It’s been my first time being on maternity leave and I’m really enjoying not working so far and I feel very lucky to have my job protected for one year while I spend time with our new child. I was talking to a few friends who were visiting or who also were expecting overseas and became quite interested in their respective country’s maternity leaves and child care availability. As much as we gripe about the cost of childcare in Canada and the high cost of living but low parental benefits payout, I feel very fortunate not to have to think about child care for my 3 month old as I have to return to work.
Here’s what maternity leave looks like in four countries, if you’re curious like me.
Hong Kong Maternity Leave
In Hong Kong, the world’s most expensive city to live in, employees are known for their hard worth ethic and crazy work hours. People barely have time to cook and eat out all the time because by the time they finish work it’s around 7pm and many people only have Sunday off work, working six days a week is the norm. The maternity leave benefits are employer paid and lasts for10 weeks after birth. It is paid to about 80% of the annual income.
Childcare and hired help or nannies can be ‘live in’ (working 6 days a week) and cost around $700-$1000 a month. These domestic helpers can help with cooking, grocery shopping, child care, taking children to and from school or extracurricular activities, cleaning around the home etc.
sweden
In Sweden, the land of Ikea and H&M, yes the taxes are high but there are lots of benefits. From a country where it is law that you have some time off from your employer (you know 15 minutes or so) so you can take your pet dog out, as dogs are not allowed to be left alone for more than eight hours. For maternity leave, expect no less. The progressive and feminist policies allow for mothers to care for their new babies without worrying about saving up to have a family.
My friend is a dental hygienist and she has 18 months of paid maternity leave at 80% of her gross pay for yes, the full 18 months. This is paid for by the government and her job is protected. None of the maternity leave benefits are paid for by her employer so her employer is supportive of her leave.
Childcare is provided for children after the they are 18 months, they call it ‘nursery’ and it is only $100 a month. $100 a month, not almost $100 a day like it is in major cities in Canada.
$100 a month!
There is not much of a Motherhood Penalty in Sweden.
Canada Maternity Leave
It wasn’t always 12 months of paid leave for Canada, before it was only 6 months and before that it was even shorter (according to my baby boomer friends and acquaintances). Now it is 12 or 18 months for maternity leave in Canada.
In Canada if you are an employee and your earnings will decrease by more than 40% during maternity leave, you have worked more than 600 hours before applying for leave, you may be eligible for maternity and parental benefits. The first 15 weeks are maternity benefits and the next 35 weeks are parental benefits (can be taken by either the mother or the father but not both). The maximum amount that you will be paid is $543 per week (this value changes yearly depending on inflation etc.), or 55% of maximum insurable earnings. If you work during this period much of your earned money is clawed back and your benefit payout amount for that week may be taken away. Many employers offer a ‘top up’ from the amount EI (Employment Insurance) pays. For example, my employer offers a top up to 75% of my pay for about 6 months, and this is part of the benefits package for employees.
Recently the Trudeau Liberal government announced extended maternity/paternity leave to 18 months that might start for the year 2018. That is, you have the option of taking a leave for 18 months instead of 12 months and your job will be protected for when you return.
However, the amount paid out by EI (Employment Insurance) is the same as the amount paid out for 12 months, except it is stretched out over 18 months. The amount will be 33% paid out of maximum insurable earnings, so instead of $543 a week max you will get $362 a week.
For childcare, this is provincially regulated and different for each province and territory. In British Columbia, daycare is expensive and even more expensive the younger a child is (for example if under the age of one). Childcare costs anywhere from $1200 to $1800 a month for one child, at a licensed daycare facility. For those who do ‘family day care’ where the staff are unlicensed and there is a smaller adult to child ratio, the costs are less. Nannies are another option and I have a friend who is paying $40,000 annually for a nanny for four days a week.
With the costs so high for daycare, many parents consider staying at home instead of working, since half of that paycheque after taxes is going towards childcare.
We also have RESP which provides a 20% CESG match towards your child’s post secondary education.
If you work during maternity or parental leave your benefits get clawed back in Canada.
You can also qualify for the Canada Child Benefit too if your family net income is below a certain amount. The CCB gets paid out on a monthly basis.
United States Maternity Leave
In the United States employees are entitled to unpaid leave of 12 weeks to care for the birth of a child according to the Department of Labor with the FMLA (Family Medical Leave Act). Many women return to work soon after the birth of their child because they can’t afford to not go to work. Employers may pay for 12-18 weeks of leave depending on your benefits, for example, if you work for a large corporation.
My friend works in New York and she had 7 months of leave but can use her sick bank and vacation days, after the 7 months the FMLA kicks in (Family Medical Leave Act) where she is entitled to 72 days of non paid leave.
According to Time’s Money, the average American spends just under $200 a week on child care.
I’m no policy analyst, but looking at the different options for child care and for maternity/parental benefits was very interesting for me, and I’m currently trying to find a way to move to Sweden and get Swedish citizenship (just kidding, eh). That being said, with Sweden being a small country with a smaller population than places like the United States, it can be easier to offer benefits for citizens.
If you’re looking to understand how much a baby may cost in the first year or how to get free baby swag to cut down the costs, check out the aforementioned posts.
Readers, do you know of any other countries that have differing maternity/parental leaves and childcare situations?
GYM is a 30 something millennial interested in achieving financial freedom through disciplined saving, dividend and ETF investing, and living a minimalist lifestyle. Before you go, check out my recommendations page of financial tools I use to save and invest money. Don’t forget to subscribe for blog updates, a free dividend yield spreadsheet, and the free Young Money Bootcamp eCourse.
My wife’s job was protected for 3 months, but they only paid out 1 month (at 100%). The other 2 months were $0…
Now I was lucky to change to a job last year that offered 4 months 100% paid paternity! My wife took the first 3 months and I’m currently in my 4 months (until January 2nd). We always talk about how jealous we were of Canadians and their 1 year off lol. Hopefully this country gets it together and starts offering more, but honestly I see them taking away benefits for mothers before they extend them at this point…
@Gabe- Wow that’s so great! 7 months in total, and 4 months paid paternity! Your baby is very lucky to have daddy around 🙂 Did you guys go to Mexico yet?
The cost of raising a child in Canada is definitely not cheap. I have two young kids and the younger one will be in kindergarten next fall. I can’t wait. This childcare, camps, social programs and whatever programs you can think of is pretty expensive around Toronto.
If you have more than two kids, it’s not worth it for both parents to go to work. It’s probably more economical if one parent stays home.
@Leo- Yeah, I agree, I can’t imagine having 3! My mom had 4, I don’t know how she did it. She did quit her job after the 4th one was born though!
Let me know when you become a Swedish citizen, if we have another kid I’ll follow your lead. XD
That’s some great benefits they have in Sweden for having a baby. 18 months on leave and pay only $100 a month for childcare?! I could only wish they would have that type of paternity benefits in the US.
We were real fortunate my wife’s company topped off her pay when she was on leave because that State of California paid her about 55-60% of what she normally makes.
@Kris- Lol, deal! Apparently you just have to live there for 4 years and you get Swedish citizenship. My friend moved there to be with his girlfriend (now wife) and got his citizenship with no issues. That’s good that she got topped up to 100% and also got paid 55-60% of what she would normally make.
I don’t know the details but France has very good maternity and parental benefits, mostly for taking extended leave with or without pay. And you can get quite a bit of money the more kids you have (child tax benefits).
I don’t think EI in Canada is enough for parent’s to stay home. Not all employers have top ups, mine didn’t .
@Caroline- I was just reading today about the EI extension that will start by 2018 (the 18 month option)- I doubt many people will be choosing this option because it’s so much less per month. Without the top up it’s very difficult to stay home for the year. Ohhh France with a baby would be ammmmaaaazing… my dream- Provence. I think all the EU countries probably have some pretty good benefits, after all, they all have like 6 weeks of vacation to start, I think.
Wow I didn’t know H&M is Sweden!
So after reading your list, I realized the differences between each country. When I took maternity, I was off for 3 months. But it wasn’t fair because I had to use unpaid days just to save whatever PTO I had for doctor appointments when I go back to work. Plus, I had to work, I had bills to pay.
If I were to get pregnant the second time around, I’m not sure how it will work out. My paycheck pays for all the bills (minus the mortgage) and we have no babysitter. It will really hard if I don’t have my full pay. Thinking about that makes me sad lol. I would love to have a second one.
@Melanie- That doesn’t sound like an ideal situation, with having to have unpaid days for doctor appointments 🙁 It was so hard to take time off to go to doctor’s appointments- it would be nice if they were offered in the evening or something or on weekends more! It would be good to save up for the 3 months of leave without pay, but then there’s the other costs too. Having children isn’t frugal, that’s for sure! I hope you get to have a sibling for your cute son!
Is that dog stat about Sweden actually true?! That’s crazy (but also kind of awesome).
I don’t have any kids so haven’t had to deal with these issues yet, and the high cost of daycare in Canada is definitely one of the reasons. There has been a push in Alberta for more affordable daycare but it’s still in the early stages. I am glad I don’t need to worry as much about taking maternity leave and still having some money coming through the door. It’s such a backwards policy to not offer new moms maternity benefits and leave.
@Sarah- Believe it or not, yes! (Or that’s what my friend says anyways… they also have a mandatory ‘tea’ time. My friend is a dental hygienist and they close the office down and don’t take calls so everyone gets to enjoy tea together!!) Sounds like an awesome place to work. Also Denmark (my friend was telling me this too, I’m not sure if this is accurate) changed their working hours to end earlier, I think it was like 3:30pm or something, like a 6 hour workday.
I know, it really is 🙁 Daycare is so expensive in Canada! I think there’s a similar push for more affordable daycare in B.C. too.
Very interesting GYM, what I have experienced from moms in the US is that they take maternity leave and then at the end actually leave!
@DM- Yeah, I can see how that may happen, it happens here too! If childcare costs are more than your wage or close to eating up the entire salary it can be hard to justify staying in the workforce (though it would be very important to because it’s hard to get back into the workforce once you’re out).
We’re in the midst of my wife’s maternity leave in this, the most generous state of the US when it comes to such things (California). The state pays a disability benefit of 55% of your salary for up to four weeks before the due date, and six weeks after. You can then start your six weeks FMLA leave at the same 55% of salary, for a total of up to 16 weeks of maternity. The Disability payments are untaxed, but the FMLA ones are taxed.
Sucks compared to the rest of the world, but at least we’re doing a little bit better than the rest of the US. We’ve remarked on how few women take advantage of the whole duration, since so few working families can afford to be at 55% or less of their income for 16 weeks. Just another advantage to having your finances in order!
@The Vagabond- Congratulations on your little one! That is pretty good- really good compared to the other states (my friend is from New York). I didn’t know that it varies from state to state. I hope your wife is taking the full 16 weeks (I am pretty sure you are since you are a PF blogger)- cherish these moments, they are so special! Thanks for sharing your experience with maternity/ parental leave from California.
No problem, and thank you for the congrats! Waiting for baby V to make his or her appearance any day now! Yeah, California is kind of an outlier, most states aren’t even close… and California isn’t even that great compared to the examples you’re shown!
@The Vagabond- So exciting! Your lives will be changed forever with your new bundle of joy! (GET SOME SLEEP NOW WHILE YOU CAN and enjoy it and relish it)
The thing of it is, when you work for a small company, even those country standards don’t apply. By the same token though, I was able to “spread out” my maternity leave to 5 months thanks to working part time before that. Doesn’t work for everyone, but it was a better situation for both me and my employer. That said, I would LOOOOVE $100 nursery……
@Angela- Wow 5 months that’s really great 🙂 Thanks for sharing your mat leave experience from the US.
$200 a week for childcare? Hahahahaha what?! Where is that, a small town in Montana? Not slamming Montana, I’ve been there, it’s beautiful – but I live in a large city (Phoenix) and my coworkers/friends are paying $1000 MINIMUM a month for daycare/child care, and that’s like… if their kid is 3. The ones who have babies are paying at least $1500 a month from what they tell me.
@Melissa- Sorry those are the statistics hah, yeah doesn’t make sense to me either 🙂 In big cities and other HCOL areas… I don’t doubt that it’s $1000 a month and up and only if the child is over 3.
Nice to see what other country are doing and I am not impress with the canadian federal program … In Quebec, we have our provincial program and I have multiple choice and as a man I can have 75% of my salary for up to 28 weeks in the short program (25 parental and 3 dad weeks).
I guess I am lucky to be in quebec and not in an other province.
@TFT- That’s pretty good. The parental leave for the other provinces can be either the mother or father. The new budget 2018 seems to have some changes for Canadians and parental leave, I haven’t taken a closer look at it yet.