If you have an employee going on parental leave, their time off can be recorded in much the same way as any other form of Leave Request in PayHero. This can be requested by the employee via the Employee Portal or Mobile App, or entered by the administrator in the Leave tab.
A parental leave request will be set to a default duration of the maximum 52 weeks entitlement, however the duration of parental leave an employee is entitled to may change depending on the circumstances. You should always consult with MBIE guidelines to ensure you manage your employees' entitlements correctly.
If an employee who is away on parental leave decides not to return to work following their period of parental leave, that employee's Finish Date becomes the day they went on parental leave (not the resignation date or end of a notice period).
Payslips
While an employee is on parental leave the Parental Leave pay item will be included in their pays. If the employee is on a salary their usual salary amount will be reduced to 0.
The button on the Parental Leave pay item can be clicked on to display the following pop-up, which provides an additional breakdown of the leave details for the pay period.
Annual Leave
When an employee is or has been on parental leave, an additional section can be found under their Leave tab. This Parental Leave section shows the start and end dates of the parental leave period as well as the Annual Leave Fallen Due field. This field is used to show any annual leave that the employee becomes entitled to whilst on parental leave, or in the following 12 months.
Annual Leave Rates
Special rules apply to the rates when your employee takes leave after their Parental Leave period.
Annual Leave Due Prior to Parental Leave
Any annual leave that was due to the employee prior to their parental leave will be paid, like usual, at the higher rate of the employees Ordinary or Average Weekly Pay Per Day. See our Annual Leave Rates support article for further details on these calculations.
Annual Leave Due During Parental Leave or in the 12 Months Following
Annual leave that becomes due while the employee is on parental leave, or in the subsequent 12 months following, will be paid at the employee's Average Weekly Pay Per Day. See MBIE's article here for additional details.
Editing Parental Leave
If your employee will be returning from Parental Leave earlier or later than expected, you can edit the leave entry as required.
To do so, navigate to the Leave tab. Scroll below the Calendar to the Leave Requests section, and click into the Parental Leave entry in question. You can then adjust the End Date.
If the End Date needs to be moved forward into a period included in a Sent or Draft pay, refer to our article: Why do time and leave entries show as Paid? for more information on doing so.
Employee Profile Icon
Employees currently on parental leave will have have an egg icon alongside their name under People > Employees to reflect their current parental leave status.
Frequently Asked Questions
When employees leave at the end of their parental leave, rather than returning to work, there are two possible scenarios you could run into:
- Employees who didn't cross their anniversary while on parental leave
- Employees who did cross their anniversary while on parental leave
In both cases, their final pay should be processed as though they finished before their parental leave, as noted by MBIE in this article ("your last day of work is the day you went on parental leave"). This is managed by creating a One Off Pay with the start and end dates set to match the employee's last pay before they went on parental leave, and setting that as their Final Pay.
In the case of an employee who did cross their anniversary while on parental leave, there is an extra step you need to take to roll back their anniversary so that you can correctly process their final pay as at the start of their parental leave. The steps for this are detailed below, and should be applied before adding the employee to the Final Pay:
- Download their Holiday Leave History Report
- Update their Current Leave Due to match what it was in their last pay before their parental leave
- Update their Holiday Earnings so that their Holiday Pay matches what it was in their last pay before their parental leave. This can be achieved by taking the 'Holiday Pay Due' figure from that pay and dividing it by 0.08.
Yes. Parental Leave is considered continuous employment, so employees should still accrue Sick Leave as normal when they cross their Sick Leave anniversaries.
MBIE has more information on this on page 71 of this Holidays Act guidance document.
Absolutely. To achieve that, navigate to Manage > Pay Items and create a new Other Earnings pay item with the following settings: 
You can then add that pay item to the Employee's Default Pay tab and specify the amount to process in each pay:
Note that the employee may need to be taxed at Secondary tax rates. Your employee should check this, and complete an IR330 tax code declaration form if needed.
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