Maternity benefit

Roselm

Hi,
I don't have any children yet but am in the planning stages and just looking at finances!!
I see maternity benefit is taxable. Does anyone know at what rate? Does it depend on your income?
Thanks

pwurple

It is taxed the exact same as other income. If your employer tops up to your usual wage, then you will see no difference.

If there is no topup, the amount of tax all depends on your income, whether you are paid anything by your employer, whether you take unpaid or not, how your leave falls (spread across two tax years, or all in one), whether you transfer tax credits to your husband.

Basically, if you pay the top rate of PRSI and have no top-up, you get completely screwed over and end up with the lowest net maternity benefit. (not that i'm bitter! )

Penny Dreadful

Maternity benefit is €230 and after tax I got €210 per week. My employer topped up the rest and so I ended up with the same amount of money each month as when I was working. If the benefit wasn't taxed ID have been slightly better off.

Lucuma

it's either taxed at 20 or 40 % depending on your income that year.

Lady is a tramp

pwurple wrote: »

It is taxed the exact same as other income. If your employer tops up to your usual wage, then you will see no difference.

If there is no topup, the amount of tax all depends on your income, whether you are paid anything by your employer, whether you take unpaid or not, how your leave falls (spread across two tax years, or all in one), whether you transfer tax credits to your husband.

Basically, if you pay the top rate of PRSI and have no top-up, you get completely screwed over and end up with the lowest net maternity benefit. (not that i'm bitter! )

It's actually more complicated than that.

I've no idea of the situation where the employer doesn't top up your income.

But where they do, then the Revenue take the position that they don't know if you're going to return to work after maternity leave, and therefore they "frontload" the reduction in your credits.

Which essentially means your employer will end up having to pay out waaaaay more than your usual salary. Some employers will do this, many won't. Understandably!

Basically it's quite straightforward if your payment isn't topped up. But if the plan is for your the employer to pay you at the usual rate, and if you're depending on that, you really need to talk to someone in your payroll department to see what the story is!

pwurple

Lady is a tramp wrote: »

Basically it's quite straightforward if your payment isn't topped up. But if the plan is for your the employer to pay you at the usual rate, and if you're depending on that, you really need to talk to someone in your payroll department to see what the story is!

It's not straightforward either if you're not being topped up.

Because again, tax. The whole lot is taxed now. They put you into your original tax bracket, where your salary could really be down by a considerable amount by year end. Your wages can be halved if your mat leave falls in one year, or worse if you take any of the 16 weeks unpaid leave, but you're paying tax as if you are earning as normal. You then have to try to claw that tax back at the end of the year again. What you're supposed to be living on while on mat leave, I don't know?

Plus, there is some complexity about whether USC and PRSI is due on it or not. Add in things like pension contributions, or claiming BIK or expenses the month previous, it can get messy.

If you work for yourself, or a small company who isn't used it dealing with it, it's quite tricky to figure out.

forzacalcio

Quick question, just wondering about going back to work after maternity leave. Is there a set time one must go back to work after getting 6 months paid maternity leave from social? I believe there is a set time you must return to work if being paid by your own work place but is it the same when benefit comes from the state? Sorry if its a basic question, any help is appreciated.

jlm29

forzacalcio wrote: »

Quick question, just wondering about going back to work after maternity leave. Is there a set time one must go back to work after getting 6 months paid maternity leave from social? I believe there is a set time you must return to work if being paid by your own work place but is it the same when benefit comes from the state? Sorry if its a basic question, any help is appreciated.

You're entitled to 16 weeks unpaid maternity leave after the 26weeks paid. In my workplace, to extend it beyond that, one would have to take parental leave or annual leave.

forzacalcio

jlm29 wrote: »

You're entitled to 16 weeks unpaid maternity leave after the 26weeks paid. In my workplace, to extend it beyond that, one would have to take parental leave or annual leave.

What I mean after maternity leave and due back to work can one just hand in notice without penalty? I just heard you had to be back for a certain time when paid maternity benefit.

Moonbeam

We are taxed jointly so I got the full amount and his tax credit was adjusted .

Moonbeam

forzacalcio wrote: »

What I mean after maternity leave and due back to work can one just hand in notice without penalty? I just heard you had to be back for a certain time when paid maternity benefit.

Not unless the company have rules about it due to paying a top up .

Millem

I get topped up on maternity leave. I received more than my usual wages....around €70 I think per month because maternity benefit is taxed but no prsi or USC on it. So gained a little. Can't remember the exact figure but I think €70 or €90 per month!