Re: Maternity benefit and back to work
Taken off Gross Pay in the end
Found this on revenue website leaflet IT 22, revenue publication.
Treatment of Maternity Benefit
Maternity Benefit is not regarded as income for the purposes of the Income Tax Acts and should be disregarded for all tax purposes.
Whether the payment must be taken into account by the payroll office will depend on the particular circumstances or arrangements between employers and employees while employees are on maternity leave and in receipt of Maternity Benefit from the Department of Social & Family Affairs.
The treatment in specific situations is outlined below:
1. Employers who pay wages, salary, etc., to employees while out on maternity leave and recover the Maternity Benefit from the employees or directly from the Department of Social & Family Affairs
In such circumstances, only the difference between the wages, salary, etc. paid and the Maternity Benefit recovered is subject to tax and PRSI in the pay period.
2. Employers who pay wages, salary etc., to employees while out on maternity leave (top-up etc.) and the employees retain the Maternity Benefit
Where an employer pays an employee full or partial wages or salary while out on maternity leave and the employee retains the Maternity Benefit, tax and PRSI should be charged only on the full amount of wages or salary actually paid.
3. Employers who do not pay wages, salary etc., to employees while out on maternity leave and the employee retains the Maternity Benefit
If owing to the absence from work through maternity leave, the employee is entitled to receive no emoluments on the usual pay day, the employer shall, on application being made in person by the employee or his or her authorised representative, make such repayment of tax to the employee as may be appropriate, having regard to his or her cumulative emoluments at the date of the pay day in question and the corresponding cumulative tax.
Alternatively, on the employee's return to work after a period of maternity leave, any refund of tax, which may be due to the employee, can be calculated having regard to his or her cumulative emoluments at the date of the pay day in question and the corresponding cumulative tax. In this situation the employer should contact the employee's Regional Revenue Office to confirm that it is in order to make such a refund.
Of course an employer should not make a refund unless he/she is in possession of a current year cumulative certificate of Tax Credits and Standard Rate Cut-off Point in respect of the employee in question.