As new legislation rolls out across Australia, forward-thinking employers have an opportunity to turn what’s often seen as an obligation into a strategic advantage. Done well, parental leave can strengthen retention, boost engagement, and position your business as a place where people want to stay.
From July 2025, changes to the government-funded Paid Parental Leave scheme will bring increased entitlements, superannuation on leave, and more flexibility for families — all of which affect how businesses plan, communicate, and compete for talent.
For SMEs in particular, this is a chance to lead with confidence. Those who take action now won’t just keep up — they’ll set the standard.
In this blog, we break down what’s changing, what it means for your business, and how to respond in a way that supports both compliance and culture.
Why Company Paid Parental Leave Is No Longer Just a “Nice to Have”
Parental leave has long been treated as a compliance box to tick — a temporary disruption rather than a strategic asset.
But that mindset is shifting fast.
Today’s talent expects more than just minimum entitlements. They’re looking for workplaces that support whole lives, not just job descriptions — and paid parental leave or other parental leave benefits are a powerful marker of that commitment.
What was once a policy for new mothers is now a shared opportunity for all parents to step into caregiving roles. And as that shift gains momentum, the businesses that lean into it are seeing the rewards: stronger retention, deeper engagement, and reputations as employers of choice.
It’s no longer just about doing the right thing — though that matters. It’s about staying relevant in a workforce that values equality, flexibility, and wellbeing. Companies that embrace progressive leave policies signal a deeper cultural message — we see our people as people.
In a tight labour market, benefits like extended, flexible parental leave can set your business apart. They show leadership, not just compliance. And for SMEs in particular, they create a competitive edge that goes far beyond policy — building trust, loyalty, and long-term value.
Now, with further government reforms coming into effect, this moment of cultural change is being reinforced by legislative action. These aren’t just ideals anymore — they’re becoming the new baseline. Which means businesses need to ask themselves - are we ready for what’s next?
What These New Changes Mean for You as an Employer
From 1 July 2025, Australia’s government-funded Paid Parental Leave (PPL) scheme changed again. Entitlements will increase to 24 weeks, rising to 26 weeks in July 2026. For the first time, superannuation at 12% will also be paid by the government on these PPL payments — a significant change that reflects growing national focus on equity and long-term financial security for parents.
These changes present both a compliance shift and a cultural opportunity. And while the new government entitlements set a stronger national baseline, many employers are choosing to go further — offering their own company-paid parental leave options to support wellbeing, retention, and equity.
Government vs Company-Funded Leave: What’s the Difference — and Why It Matters
As these changes roll out, it’s essential to distinguish between what’s government-funded and what you, as an employer, may choose to offer in addition.
The increased Paid Parental Leave entitlements and the addition of superannuation payments are funded by the government — not your business.
However, many SMEs are stepping up by designing their own parental leave offerings that go beyond compliance and reflect their culture and values. These initiatives don’t just support employees — they strengthen your business too.
What Can Employers Offer? A Menu of Popular Company-Funded Options
Here are some flexible, strategic ways SMEs are enhancing their parental leave offering.
1. Top-Up Pay to Full Salary - Top up the government PPL so the employee receives their full base salary (instead of just the minimum wage).
2. Employer-Funded Paid Leave Beyond Government PPL- Offer additional company-paid leave at full pay after or alongside the government scheme.
3. Superannuation on Unpaid Leave - Pay super on additional unpaid parental leave (beyond the government scheme) to help close the gender super gap.
4. Return-to-Work Bonus - Offer a lump sum when an employee returns and stays for a period (e.g. 3–6 months).
5. Partner Leave (Secondary Carer Leave) - Provide paid leave for partners, not just birthing parents.
6. Flexibility and Phased Return - Support parents with options like reduced hours, compressed weeks or job-sharing.
7. Loyalty-Based Leave Enhancements - Scale benefits based on tenure.
9. Wellbeing and Support Inclusions - Practical, people-first touches like
- Parental coaching sessions
- EAP or counselling for new parents
- Gift boxes, milestone celebrations
- Annual “parent reset day” (1 paid day/year for family admin)
9. Inclusive “Parental Equity” Policy - Offer the same entitlements to all parents — birth, non-birth, adoptive, LGBTQIA+ — supporting modern families and diversity in the workplace.
Lead with Confidence — Preparing Your Workplace for What’s Next
You don’t need a massive HR department to lead with purpose and confidence. What you do need is a plan.
As these changes come into effect, now is the time to review your parental leave policy and ask the right questions.
- Are your entitlements up to date?
- Are your payroll systems ready for super on government PPL?
- Do your people know what they’re entitled to — and feel safe enough to use it?
Start by making sure your policy reflects both the legislative changes and your company’s values. Then consider how you might go beyond the basics by creating space for flexibility, shared caregiving, and a workplace culture where all parents feel supported — not just women.
Communication is just as important as compliance. Clear, proactive messaging with your team sends a powerful signal - We’re ready. We care. We’ve thought this through.
And if you’re not sure where to start — or how to make it happen — that’s exactly where Seed HR can help. From policy reviews to culture change strategies, we support SMEs to stay ahead of change with confidence, clarity, and care.
The Bottom Line
Parental leave is changing — and so are the expectations of your people. With new legislation on the way and a growing shift in workplace culture, now is the time to review your approach, update your policies, and create a workplace where both business and families can thrive.
When handled well, parental leave isn’t a disruption — it’s a strategic tool for building trust, improving retention, and standing out in a competitive market.
If you’d like support turning these changes into practical steps, Seed HR is here to help. Let’s make your policies work better — for your people and your business.