Paid Parental Leave

Q: Is paid parental leave taxed in NZ?

Yes. Inland Revenue states that parental leave payments are taxable just like a salary or wage, and deducts PAYE from each payment before you get it. Child support and student loan repayments come off too, so what arrives in your account is a net figure. At the maximum rate of $811.05 gross on an M tax code with no student loan, that is about $675.92 a week.

Q: What tax code should I use for paid parental leave?

Use a main code such as M or ME where the parental leave payment is your main income. Use a secondary code starting with S for anything your employer pays you at the same time, such as a top-up, holiday pay, or keeping-in-touch hours. Using two main codes at once is the mistake that produces an end-of-year tax bill.

Q: Do I still get KiwiSaver employer contributions on parental leave?

From Inland Revenue, yes, if you ask for it. KiwiSaver deductions from parental leave payments are optional. If you choose to have them deducted, Inland Revenue also makes employer contributions of 3.5%. So opting out of the deduction costs you the employer contribution as well as your own, which is the part most people do not realise.

Q: Is paid parental leave the same as parental leave?

No, and they have different rules. Parental leave is time off work, managed by your employer. Parental leave payments are money, funded by the government and paid by Inland Revenue. You can be entitled to the payments without being entitled to the leave, for example if you have resigned or are self-employed, as long as you meet the work test and stop working.

What it pays, what comes off it, and which tax code belongs on it. Rates are those in force from 1 July 2026.

Paid parental leave is $811.05 gross a week at the maximum, for 26 weeks, from 1 July 2026. It is taxed exactly like a salary, so Inland Revenue deducts PAYE before paying you. KiwiSaver is optional on it, and if you opt in Inland Revenue also pays 3.5% in employer contributions.

The rates in force from 1 July 2026

These figures change on 1 July, not 1 April, so they do not move with the tax year and are not affected by a change to tax rates.

New Zealand parental leave payment rates, 1 July 2026 to 30 June 2027
What	Amount	Note
Maximum weekly payment	$811.05	Gross, before tax and deductions
Self-employed minimum	$239.50	10 hours at the adult minimum wage
Length of the payment period	26 weeks	One continuous period
Preterm baby payments	Up to 13 weeks	Additional, at the same rate, before 36 weeks' gestation
Maximum for the whole period	$21,087	Gross, at the maximum weekly rate
Previous year's maximum	$788.66	1 July 2025 to 30 June 2026

The self-employed minimum is not a separate figure Inland Revenue invents. It is 10 hours at the adult minimum wage of $23.95, which is why it moves every 1 July when the minimum wage moves.

How your weekly amount is worked out

As an employee, it is the greater of two figures, capped at the maximum:

Ordinary weekly pay, what you are paid for an ordinary working week. This is the same measure the holiday pay calculator uses.
Average weekly income, the highest earning 26 weeks in the 52 before your due date, divided by 26. The weeks do not have to be consecutive, which works in favour of anyone with irregular hours.

On an ordinary weekly pay of $640.00 and an average weekly income of $700.00, the entitlement is $700.00: the greater of the two, and below the cap. Anyone whose greater figure exceeds $811.05 receives the cap instead.

At the maximum rate, gross to net

1.Weekly entitlement, grossCapped, because ordinary weekly pay exceeds the maximum$811.05
2.PAYE deducted by Inland RevenueOn an M tax code, no student loan, no KiwiSaver deduction− $135.13
Reaches your account each week$675.92

Three payment types, three deduction paths, all at once

This is where parental leave gets expensive if you get it wrong, because you can easily have three kinds of income in the same weeks.

The parental leave payment. Use a main tax code, one starting with M, where this is your main income.
Employer top-ups, holiday pay, keeping-in-touch hours. These are taxed under the regular PAYE rules, so they need a secondary tax code. Using a second main code here is what produces the end-of-year bill.
Bonuses, commission, redundancy, maternity grants. These are lump sums, so they do not use a secondary code at all. Your employer taxes them as an extra pay.

KiwiSaver is optional, and opting out costs you 3.5% too

KiwiSaver deductions from parental leave payments are not automatic. You can ask Inland Revenue to deduct them when you apply, or later through myIR, and you can stop them at any time.

The part worth knowing before you decide: Inland Revenue states that if you choose to have KiwiSaver deductions taken from your parental leave payments, it will also make employer contributions of 3.5%. For those weeks Inland Revenue stands in for your employer. Turning the deduction off therefore forgoes two contributions, not one.

If you keep receiving salary or wages from your employer while on leave, they carry on deducting and contributing as normal unless you have a savings suspension. And if you are saving for a first home, check the withdrawal rules before pausing contributions, because a break can affect eligibility.

The work test

You qualify if you are the primary carer of a child under 6 and worked an average of at least 10 hours a week in any 26 of the 52 weeks before the due date, or before the date you became primary carer.

Several employers can be added together. Hours from each job count towards the same test.
Employee hours and self-employed hours cannot be combined. Five hours a week employed plus five self-employed does not qualify. You must pass the test on one basis or the other, though if you pass on both you can combine the income to work out the amount.
You need not be working when you apply. Eligibility looks backwards over the 52 weeks, so resigning does not remove it.
Some absences still count. Paid leave, agreed leave without pay, time on ACC and volunteers' leave all count towards the hours.

When payments start and stop

Payments run for one continuous period of 26 weeks and stop on whichever comes first: the day you return to work, including starting a new job, or the end of the 26 weeks. Keeping-in-touch hours do not count as returning to work, within limits. You must have stopped working before the payment period starts, so in practice you often stop work before the first payment arrives. Applying more than 26 weeks after the birth means the payments arrive as a lump sum.

Secondary taxThe code for the top-up your employer pays
KiwiSaver employer contributionThe contribution IRD takes over during leave
Tax code finderWhich code belongs on which income
Tax refundWhere a wrong code is settled
take-home pay calculatorThe net figure on any weekly amount

Common questions

How much is paid parental leave in NZ?

The maximum is $811.05 gross a week from 1 July 2026 to 30 June 2027. Employees get the greater of ordinary weekly pay and average weekly income, capped at that. The self-employed minimum is $239.50 a week, and payments run for 26 weeks.

Is paid parental leave taxed in NZ?

Yes. Inland Revenue states it is taxable just like a salary or wage and deducts PAYE before paying you. Child support and student loan repayments come off too. At the maximum $811.05 gross on an M code with no student loan, that is about $675.92 a week.

What tax code should I use for paid parental leave?

Use a main code such as M where the parental leave payment is your main income, and a secondary code for anything your employer pays alongside it. Two main codes at once is what produces an end-of-year bill.

Do I still get KiwiSaver employer contributions on parental leave?

From Inland Revenue, yes, if you ask. Deductions are optional, and if you choose to have them, Inland Revenue also makes employer contributions of 3.5%. Opting out costs you the employer contribution as well as your own.

Who is eligible for paid parental leave in NZ?

You qualify as the primary carer of a child under 6 who has worked an average of at least 10 hours a week in any 26 of the 52 weeks before the due date. Hours across several employers combine, and you do not have to be working when you apply.

Is paid parental leave the same as parental leave?

No. Parental leave is time off, managed by your employer. Parental leave payments are money, funded by government and paid by Inland Revenue. You can qualify for the payments without the leave, for example after resigning or when self-employed, as long as you meet the work test and stop working.

Where these figures come from

2026–27 tax year (1 April 2026 – 31 March 2027). Last verified 30 July 2026.

Secondary taxThe code for an employer top-up
KiwiSaver employer contributionThe 3.5% your employer pays
Holiday pay calculatorOrdinary weekly pay, which sets the entitlement
Bonus and redundancy taxWhy a bonus does not use a secondary code
take-home pay calculatorThe net figure on any gross amount