Super When You Take Time Off Work: What Parents Should Know

Short answer

When you take time off work to raise kids — whether it's 6 months, 2 years, or longer — your super stops getting employer contributions. But here's the thing most parents don't hear: you don't have to just accept the gap. Government co-contributions, spouse contributions, and even tiny voluntary top-ups can do a surprising amount to protect your retirement savings while you're not earning.

Why the gap matters more than you think

Let's put some numbers to it. Say you earn $85,000 and take 12 months off work. At the current 12% super guarantee rate, that's $10,200 in employer contributions you miss — just for one year.

But the real sting is compound interest. A 30-year-old who misses one year of contributions doesn't just lose $10,200. Invested at a conservative 7% return, that gap grows to roughly $97,000 by age 65.

Nobody expects a 12-month break to cost nearly six figures at retirement. That's why even small actions during your time off make a real difference.

What your employer actually pays during leave

If you're on paid parental leave from your employer, good news: super guarantee still applies. Your employer must pay 12% on top of those payments, just like normal salary.

The gap appears with the government's Paid Parental Leave (PPL) scheme. As of July 2025, eligible parents receive up to 22 weeks at the national minimum wage — currently about $915 per week before tax — but no super is paid on top. The government has announced plans to add super to PPL from July 2025, with a phased rollout, but it's still catching up.

And if you take unpaid leave beyond that — which most parents do — super contributions stop entirely. That's where the options below come in.

Government co-contribution: free money from the ATO

If you made some income this financial year (even just a few months of work before leave) and your total income lands under $60,400, the government will match 50 cents for every dollar you put into super as an after-tax contribution, up to $500.

2025-26 thresholds apply. The ATO calculates it automatically when you lodge your tax return — you just need to make the personal contribution and make sure your super fund has your TFN.

This is especially useful if you worked part of the year before going on leave. Even a partial year of income may keep you under the threshold.

Spouse contributions: a tax break for the working partner

If your partner or spouse is still working while you're at home with the kids, they can contribute to your super and claim a tax offset of up to $540.

The rules are straightforward:

• You (the receiving spouse) must earn under $40,000
• The contribution can be up to $3,000 (the offset maxes out there)
• The offset is 18% of the contribution, capped at $540
• It phases out once your income exceeds $37,000

So if your partner puts $3,000 into your super, they reduce their tax bill by $540 and your retirement savings get a $3,000 boost. It's one of those rare win-win tax moves.

The power of small, regular contributions

You don't need to find thousands. Even $20 or $50 a week makes a measurable difference — and you can set it up as an automatic BPAY transfer so you don't have to think about it.

Here's what $50 a fortnight looks like over time, assuming 7% returns:

The takeaway is simple: starting earlier matters more than the amount. A 30-year-old contributing $50 a fortnight builds more than double what a 40-year-old builds with the same contribution.

And here's the thing about being a parent: your income usually recovers. The years where it dips are temporary. A small contribution during the dip smooths the curve — and compound interest handles the rest.

What about when you go back to work?

Once you're earning again, you've got another tool: carry-forward concessional contributions. If your super balance is under $500,000, you can use unused concessional cap amounts from the previous five financial years.

This means if you contributed very little during your leave years, you can make extra salary-sacrifice contributions later and claim the full 30% tax deduction (or 15% inside super) — effectively catching up on the years you missed.

Bottom line

Time off work for parenting is temporary. The super gap doesn't have to be permanent. A government co-contribution here, a spouse contribution there, and a small automatic transfer each fortnight — none of it feels huge in the moment, but run the compound maths and it adds up to real money at retirement.

You're already making sacrifices for your family. Your super doesn't need to be one of them.