislation.govt.nz). IRD Paid Parental Leave guidance (ird.govt.nz/paid-parental-leave). Employment New Zealand parental leave entitlements (employment.govt.nz). IRD paid parental leave rate change effective 1 July 2026 (ird.govt.nz).
This calculator provides indicative estimates only and does not constitute financial, employment, or legal advice. Actual paid parental leave payments are calculated by Inland Revenue based on your specific income and employment history. Payment rates are subject to annual review. Consult IRD (ird.govt.nz) or Employment New Zealand for definitive eligibility and payment information.
