Can I Be Paid Parental Leave if I am a Sole Trader?

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If you are a sole trader and are expecting or adopting a child, you might be thinking about parental leave. Being a sole trader can have numerous benefits including control, flexibility and simplicity. However, without a typical workplace structure, it can be hard to navigate through processes like parental leave. This article looks at whether you’re eligible for parental leave pay and how long you can claim it for. 

Can I be paid parental leave if I am a sole trader?

In short, yes you are not prevented from applying for parental leave if you are a sole trader. You need to ensure that you meet eligibility requirements which are that:

  1. You’re the primary carer of the newborn or adopted child
  2. You’re an Australian resident
  3. In the financial year before the date of birth/adoption or claim, you had an adjusted taxable income of $150,000 or less
  4. You’ll be on leave or not working from the time your caring duties begin until the end of you paid parental leave period
  5. You meet the work test

Work Test

To fulfil the work test, you have to:

  1. Work approximately 10 months out of the 13 months before your child is born or adopted
  2. Work at least just over 1 day a week in the 10 month period you worked
  3. Not take more than 8 weeks off between 2 working days

Parental Leave Pay (PLP)

Anyone who meets eligibility requirements can apply for parental leave pay from the Australian Government. The current payment rate is based on the national minimum wage of $740.60 per week before tax. You can claim up to 18 weeks. 

How do I apply for paid parental leave?

You can apply for PLP through Centrelink. This can be done through your MyGov account, and you will need supporting documents and other information. It is recommended that you make your claim 3 months before your child is adopted or born.  You can claim PLP up to 52 weeks after your child’s birth. However, there are repercussions for how much you can be paid if you claim after 4 weeks. 

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What about my business?

You can’t work as you would normally while you’re on parental leave. However, you can do small tasks to ensure you’re business is still operating while you’re on leave. For example, you’re able to organise replacement staff, organise repairs, pay a supplier and do other similar administrative tasks. If you start running the business or maintaining operations while you’re still on leave this could be considered returning to work. The result could be losing your PLP. 

Summary

Being a sole trader doesn’t prevent you from being paid parental leave pay, as long as you’re eligible and fulfil the work test. Ensuring you have processes and perhaps replacement staff to help you run the business while you’re on leave will prevent you from losing your payment. You can find an employment lawyer through our lawyer marketplace who can help you with employment contracts or other requirements. 

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