Parental Leave Cover Cost Calculator NZ 2026
This calculator works out what parental leave actually costs you as an employer, and the answer usually surprises people in both directions. The parental leave payment itself is not your cost: it is government funded and paid by Inland Revenue directly to the employee, up to $811.05 before tax a week from 1 July 2026, for a continuous period of up to 26 weeks. What you pay for is covering the work. You enter the weeks of leave, the weekly cost of your cover, any handover or overlap weeks where you are paying two people, the recruitment cost of finding the cover, and any voluntary top up or KiwiSaver you choose to keep paying, and it returns the total cost, the split between wages, on-costs and recruitment, and the cost per week of leave. Three things shape the number more than anything else. Handover is the quiet one: two weeks of overlap at both ends is four weeks of double-paying that rarely makes it into a budget. Cover often costs more per week than the person on leave, because a good fixed term candidate knows the role has an end date. And the leave period you need to cover is frequently longer than 26 weeks, because extended unpaid leave can run to 52 weeks in total. You also have to keep the job open: an employee returning from parental leave is entitled to the same position or a genuinely comparable one, which is why the cover has to be a properly written fixed term arrangement.
The parental leave payment itself is not in this figure: Inland Revenue pays it directly to the employee, up to $811.05 before tax a week. Over 26 weeks that is up to $21,087 of income the government funds and you do not.
How it works
Cover wages are the weekly cost of the cover multiplied by the weeks of leave plus any handover weeks, because during a handover you are paying two people for the same role. Any voluntary weekly top up you pay the person on leave is added for the weeks of leave only. On-costs apply employer KiwiSaver and the ACC work levy to that total, since the cover is an employee like any other. Recruitment and setup is added once. The cost per week of leave divides the whole figure by the weeks of leave rather than by the weeks you are paying cover, so it answers the question a budget actually asks: what does each week this person is away cost me. The government parental leave payment is deliberately excluded from the total and reported separately, because it is not your money.
Worked example
Someone takes 26 weeks of parental leave. You bring in cover at $1,500 a week and run a two week handover, so you are paying cover for 28 weeks, which is $42,000 in wages. Employer KiwiSaver at 3.5 percent and an ACC work levy of 0.67 percent add about $1,751. Recruiting the cover cost $3,000. The total is therefore about $46,751, which works out at roughly $1,798 for each week the substantive employee is away. Separately, Inland Revenue pays that employee up to $811.05 a week, up to about $21,087 across the 26 weeks, and none of that comes from you.
Related calculators
- Parental Leave: the employee's own entitlement and payment.
- True Cost of an Employee: the loaded cost of the cover.
- Employee Turnover Cost: what it costs if they do not come back.
- FTE: what the gap does to your headcount.
- Parental Leave Payments Guide: background on this topic.