Parental Leave IRD Payments Increasing

From 1st July 2025 the parental leave IRD payments are rising to a maximum of $788.66 gross per week for eligible people.

Under the Parental Leave and Employment Protection Act 1987 (PLEPA) eligible employees are entitled to IRD payments equal to their normal pay capped at the above rate for up to 26 weeks.  The maximum total payments an employee can qualify for from the IRD is $20,505.16 for the duration of the term.
This maximum rate is reviewed by the Government annually and adjusted based on average weekly earnings.

Continuous Employment

For clarity, parental leave (Primary Carer Leave, Extended Leave etc) is unpaid by the employer by default. Again, depending upon eligibility the employee may be entitled to take up to 52 weeks leave in total, but it is unpaid by the business.

Remember that although parental leave can be for up to 1 year, the staff member remains an employee of the business throughout, and the period is deemed continuous employment. All usual leave balances remain in place and work anniversaries are still recognised just as if the employee was working. Thus, annual leave entitlements roll over as do sick leave entitlements.

KiwiSaver

Employer KiwiSaver contributions also stop if no salary or wages are being paid for this period. However, since July 1st 2024 employees can opt to continue with their KiwiSaver contributions out of their IRD payments, in which case the IRD will match the employer contribution.

* Note the default employer contribution figure rises from the 3% currently to 3.5% from 1 April 2026 and then 4% from 1 April 2028.

Keeping Intouch Hours (KIT)

IRD payments will stop when the employee returns to work, but there is an opportunity for the employee and employer to agree to undertake up to 64 hours of KIT during the Primary Carer Leave starting from 28 days after the child's birth. These worked hours do not constitute the employee's return to work and do not cause the IRD payments to cease.

Returning To Work

The obligation as the employer is to retain the same role for the person to return to. If the employee wants different hours or terms when returning this can be negotiated, but you do not have an obligation to change the role.

The employee is supposed to confirm in writing to the employer at least 21 days prior to their intended return to work date if it's anything different to what was prior agreed. If the employee decides not to return to the role their termination date is observed as the date they left to go on Primary Carer Leave, whether or not they undertook and KIT hours.