--- title: Setting Up Payroll for Parental Leave description: Parental leave is an extensive period of unpaid leave, bringing its own challenges to payroll. This article explains managing parental leave in our system. --- [Skip to content](https://help.thankyoupayroll.co.nz/en/managing-parental-leave#main-content) English Show submenu for translations [More support](https://help.thankyoupayroll.co.nz/en/kb-tickets/new?hsLang=en) ![TYP\_Logo-09-1.png\]](https://help.thankyoupayroll.co.nz/hs-fs/hubfs/TYP_Logo-09-1.png?height=40&name=TYP_Logo-09-1.png) Open main navigation Close main navigation - English Show submenu for translations - [More support](https://help.thankyoupayroll.co.nz/en/kb-tickets/new) - [Visit our website www.thankyoupayroll.co.nz](https://www.thankyoupayroll.co.nz/) [Visit our website www.thankyoupayroll.co.nz](https://www.thankyoupayroll.co.nz/) Kia ora! How can we help you? - There are no suggestions because the search field is empty. 1. [Help Centre](https://help.thankyoupayroll.co.nz/en?hsLang=en) 2. [Everything Leave](https://help.thankyoupayroll.co.nz/en/everything-leave?hsLang=en) 3. [Parental Leave](https://help.thankyoupayroll.co.nz/en/everything-leave?hsLang=en#parental-leave) # Setting Up Payroll for Parental Leave ## Parental leave is an extensive period of unpaid leave, bringing its own challenges to payroll. This article walks you through getting your payroll ready for the parental leave period. *Updated: November 2024* **In this article:** - [Parental Leave - What I Need To Know](https://help.thankyoupayroll.co.nz/en/managing-parental-leave#PL_Basics) - [Preparing Thankyou Payroll for Parental Leave](https://help.thankyoupayroll.co.nz/en/managing-parental-leave#PL_TYPSystemPrep) - [Resources and Further Information](https://help.thankyoupayroll.co.nz/en/managing-parental-leave#Resources_Parental) **Follow these links to find out more about:** - [Managing Payroll during Parental Leave](https://help.thankyoupayroll.co.nz/en/managing-payroll-during-parental-leave?hsLang=en) - [Payroll for the Returning Employee](https://help.thankyoupayroll.co.nz/en/payroll-for-employee-returning-from-parental-leave?hsLang=en) - [Payroll Exit for the Employee who Does Not Return from Parental Leave](https://help.thankyoupayroll.co.nz/en/payroll-exit-after-parental-leave?hsLang=en) --- ### Parental Leave - The Basics ![Info - Blue Block (1)](https://help.thankyoupayroll.co.nz/hs-fs/hubfs/KnowledgeBase/CalloutIcons/Info%20-%20Blue%20Block%20(1).png?width=52&height=52&name=Info%20-%20Blue%20Block%20(1).png) Parental Leave is a period of **unpaid leave**,  but is still considered continuous employment under the Holidays Act. **Do not terminate the employee in the payroll system**. #### Parental Leave Period There are 4 main kinds of parental leave, all unpaid by the employer, which your employee may apply for online through their MyIR. **The employer no longer needs to verify income for this application.** The period they qualify for is based on their period of employment directly before going on parental leave:  - Employees who have worked for you for six months (for an average of at least 10 hours a week) are entitled to take up to 26 weeks of unpaid parental leave. - Employees can take up to 12 months of Extended Leave if they have worked at least 10 hours a week for a year or more. All parental leave must be taken in the first year after the birth or adoption of a child under the age of six. In certain circumstances, parental leave may start before the birth. Parental Leave Payments are government-funded payments for up to 26 weeks and are outside of the employer's payroll.  Employees who qualify for parental leave payments can choose to first use other types of paid leave they have earned but not used, e.g. - [annual leave](https://help.thankyoupayroll.co.nz/en/adding-annual-leave-to-a-timesheet?hsLang=en) - [alternative days](https://help.thankyoupayroll.co.nz/en/perm-alt-leave-taken-timesheet?hsLang=en) - [special leave](https://help.thankyoupayroll.co.nz/en/custom-allowance-pay-types?hsLang=en) - [time off in lieu](https://help.thankyoupayroll.co.nz/en/toil-time-in-lieu?hsLang=en) The employee can choose to start their parental leave payment period after they have taken other types of paid leave - even if this is after the child's arrival. Allocated annual leave taken before parental leave will be calculated at the greater of OWP or AWE, as usual. ![Info - Blue Block (1)](https://help.thankyoupayroll.co.nz/hs-fs/hubfs/KnowledgeBase/CalloutIcons/Info%20-%20Blue%20Block%20(1).png?width=52&height=52&name=Info%20-%20Blue%20Block%20(1).png)Granting leave in advance ahead of parental leave is not advisable, as this could be overpaid. [When the employee returns to work](https://help.thankyoupayroll.co.nz/en/payroll-for-employee-returning-from-parental-leave?hsLang=en) after parental leave, their work pattern could change affecting allocation. Leave taken is also calculated differently. --- ### In the Thankyou Payroll System - Stop paying your employee on parental leave by [**not toggling them on**](https://help.thankyoupayroll.co.nz/en/how-do-i-run-a-pay?hsLang=en) in a pay run.  - Keep the employee toggled off when they are not being paid. The employee will not receive a payslip and, as you are charged per employee in a pay run, this will keep your costs down. We will not try to do payday filing for this employee's zero pay. - If you have **pay automation**, go into the **Employee Profile** - **Standard Pay Tab** and remove all entries from the '[**Default Standard Week**' row](https://help.thankyoupayroll.co.nz/en/work-pattern-default-row?hsLang=en). This will ensure that the employee is not included in a pay run.  **Remember to SAVE** this change. ![EmptyStandardPayRow](https://help.thankyoupayroll.co.nz/hs-fs/hubfs/KnowledgeBase/screensteps/Leave/EmptyStandardPayRow.png?width=547&height=122&name=EmptyStandardPayRow.png) - Take a screenshot of their**[Leave Liability Table](https://help.thankyoupayroll.co.nz/en/understanding-leave-liability?hsLang=en)** so you have a record of their leave balances before going on parental leave. This leave will continue to be calculated at the greater of OWP and AWE when taken upon the employee's return. - The system updates calculations and balances when timesheets are processed. Until this is done, their leave liability table will remain unchanged. --- ### Resources and Further Information If you are unsure of the employee's entitlement, please contact Employment NZ or seek other legal advice. Below are some links to further information: - [Parental leave eligibility](https://www.employment.govt.nz/leave-and-holidays/parental-leave/) - [Paid parental leave information](https://www.ird.govt.nz/paid-parental-leave) - [Parental leave and annual holidays](https://www.legislation.govt.nz/act/public/1987/0129/latest/DLM120699.html?search=sw_096be8ed81d7b415_annual+holidays_25_se&p=1&sr=4) ---   - [Getting Started](https://help.thankyoupayroll.co.nz/en/getting-started?hsLang=en) - [Login Experience](https://help.thankyoupayroll.co.nz/en/login-experience?hsLang=en#main-content) - [Quick Answers](https://help.thankyoupayroll.co.nz/en/login-experience?hsLang=en#quick-answers) - [Account Settings](https://help.thankyoupayroll.co.nz/en/account-settings?hsLang=en#main-content) - [Quick Answers](https://help.thankyoupayroll.co.nz/en/account-settings?hsLang=en#quick-answers) - [Business Account Settings](https://help.thankyoupayroll.co.nz/en/account-settings?hsLang=en#business-account-settings) - [User Profile Settings](https://help.thankyoupayroll.co.nz/en/account-settings?hsLang=en#user-profile-settings) - [Pay Support Settings](https://help.thankyoupayroll.co.nz/en/account-settings?hsLang=en#pay-support-settings) - [Account Integration](https://help.thankyoupayroll.co.nz/en/account-settings?hsLang=en#account-integration) - [Delink Account](https://help.thankyoupayroll.co.nz/en/account-settings?hsLang=en#delink-account) - [Employee Settings](https://help.thankyoupayroll.co.nz/en/employee-settings?hsLang=en#main-content) - [Quick Answers](https://help.thankyoupayroll.co.nz/en/employee-settings?hsLang=en#quick-answers) - [Importing Employees](https://help.thankyoupayroll.co.nz/en/employee-settings?hsLang=en#importing-employees) - [Tax Code Settings](https://help.thankyoupayroll.co.nz/en/employee-settings?hsLang=en#tax-code-settings) - [Work Pattern](https://help.thankyoupayroll.co.nz/en/employee-settings?hsLang=en#work-pattern) - [Student Loan](https://help.thankyoupayroll.co.nz/en/employee-settings?hsLang=en#student-loan) - [KiwiSaver](https://help.thankyoupayroll.co.nz/en/employee-settings?hsLang=en#kiwisaver) - [Child Support](https://help.thankyoupayroll.co.nz/en/employee-settings?hsLang=en#child-support) - [Personal Bank Accounts and Payroll Giving](https://help.thankyoupayroll.co.nz/en/employee-settings?hsLang=en#personal-bank-accounts-and-payroll-giving) - [Employee Payslips](https://help.thankyoupayroll.co.nz/en/employee-settings?hsLang=en#employee-payslips) - [Custom Pay Types](https://help.thankyoupayroll.co.nz/en/employee-settings?hsLang=en#custom-pay-types) - [Examples of Custom Pay Types](https://help.thankyoupayroll.co.nz/en/employee-settings?hsLang=en#examples-of-custom-pay-types) - [Processing Pays](https://help.thankyoupayroll.co.nz/en/processing-pays?hsLang=en#main-content) - [Quick Answers](https://help.thankyoupayroll.co.nz/en/processing-pays?hsLang=en#quick-answers) - [Timesheets](https://help.thankyoupayroll.co.nz/en/processing-pays?hsLang=en#timesheets) - [Special Pays](https://help.thankyoupayroll.co.nz/en/processing-pays?hsLang=en#special-pays) - [Cashing Up Leave](https://help.thankyoupayroll.co.nz/en/processing-pays?hsLang=en#cashing-up-leave) - [Enhancement Features](https://help.thankyoupayroll.co.nz/en/processing-pays?hsLang=en#enhancement-features) - [Everything Leave](https://help.thankyoupayroll.co.nz/en/everything-leave?hsLang=en#main-content) - [Quick Answers](https://help.thankyoupayroll.co.nz/en/everything-leave?hsLang=en#quick-answers) - [Annual Leave](https://help.thankyoupayroll.co.nz/en/everything-leave?hsLang=en#annual-leave) - [Public Holidays & Alternative Leave](https://help.thankyoupayroll.co.nz/en/everything-leave?hsLang=en#public-holidays-alternative-leave) - [Examples of Public Holiday Timesheeting](https://help.thankyoupayroll.co.nz/en/everything-leave?hsLang=en#examples-of-public-holiday-timesheeting) - [Sick Leave](https://help.thankyoupayroll.co.nz/en/everything-leave?hsLang=en#sick-leave) - [Bereavement Leave](https://help.thankyoupayroll.co.nz/en/everything-leave?hsLang=en#bereavement-leave) - [Family Violence Leave](https://help.thankyoupayroll.co.nz/en/everything-leave?hsLang=en#family-violence-leave) - [Parental Leave](https://help.thankyoupayroll.co.nz/en/everything-leave?hsLang=en#parental-leave) - [Leave Without Pay](https://help.thankyoupayroll.co.nz/en/everything-leave?hsLang=en#leave-without-pay) - [Final Pay](https://help.thankyoupayroll.co.nz/en/final-pay?hsLang=en#main-content) - [Employee Profile Archive](https://help.thankyoupayroll.co.nz/en/final-pay?hsLang=en#employee-profile-archive) - [Public Holidays](https://help.thankyoupayroll.co.nz/en/public-holidays?hsLang=en#main-content) - [Quick Answers](https://help.thankyoupayroll.co.nz/en/public-holidays?hsLang=en#quick-answers) - [Debts, Fines, Payments](https://help.thankyoupayroll.co.nz/en/debts-fines-payments?hsLang=en#main-content) - [Quick Answers](https://help.thankyoupayroll.co.nz/en/debts-fines-payments?hsLang=en#quick-answers) - [Reports](https://help.thankyoupayroll.co.nz/en/reports?hsLang=en) - [End of Financial Year](https://help.thankyoupayroll.co.nz/en/end-of-financial-year?hsLang=en#main-content) - [Quick Answers](https://help.thankyoupayroll.co.nz/en/end-of-financial-year?hsLang=en#quick-answers) - [Employee App](https://help.thankyoupayroll.co.nz/en/employee-app?hsLang=en) - [Contractors](https://help.thankyoupayroll.co.nz/en/contractors?hsLang=en) - [COVID-19](https://help.thankyoupayroll.co.nz/en/covid-19?hsLang=en) [![Chill listening crop-3](https://help.thankyoupayroll.co.nz/hs-fs/hubfs/TYP_Logo-09-2.png?width=129&height=24&name=TYP_Logo-09-2.png "Chill listening crop-3")](http://thankyoupayroll.co.nz) Help Centre Copyright © 2026, Thankyou Payroll