---
title: Managing Payroll for the Employee Returning from Parental Leave
description: When employees return from parental leave, their workweek could look different. Here is how to keep your payroll updated and annual leave compliant.
---

[Skip to content](https://help.thankyoupayroll.co.nz/en/payroll-for-employee-returning-from-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)

# Managing Payroll for the Employee Returning from Parental Leave

## When the employee returns from parental leave, their workweek could look different to before they left. Here is how to keep your payroll updated and annual leave compliant as things settle.

*Updated: November 2024*

**In this article**:

- [Changing Work Patterns and Hours Upon Return](https://help.thankyoupayroll.co.nz/en/payroll-for-employee-returning-from-parental-leave#PLReturn_WorkPatternChange)
- [Calculating Annual Leave](https://help.thankyoupayroll.co.nz/en/payroll-for-employee-returning-from-parental-leave#PLReturn_ParentalLeaveOverride)
- [Resources and Further Information](https://help.thankyoupayroll.co.nz/en/payroll-for-employee-returning-from-parental-leave#PLReturn_Resources)

**Follow these links to find out more about**:

- [Setting up Payroll for Parental Leave](https://help.thankyoupayroll.co.nz/en/managing-parental-leave?hsLang=en)
- [Managing Payroll while the Employee Is On Parental Leave](https://help.thankyoupayroll.co.nz/en/managing-payroll-during-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)

---

### Changing Work Patterns or Hours Upon Return to Work after Parental Leave

Often when an employee returns, they return to fewer hours or days per week.

- [Update the Employee Profile to the new work pattern](https://help.thankyoupayroll.co.nz/en/update-work-pattern-changed?hsLang=en) before you load their first pay on their return to work from parental leave. Remember to update both the '**Standard Pay**' tab and the '**Leave**' tab with the new information and **SAVE**.
- **Do not change start dates, sick leave balances, or anniversary dates**.

| ![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)   | Please contact our Customer Team to update the allocated leave balance (if any) to reflect the work pattern change. This is needed as a workweek now looks different for this employee and allocation is based on a workweek according to the Holidays Act. |
| --- | --- |

---

### Calculating Annual Leave

| ![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)   | Annual leave allocated during parental leave or in the 12 months after the parental leave period has ended, is calculated at the **AWE rate** for the 12 months immediately before the end of the last pay period before the leave is taken. \*This leave does not revert to the greater of OWP/AWE calculation, ever. |
| --- | --- |

- The employee is still entitled to their 4-week annual leave allocation, but this allocation will be calculated according to their [new work pattern](https://help.thankyoupayroll.co.nz/en/work-pattern-default-row?hsLang=en).

| For example: If the employee used to work 5 days a week, their allocation on their previous anniversary date was 20 days. (5-day workweek x 4 weeks leave = 20 days) When they return to work after parental leave and now only work a 3-day workweek, their entitlement to 4 weeks of annual leave is calculated based on their new work pattern. They will receive (3 days x 4 weeks) 12 days of allocated annual leave on that anniversary date. |
| --- |

- The payment calculation changes when the employee takes annual leave that **was allocated** during parental leave or in the 12 months following the parental leave period. The payment amount is determined by calculating **only the [employee's average weekly earnings (AWE)](https://help.thankyoupayroll.co.nz/en/awe-only-timesheet-parental-leave-override?hsLang=en)for the 12 months immediately before the end of the last pay period before the annual holiday is taken**. This is even if the leave allocated during this period is taken or paid out years later. 
    - This means that if an employee takes annual leave soon after coming back from parental leave the payment will be lower than if they took their leave after months have passed since their parental leave period has ended.
    - If the employer provides additional annual leave (an extra 5th week above the 4-week Holidays Act entitlement) this leave is by agreement and calculated according to the employment agreement. 
- Allocated leave before the parental leave period, and after 12 months since the employee's return to work is unaffected by this calculation change. This leave would continue to be calculated at the greater of OWP or AWE. 

![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)**Annual leave is always calculated at the time the employee takes their leave**. Please contact the Customer Team if you are unsure about [how to set the calculation rate at AWE for annual leave in a timesheet](https://help.thankyoupayroll.co.nz/en/awe-only-timesheet-parental-leave-override?hsLang=en).

---

### Resources and Further Information

- [Best Practice Tips for when an Employee Returns to Work - Employment NZ's website](https://www.employment.govt.nz/leave-and-holidays/parental-leave/managing-parental-leave-as-an-employer/covering-parental-leave-and-employees-returning-to-work#scroll-to-9)
- [Annual Leave Information - Employment NZ's website](https://www.employment.govt.nz/leave-and-holidays/parental-leave/managing-parental-leave-as-an-employer/covering-parental-leave-and-employees-returning-to-work#scroll-to-8)
- [Parental Leave and Annual Holidays - NZ Legislation](https://www.legislation.govt.nz/act/public/1987/0129/latest/DLM120699.html?search=sw_096be8ed81e5ea54_annual+holidays_25_se&p=1&sr=4)
- [Best Start - Information on Support for your Employee - IRD's website](https://www.ird.govt.nz/working-for-families/payment-types) 

- [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