Tax and maternity benefit

[kiwifruit]

I am currently on maternity leave which is being paid by my employer, ie the welfare payment goes directly to them. I am of the understanding that the social welfare maternity leave payment is non taxable. If this is the case how do I go about claiming the tax I am paying back and also can I claim for the maternity leave I took in 2005? Any help will be greatly appreciated.

 

[ClubMan]

I am of the understanding that maternity leave payment from the company is non taxable.

No. Any salary payment is assessable for tax as normal. Maternity Benefit from SW is not taxable. In some cases employers pay salary net of MB so the SW MB "tops up" the salary to normal amount. In other cases they pay full salary but recover the MB payments from the employee. In the latter case you will end up paying more tax and PRSI than you should but can contact Revenue to sort it out if necessary. This is covered several times before in other threads.

 

[Trish2006]

You just have to make sure that your company actually committed to paying you your salary minus the benefit, as opposed to committing to making sure you had the same take home pay. In the first case you should end up with about €500 (assuming higher tax band) more per month because of the tax free aspect of the benefit, but your employers would be equally entitled to reduce their payment to you by €500 and still ensure that you have the same take home, because you get the extra €500 from not paying tax on the benefit.
I'm actually surprised more employers aren't doing this, many of them probably haven't realised it yet!

 

[Joe1234]

can I claim for the maternity leave I took in 2005?

If you have overpaid tax in 2005 as a result of not getting allowed for the social welfare tax free maternity benefit, then you should ask revenue to issue a P21 for 2005.

 

[ClubMan]

That alone may not result in any refund of tax unless you also pass them on any relevant info about what may have been overtaxed and why.