Maternity Benefit

Maternity Benefits, Paternity Benefits, Adoptive Benefits, and Health and Safety Benefits are all taxable but not subject to the Universal Social Charge and PRSI. How much tax you’ll pay on these benefits will depend on your circumstances and any tax reliefs and credits you’re claiming. The Department of Social Protection will pay the benefit without any deduction of tax but will notify Revenue of the amount to be counted for income tax purposes.

Maternity Benefit

If you pay tax through the PAYE system you’ll be in one of the following three categories:

1. You’re paid your full or partial salary by your employer and Maternity Benefit is paid directly to them

In this case, Revenue will reduce your tax credits and rate band to arrive at the tax payable on Maternity Benefits. Your employer will receive a revised Tax Credit Certificate and deduct tax, USC, and PRSI on the difference between the salary paid and Maternity Benefit.

2. You’re paid your full or partial salary by your employer and Maternity Benefit is paid directly to you

Revenue will reduce your tax credits and rate band and your employer will only deduct tax, USC, and PRSI on the exact salary paid by them.

3. You don’t get any salary on maternity leave and your Maternity Benefit is paid directly to you

In this case, Revenue will reduce your tax credits and rate band to account for the tax payable on your Maternity Benefit and send a revised Tax Credit Certificate to your employer. If your only income is Maternity Benefit you’ll probably pay very little or no tax (since your total tax credits will probably exceed your total tax liability).

If you’re due any pay on the usual payday, you may contact your employer to request repayment of any tax that may be due. Alternatively, when you go back to work after maternity leave, any refund of tax due can be calculated then.