If you’re self-employed, you work out your payments based on the income you earned over the previous 6 or 12 months.
How to work out your payments
Your paid parental leave payment is your ‘average weekly income’ ─ up to a maximum payment.
An average is used so you don’t miss out if your income changes from week to week.
Average weekly income
You can choose whether to work out your average weekly income over a 12-month or a 6-month period. In both cases, the period ends immediately before:
- For the person who gave birth or their spouse or partner: the baby’s expected due date or date of birth.
- For other primary carers: The date the child came into your care.
Choose one of these calculations:
Twelve-month period: Add up your net self-employed income over the 12-month period and divide the total by 52. This is your average weekly income (Option 1).
Six-month period: Add up your net self-employed income over the 6-month period and divide the total by 26. This is your average weekly income (Option 2).
You'll get more if you choose the higher average weekly income.
Your net income is your gross income (turnover) less expenses but before tax.
Maximum payment
Your maximum paid parental leave payment (before tax) is:
- $712.17 a week before tax for the 1 July 2023 to 30 June 2024 period
- $661.12 a week before tax for the 1 July 2022 to 30 June 2023 period
Self-employed and employee income
If you meet the work requirements as a self-employed person and also have employee income, we’ll include this income in the calculation.
Minimum payment
Your minimum paid parental leave payment (before tax) is:
2023-2024 tax year: $227 a week
2022-2023 tax year: $212 a week
Multiple births
Are you having more than 1 child at the same time (for example, twins)?
Your paid parental leave payments are the same, no matter how many children you have.
Self-employed electrician Huia is about to have baby number 3.
Huia started out learning her trade as an employee of Mac Awatere Electrical.
Early on, Mac saw Huia had potential, and supported her through her apprenticeship. When she qualified, Huia continued working for Mac because he gave her a variety of work and pushed her to build her skills and knowledge.
Four years ago, Huia took the plunge and went out on her own. Mac was sorry to see her go, but even now, throws jobs her way if he’s too stretched to do them himself.
Huia’s business has really taken off and she’s started specialising in installing alarm systems for inner-city businesses.
But now she’s going to put all that on hold (temporarily) when she stops work to go on paid parental leave ─ a totally different adventure!
Huia sent us her application, after working out her entitlement.
Huia’s average weekly income
Huia’s paid parental leave payment is her ‘average weekly income’ ─ up to a maximum payment.
First, she worked out her net income over the 12-month period ending on her expected due date.
She earned $41,600 and dividing by 52, she got an average weekly income of $800 (Option 1).
Next, she worked out her net income over the 6-month period.
She earned $16,900 and dividing by 26, she got an average weekly income of $650 (Option 2).
Huia’s paid parental leave entitlement
Huia chose the larger option (Option 1, $800) and realised the maximum of $712.17 applied to her.
That means Huia’s paid parental leave entitlement is $712.17 a week. As paid parental leave payments are paid fortnightly, she’ll get $1,424.34 (less deductions) paid into her bank account every fortnight.
Olivia owns a restaurant in Napier, which provides healthy takeaway meals to the lunchtime crowd wanting good quality food but without the big wait.
Business is booming and customers visiting on holiday keep telling Olivia they wished she had a restaurant in their town.
This year, Olivia decided to open a second restaurant in Palmerston North. She faced significant start-up costs, including advertising expenses and interest on a new bank loan.
Word of the exciting new restaurant is spreading, but turnover hasn’t yet reached Napier levels and Olivia’s latest tax return showed she’d made a business loss.
At the same time (as if she didn’t have enough on her plate) she discovered she was going to have a baby!
Just before baby’s expected due date, Olivia stepped down from her day-to-day role with the restaurant, leaving the business in her partner’s capable hands.
She applied for paid parental leave and ticked the 'running a loss' box on the online application form.
Olivia is entitled to the minimum paid parental leave payment of $227 a week (less deductions). As paid parental leave payments are paid fortnightly, Olivia will receive $554 (less deductions) into her bank account every fortnight.
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