How does parental leave pay work?

Parental Leave (definition)

There are several types of parental leave available to employees. Employment NZ has more information about each type, along with an eligibility tool. Fortunately, processing parental leave in payroll is not complex. 

Employees can submit a Parental Leave Request, and PayHero will set the default duration to 52 weeks entitlement. Once the employer approves the request in payroll, employees apply for their paid parental leave payments through Inland Revenue. 

In the case when the employee does not return to work, the day they went on leave is considered the Finish date, rather than the resignation date or end of notice period. 

If an employee has Annual Leave due and they are about to go on Parental Leave, this needs to be paid out at the higher of their Ordinary or Average Weekly Pay Per Day. If the employee has Annual Leave added on to their balance when they are on Parental Leave, it will be paid at the Average Weekly Pay Per Day.

In PayHero, you’ll see an egg icon next to the employee’s name who is on Parental Leave.

Parental Leave


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