Paid parental leave in 2025: what you need to know

Paid parental leave has been a right in Australia since 2011, but it remains a hot topic in the country’s workplaces and a way for the best employers to differentiate themselves from their competitors. 

We explore the trends in paid parental leave today, and what all employers need to know as we move into 2025.

1. A lot of Australian parents get at least some form of parental leave or payment

The Commonwealth government pays eligible employed Australians up to 22 weeks at the national minimum wage when they become parents, through birth or adoption. This will rise to 26 weeks by 2026. It’s worth noting that not everyone gets access to the government scheme. They must meet the following criteria:

• Primary carer. The person claiming the payment must be the child’s primary carer.
• Work test. These include having been employed for 10 of the 13 months before the birth.

• Income test. The person claiming cannot have earned more than $150,000 in the financial year before the birth, or the making of the claim, whichever is earlier.

• Work test. The person receiving the payment can’t return to work during the payment period.

Those employees that don’t meet the criteria, may be entitled to receive a baby bonus. This isn’t tied to employment, but just to becoming a new parent. 

To be eligible for the baby bonus, you need to be receiving Family Tax Benefit A, and neither you or your partner must have claimed under the federal Paid Parental Leave scheme.   

2. Two-thirds of employers now offer paid parental leave

While the Commonwealth government may provide a minimum, most employers now offer their own paid parental leave entitlements, according to recent data from the Workplace Gender Equality Agency.

The agency found three out of every five employers now offer some form of paid parental leave. Of these, six percent offered more than 18 weeks. However, the most common length of paid primary carer’s leave was between seven and 12 weeks.  (23% of employers).

That said, there was still a gap between large and small employers. For organisations with more than 250 staff, 90% offered paid parental leave. However, for organisations with fewer than 250 staff, just 54% did.

There was also a disparity between typically “male” and “female” industries, with only 50% of companies in male-dominated sectors offering paid parental leave, while 75% in female-dominated sectors did.

3. Equality in parental leave is now common

That said, while there may still be a paid parental leave gender gap when it comes to sectors. For those that do offer paid parental leave, they increasingly offer the same for both parents, not just one.  

For instance, companies including Deloitte, PwC and Medibank have all introduced policies offering paid parental leave for all employees – moving away entirely from the concept of having just one “primary carer”.

This is part of a trend that recognises the growing importance of having both parents involved in a child’s early years – and one that is likely to filter through to smaller employees over time.

4. It’s getting longer (and more flexible)

Another trend in paid parental leave is that we’re getting more of it. As we noted at the start of the article, the government’s minimum scheme is expanding to 26 weeks by 2026. Many leading employers have started following suit, with some offering 26 weeks full pay or 52 weeks at half pay.

There’s also growing flexibility in how leave can be taken, with options to extend unpaid leave periods, as well as to take it in two hits, to allow a partner to use their leave too.

Companies are increasingly offering additional paid leave for:

• Pregnancy-related appointments
• Fertility treatments
• Miscarriage and pregnancy loss
• Partner leave for attending key appointments

The combination of employer and government schemes often allows parents to access longer overall leave periods, too, so that a parent can remain with the child for at least the first year of their lives, and even beyond. 

5. The break in savings is over

One factor that often impacts families where a parent is out of the workforce is a reduction in superannuation. That’s beginning to change on two fronts.

First, an increasing number of employers now offer super payments on top of parental leave. Second, from 1 July 2025 the government’s scheme will also provide super payments on top of the parental leave payment. 

Other benefits some employers offer to minimise the long-term impact of time off include:

• Return-to-work bonuses
• Childcare subsidies
• Flexible working arrangements
• Gradual return-to-work programs

6. Parental leave can be a key differentiator in attracting good talent

In an increasingly competitive job market, parental leave policies have become a crucial factor in recruiting and retaining the best talent.

Increasingly, candidates are actively comparing parental leave benefits when job hunting or when headhunted – especially millennials and Gen Z workers. In fact, a Deloitte survey found as many as 77% of employees said the amount of paid leave offered influenced their choice of employer. 

The same Deloitte survey also found 50% of employees would prefer more parental leave over a pay rise, indicating its value in employee retention.

Just as importantly,  comprehensive parental leave policies reflect a company’s commitment to employee well-being and inclusivity. Such benefits are seen as markers of a supportive company culture, enhancing employer branding.

For this reason, companies with good parental leave policies report:

• Higher employee engagement. Employees feel valued and supported, leading to increased engagement. 
• Improved diversity metrics. Inclusive leave policies support diverse family structures, promoting workplace diversity. 
• Success in recruiting senior talent. Family-friendly policies attract experienced professionals seeking work-life balance.
• Stronger employer branding. Would-be employees and customers perceive companies with robust parental leave policies as desirable and caring employers, enhancing their brand. 

Want more?

In 2025, paid parental leave will no longer be a nice to have, but an essential tool in attracting and retaining the best staff. 

If you’d like to find out more about building an effective and flexible paid parental leave policy in your workplace, get in touch with our team of expert HR consultants. 

Catalina Consultants is a Sydney-based outsourced HR team that will help your organisation and its people reach their potential.