Q.  I am shortly about to have my first child. How is my Maternity Benefit treated for tax purposes?

21.03.10

Maternity Benefit paid by the Department of Social and Family Affairs is not regarded as taxable income and is disregarded for all tax purposes (including levies, income tax and PRSI). Your employer may top up your Maternity Benefit payment while you are on leave and in this case any extra payment on top of the Maternity Benefit is taxable. In most cases when a woman's maternity leave is being topped up, the employer deducts the State payment from the employee's salary and pays the remainder, which is taxable, as normal.

However some employers may pay a full salary to employees who are out on maternity leave and recover the Maternity Benefit from the employees or directly from the Dept. In this case they may deduct the usual amount of income tax, levies and PRSI from your salary while you are on maternity leave. If this happened you may be due a repayment of the extra tax and PRSI paid. If your employer does not top up your Maternity Benefit your weekly/monthly tax credits will accumulate for the period of your maternity leave and you may be due a refund of some of the tax that you have already paid in that tax year. Time spent on maternity leave (including additional maternity leave) is treated as though you have been in employment. This means that you also accumulate annual leave and public holiday entitlements during your maternity leave.

Citizens Information: Buncrana 074 9363496; Carndonagh 074 9373741

Return to > Citizens Information