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  • Paid parental leave (Australia)




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Australia only

Paid parental leave is a government scheme for eligible working parents. In some situations, the government pays money to the employer to pass on to the employee. This is the scenario we'll use below.

For the current rate of paid parental leave and its tax and super implications, seek advice from the ATO or the Department of Human Services.

Parental leave can be recorded in MYOB Essentials by setting up a new earning type so you can make the payments to the employee. Then when you receive the parental leave payments from the government, record these using a receive money transaction.

If our solution below doesn't meet your needs, you might need to discuss your options with an accounting advisor.


To set up and pay parental leave

To set up and pay parental leave 

  1. Go to the Payroll menu and choose Employees.
  2. Click the employee's name.
  3. Click the Pay items - earnings & deductions tab.
  4. Under Earnings, add a new earning called Paid Parental Leave and enter the applicable Rate and Amount. For clarification on which tax, super, leave and ATO reporting category options you should select for your circumstances, check with your accounting advisor or the ATO. Learn more about creating pay items.
    Here's an example:
    New earning called paid parental leave
  5. Click Save. The new earning is now listed for the employee.
  6. Click Save to save your changes.

When you pay the employee for parental leave taken

Enter the number of paid hours against Paid Parental Leave and reduce their Normal hours by the same amount.

Here's an example of 38 hours of paid parental leave and Normal hours reduced to zero.

38 hours entered against paid parental leave

To record the receipt of government payments

To record the receipt of government payments

When you receive a parental leave payment from the government, this needs to be recorded as a Receive money transaction into your wages expense account (the same account your wages are paid from).

Here's how:

  1. Go to the Banking menu and choose Receive money.
  2. In the Deposit into field, choose the applicable business bank account.
  3. In the Notes field, enter a description for this transaction.
  4. In the Allocate to field, select your wage expense account.
  5. Enter the Amount of the payment.
  6. Select the applicable Tax Rate. As no tax is involved, this will typically be NTR.
    Here's our example:
    example receive money transaction allocated to wage expense account
  7. Click Save.