There is some good news for parents considering starting or expanding their family.
Remember that announcement back in March about a bigger and better Paid Parental Leave scheme? Well, get ready because those changes kicked in on July 1st, 2024, and they’ll affect your employees’ entitlements and how you handle your payroll.
At Being Accountable Bookkeeping, we like to keep our clients updated with anything affecting their business and employees. We’ve broken down the key points in a way that’s easy to understand and how they’ll affect your business.
Increase in total leave available
The most significant change is the gradual increase in the total amount of Parental Leave Pay available to families. Previously, the scheme offered a maximum of 20 weeks. However, from July 1st, 2024, this has increased by two weeks each year, reaching a total of 26 weeks by July 1st, 2026.
This means employees expecting a child after July 1st, 2024, will be eligible for a longer paid leave period.
If you’re an employer, you’ll need to ensure your payroll system and record-keeping practices are updated to reflect these extended leave entitlements.
Changes to Parental Leave Sharing
The new scheme also encourages a fairer distribution of childcare responsibilities between parents. Previously, only two weeks of Parental Leave Pay were reserved specifically for each parent in a couple.
As of July 1st, 2024, this has increased to four weeks per parent on a “use it or lose it” basis. This means each parent will have a designated period they must take, promoting a more balanced approach to childcare within families.
Additionally, the number of days a family can take together has been doubled from two to four weeks. This provides greater flexibility for couples to decide how they want to structure their leave and spend time together as a new family.
Payroll considerations
For employers, there are some significant issues to consider:
- The increase in total leave and changes to sharing arrangements will undoubtedly affect your payroll processes. It’s crucial to ensure your system can accurately track and calculate Parental Leave Pay for extended periods and accommodate individual leave allocations for each parent.
- The ATO is expected to provide further guidance on the new scheme’s specific payroll implications in the coming weeks. Staying updated on the ATO website is essential to ensure compliance with the new regulations.
- It’s also advisable to communicate these changes clearly to your employees, particularly those expecting a child or planning to start a family soon. Providing them with a clear understanding of their entitlements and how to access Parental Leave Pay will help them navigate this important life event more easily.
The new changes to Australia’s Paid Parental Leave scheme offer significant benefits for families while requiring some adjustments to payroll procedures. By staying informed and updating your payroll systems accordingly, you can ensure a smooth transition and continued compliance with the new regulations.
Get in contact with us today.
If you’re unsure how to navigate the new Paid Parental Leave Scheme, call the professional team at Being Accountable Bookkeeping for a straight-talking explanation of how it will affect your business and what you need to do. Call or email us today.
