Managing public holidays that fall during parental leave is one of those payroll questions that trips up even experienced practitioners. The answer depends on what type of leave the employee is on at the time and the rules differ depending on whether they’re taking paid annual leave, unpaid parental leave, or receiving the Government’s Paid Parental Leave payment.
Here’s a plain-language guide to each scenario.
Q/ An employee is using their Annual Leave in conjunction with their unpaid parental leave. What should I do about public holidays?
If the public holiday falls during the period covered by paid annual leave, the leave period is extended by the public holiday as usual — but only for days the employee would normally have been required to work. The same rule that applies to ordinary annual leave applies here.
If the public holiday falls during the period of unpaid parental leave, no payment is required. The employee is on unpaid leave and the public holiday does not trigger any additional entitlement.
Q: The public holiday falls during the period when the employee is receiving the Government Paid Parental Leave (PPL) payment, but no other payment from us as their employer. What should I do?
The Government Paid Parental Leave payment is paid at a set weekly rate – currently $1,004.70 per week before tax (based on the national minimum wage, updated annually on 1 July). From 1 July 2026, eligible parents can access up to 26 weeks of government-funded Paid Parental Leave – increased from 24 weeks in 2025–26 and expanded progressively from 18 weeks in earlier years.
This payment does not change when a public holiday falls within the period. The employee will not receive any additional payment from the Government due to a public holiday, and the PPL period is not extended.
As an employer, you have no obligation to make an additional payment in this scenario, unless your company’s own parental leave policy says otherwise.
Note on super: For children born or adopted on or after 1 July 2025, the ATO pays a 12% superannuation contribution on the Government’s Paid Parental Leave payment. This is paid directly to the employee’s super fund after the end of the financial year. Employers do not need to calculate or pay this separately.
Q: The public holiday falls during a period when the employee is receiving payment under our company’s paid parental leave scheme. What should I do?
You’ll need to check your company policy carefully. Most employer-funded paid parental leave schemes are designed to provide a set number of weeks’ pay, and are not intended to be extended by public holidays falling within the period.
If your policy doesn’t address this specifically, you’ll need to seek internal advice and make a decision. It’s worth reviewing your policy to ensure it’s clear on this point — ambiguity here can create unnecessary disputes when employees are already navigating a significant life event.
In Summary
Scenario | Public holiday treatment |
Annual leave (paid) during parental leave | Leave period extended by the public holiday for days employee would normally work |
Unpaid parental leave | No payment required for public holidays |
Government PPL payment only | No change to payment; PPL period not extended |
Employer-funded parental leave scheme | Refer to company policy; typically not extended |
The key principle is straightforward: the type of leave determines the treatment. When in doubt, review your company policy and applicable award or enterprise agreement before making a call.
Thinking about outsourcing your payroll?
Parental leave calculations including how public holidays, annual leave, and government payments interact are exactly the kind of complexity that payroll specialists handle every day.
At Alltech, we manage payroll for 150+ businesses across Australia. Get in touch to find out how outsourced payroll works and whether it’s right for your business.