Tax Planning
Parental Leave Payments and Super Contributions: What Individuals Should Know
Starting 1 July 2026, government-funded parental leave payments will attract super contributions — how that works and what it means for your super-planning.
By NomadicTax Research Team • 5-8 min read • August 13, 2026
## New Rule: Parental Leave Payments as Concessional Contributions
As of **1 July 2026**, eligible individuals will receive super contributions paid by government on their **parental leave payment**, treated as **concessional contributions** to their super fund.([ato.gov.au](https://www.ato.gov.au/api/public/content/0-bc598107-7819-44fd-a84c-9ded73fe60b1?utm_source=openai)) These contributions will carry the legislated super guarantee rate (currently 12%) and be taxed in the super fund at **15%**, consistent with other employer SG contributions.([ato.gov.au](https://www.ato.gov.au/api/public/content/0-bc598107-7819-44fd-a84c-9ded73fe60b1?utm_source=openai))
## Who Is Eligible
- Individuals receiving **government-funded parental leave payments** under approved schemes.
- You must have a **nominated super fund**, or if not, one will be determined via a legislated hierarchy.([ato.gov.au](https://www.ato.gov.au/api/public/content/0-bc598107-7819-44fd-a84c-9ded73fe60b1?utm_source=openai))
- The contribution itself will **count toward your concessional contributions cap** in the financial year in which it is received.([ato.gov.au](https://www.ato.gov.au/api/public/content/0-bc598107-7819-44fd-a84c-9ded73fe60b1?utm_source=openai))
## Practical Impacts and Planning Tips
- For parents or carers planning parental leave in 2026-27: incorporate this into forecasts for your concessional contribution cap—other employer salary sacrifice or employer contributions may need adjusting.
- If you don’t yet have a chosen super fund, ensure you **nominate one**, or understand how the ATO’s hierarchy works in determining a fund for you.
- Because these contributions are taxed at 15% in-fund, the net benefit is similar to employer contributions, though total tax payable depends on your overall contributions.
## Example
> **Emma** takes 6 weeks of government-funded parental leave with payment of $8,000. The ATO adds a 12% SG-type super contribution to her fund: **$8,000 × 12% = $960**. This amount is taxed at **15% in-fund**, so approximately **$144 tax**.
>
> Emma’s **concessional contributions cap** for that year includes that $960. If other employer contributions or salary sacrifice also push her over the cap, she may need to manage other contributions to avoid excess cap penalties.
## Things to Check Now
- Confirm whether your parental leave payment scheme qualifies for this measure.
- Verify if your employer or the government has your nominated super fund details.
- Keep records of your parental leave payment, the super contribution made, and how it’s reported — for your tax return and super fund statements.
- Where applicable, coordinate with HR or services Australia to ensure correct super and personal information flows.
**Bottom line:** This change ensures that super is not lost for parental leave recipients — a significant win for equity. But because it interacts with existing caps and tax treatments, it’s wise to plan ahead.