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Access Accountants Payroll: Set up paid parental leave

Paying paid parental leave to employees in payroll.

When an employee takes parental leave, you may need to process Paid Parental Leave (PPL) payments. This article explains how to set up and automate PPL payments in payroll.

Eligibility for Paid Parental Leave

Employees may be eligible for PPL if they:

  • Are the primary carer of a newborn or newly adopted child

  • Earn below the applicable income threshold

  • Are not working during the PPL period

  • Meet the required work test before the child's birth or entry into care

Note: PPL rates are set by the Department of Human Services and may change. Confirm the current rate before processing payments.

Step 1: Create a Paid Parental Leave pay category

  1. Go to Payroll Settings, Pay Categories.

  2. Create a new pay category for Paid Parental Leave.

  3. Set the Unit to Fixed (PPL is paid weekly, not hourly).

  4. Configure the settings:

    • Superannuation: Leave disabled unless your business chooses to pay super on PPL.

    • Payroll Tax: Select Payroll Tax Exempt.

    • Leave Accruals: Do not select Accrues Leave.

  5. Click Save.

Step 2: Add Paid Parental Leave to the employee

  1. Go to Employee File, Pay Rate.

  2. If the employee has a default pay category selected under Show in Pay Run, untick this option to prevent the regular payment from being included.

  3. Scroll to Additional Earnings Line.

  4. Click Add and select the Paid Parental Leave pay category created earlier.

  5. Enter the payment details:

    • Units: Number of weeks being paid in the pay run (for example, 1 for weekly or 4.33 for monthly).

    • Rate: Enter the current weekly PPL rate.

    • Super Rate: Leave as 0% unless required.

    • Note: Add a description if required (for example, Paid Parental Leave).

  6. Select All pay runs until the maximum amount has been reached.

  7. Enter the maximum entitlement amount.

  8. Click Save.

The system will automatically include the PPL payment in future pay runs until the maximum entitlement has been reached.

Step 3: Process the payment in a pay run

  1. Create a new pay run.

  2. Select the employee to review their earnings.

  3. The Paid Parental Leave earnings line will appear with 0 hours because it is a fixed pay category.

  4. Confirm the gross earnings are correct and process the pay run.

For the final pay run, the system will calculate a pro-rata amount if required to ensure the employee does not receive more than their entitlement.

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