The one-off payment will allow fathers to be paid at the national minimum wage for each weekday during the fortnight taken off to spend with their child after birth or adoption.
It also applies to same-sex partners and is additional to 18 weeks paid parental leave for mothers.
The bill narrowly passed the lower house without amendment yesterday when the coalition sought to change it to make the payment payable by Centrelink instead of employers.
Opposition women's spokesman Michaelia Cash said the bill posed an extra administrative burden on small businesses.
Payments will start from January 1, 2013.