How much parental leave can I afford to take?

There are many factors to take into account, and your finances are only one of them.

Starting a family may be one of the most exciting and life-changing things you’ll ever do. But before joining the world of parenthood, it’s a good idea to think about how long you’ll be able to take off work when your little one enters the world.

Everyone’s circumstances are different, and there are many factors to consider, both financial and personal. We’ve looked at some of these to help you make the decision that’s right for you and your family.

Weighing up the costs

On average, Australian mums take 32 weeks of parental leave1, while only 36% of dads take the government-funded two weeks off, although men may take leave in other forms, such as annual leave around the time of birth2.

Money is a key factor for most families, and with men in Australia earning about 20% more than women3, it’s not surprising that this comes into play as a consideration when deciding who takes more time out of the workforce.

So how do you work out what’s the right amount of time for you to take off?

Here are some financial considerations to look into:

1. Parental leave entitlements

Currently, if you’re earning less than $150,000 a year and are the baby’s primary carer, you may currently have access to 18 weeks of Parental Leave Pay from the Australian Government at the minimum wage — worth $672.60 per week before tax.4

The other parent may also be entitled to take two weeks of unpaid leave, and during this time may receive government-funded pay at the minimum wage.5 On top of this, some employers provide paid parental leave, which you can access as well as the Government scheme.

2. Reduction in household income

Going from two full-time incomes to one, or for single parents a full-time income to less or nothing (at least for some period of time) can be tough, especially with an extra mouth to feed and other additional expenses.

3. Child care costs

Returning to work means paying for child care – unless you’re lucky enough to have extended family who will take on this role free of charge. With child care costs in Australia ranging from $70 to $200 per day6, depending on where you live and the type of care you choose, you’ll need to factor this into your planning.

Carer or career?

But it’s not all about the money. When considering how much time you’ll take off, it’s also important to think about how much leave you’d take if money was no object. You may be surprised what you can make work once your priorities in life change.

Consider the questions below:

  • Is your career important to you? If so, think about the trade-offs between time off and time in the workforce. 
  • Would you like to be the primary carer for the majority of the time or share the responsibility equally with your partner? 
  • Is there a way that you could work from home so you can get the best of both worlds? Think freelance, consulting, starting your own small business.

Knowing the type of outcome you’d like to achieve will make it easier to plan your finances to make it happen.

We’re here to help

  • Our starting a family education module and our article on preparing for a baby financially both provide additional information to help you get ready for this important milestone. 
  • Adding another member to the family means your insurance needs will likely change, so this is something else to investigate before your family grows. Check out our insurance calculator as a first step.
  • To start putting some money aside for your goal of starting a family, discover a new way of banking with the AMP Bett3r account
  • If you need help getting your finances in order, speak to your financial adviser, or if you don’t have an adviser call us on 131 267 or use our find an adviser tool.

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Any advice in this page is general in nature and is provided by AMP Life Limited ABN 84 079 300 379 (AMP Life). The advice does not take into account your personal objectives, financial situation or needs. Therefore, before acting on this advice, you should consider the appropriateness of this advice having regard to those matters. AMP Bett3r Account is issued by AMP Bank Limited ABN 15 081 596 009, AFSL 234517. Consider the terms and conditions available on request by calling 13 30 30 or at and whether this product is appropriate for you. Fees and charges apply.

Although the information is from sources considered reliable, AMP does not guarantee that it is accurate or complete. You should not rely upon it and should seek qualified advice before making any decision. Except where liability cannot be excluded, AMP does not accept any liability for any resulting loss or damage.