Paid Parental Leave and being a mum in business
It’s a pretty common misconception that your employer is the one who pays you ‘maternity leave’ when you stop working to have a baby, but lets get things straight - this isn’t the case!
There are two types of leave you need to know about when you are going to have a baby.
Maternity Leave
This is a type of leave that requires your employer to keep your job open for twelve months while you have your baby, and it grows! Whether or not this is a paid type of leave depends on your employer - some companies generously top up your pay to the full amount for a number of weeks, others pay bonus amounts if you return to work after your maternity finishes, but there are loads of businesses who don’t pay anything. The NZ law provides your job must stay open and this is the minimum requirement your employer must meet.
Paid Parental Leave
This is where the money comes in! Paid parental leave is government-funded and paid through Inland Revenue, and it’s available to eligible employees and self-employed people.
If you meet the work and eligibility requirements, you can receive paid parental leave for up to 26 weeks. The amount you receive is generally based on your usual earnings, up to a maximum weekly rate set by the government.
The maximum rate is reviewed regularly, so rather than us giving you a figure that could quickly become out of date, you can check the current Paid Parental Leave rates directly on the Inland Revenue website.
Keeping your business going whilst being self employed
You can only get parental leave payments while you aren’t working, but because of the differences between the nature of employment and self-employment, it is expected that a self-employed person:
would still do occasional administrative duties such as signing off the wages or monthly account reconciliations and GST returns, but
would not be working regularly.
A self-employed person may receive income during the parental leave payment period, if the income was
earned before the parental leave payment period started
is because of work undertaken by other people in the business.
Keeping in touch with your business will not affect your parental leave payment. However, if you return to working regular hours for your business or cease self-employment before the 26 weeks payment period is over, your entitlement to parental leave payments will end.
How to apply for paid parental leave
You will need the following details:
your myIR logon details
your tax code
your bank account number
evidence from your lead maternity carer of your due date or the baby’s date of birth
You can log in via the MyIR portal. If you have registered for PPL in the past, select 'Apply for Paid Parental Leave' from your Paid parental leave account otherwise if this is your first time applying for PPL, after you’ve logged in to myIR, select the ‘I want to…’ tab then ‘Register for Paid Parental Leave’.
Disclaimer: this is general information only. Please reach out to Prosper Business for specific advice to your situation.