Parental Leave

A simple explanation of parental leave is available on the website of the Australian Government Department of Human Services.

Simply put, the Government pays the employer in fortnightly or 6 weekly installments and then the employer pays the employee according to their normal pay cycle.

Everyone receives Parental Leave Pay at the same weekly payment rate. It doesn’t matter how many hours your employee was working or how much money they were earning before they went on leave.

From 1 July 2016, the rate of Parental Leave Pay is $672.60 per week, before tax.

Because Parental Leave is not accrued on an ongoing basis like annual leave, sick leave, or long service leave, there is no need to setup a Leave Type or process Leave Entries.

The ATO has defined Paid Parental Leave as a regular payment (i.e. not an Allowance) so you will need to set it up as an Earnings Type in Marlin HR as shown below and select $Amount as the rate so that you can enter the dollar amount rather than Hours.

How to set up an Earnings Type for Paid Parental Leave

From the menu toolbar, select System > Earnings.

If Parental Leave does not appear in the list, Click on the Add icon (green '+') and enter the appropriate details: as per the screenshot below.

Enter 'Parental Leave' in the Earnings Type Name field.

Optionally enter Pay Advice Comment (this will be displayed directly below the Earnings Type Name on the Pay Advice whenever this Earnings Type is used to make payment).

Tick the Active checkbox so that the new Earnings Type is available for use on payruns and can be applied to an employee as a Recurring Earnings Type in Employee Maintenance.

Leave the OTE checkbox unticked.

Select Salary and Wages as the ATO Income Type .

Select Paid Parental Leave as the Special Paid Leave Type.

Leave Other Payment Type as None.

Select $Amount so that you can enter the dollar amount on the payrun instead of Hours.

Select the General Ledger Expense Account (e.g. Salaries & Wages).

Click on the Save icon.

How to process Parental Leave on the Pay Run

Initialise the pay run as normal and select the employee.

Zero out the employee's Standard Hours, Time & Half and Double Time.

Click in Before Tax Allowances in the "This" column and then click on the +Add button.

Select the Parental Leave allowance from the drop down list and enter the appropriate amount.

Process the rest of the pay run as normal.