Taxation of paternity benefit

ForzaForward1

I'm hoping someone may be able to help me with this query as revenue are taking over a month to reply to my queries and anyone that works in the public service knows the NSSO are a disaster at the moment.

I was on paternity leave last year for two weeks, I'm a public servant and my employer paid me my full wage for the two weeks. Paternity benefit was paid directly to my employer and my payslips shows 'Paternity Leave €500 and underneath says 'Paternity Leave -€500.

However on my revenue income tax return, DSP paternity benefit is listed as an income of €500 and I'm taxed on this.

So it appears to my I've been taxed on an extra €500 as I never received extra paternity pay, I only got paid my normal salary.

An I right in this? Revenue have told me my employer would need to adjust my payroll and my employer are saying they've calculated it it correctly.

Any advise would be appreciated

wench

You did technically receive the paternity benefit, albeit through your employer. Your gross pay should have been reduced by an equivalent amount to leave you with the same amount.

Does your pay show a reduction?

ForzaForward1

No my gross pay stayed the same, and then underneath my gross amount it says:

Paternity Benefit +€500

Paternity Benefit - €500

So as my gross wasn't reduced and the Paternity was added as a separate income by Revenue, I believe I've been taxed on it twice.

Now I've to try convince my payroll of this!

ibarelycare

https://www.boards.ie/discussion/comment/120446026#Comment_120446026

If the "+€500" is a non-taxable payment then they have operated it correctly and you haven't been taxed twice. I work in payroll, and where paternity benefit (or any social welfare) is paid directly to a company who tops up the employee's salary while on leave, the process is as follows:

• Reduce the employee's gross pay by €500;
• Make a net (tax free) payment to the employee of €500 (essentially passing on what they have received from social welfare);
• Employee's tax credits are adjusted by Revenue to collect the tax on the social welfare payment.

ForzaForward1

https://www.boards.ie/discussion/comment/120447571#Comment_120447571

Ye thats clear and makes sense.

Payroll have come back to me today and said that my paternity benefit was processed through the payroll and 2 pay codes one positive and one negative were entered. This had the effect of reducing my taxable pay and therefore i was not taxed twice.

My gross pay was not reduced though. I don't see how my taxable pay was reduced

shmeee

https://www.boards.ie/discussion/comment/120467513#Comment_120467513

Work out how much tax you paid on the payment the week the paternity benefit was included on your payroll submission? It will be less tax than normally paid on your weekly payroll. You will also have received an amended tax credit certificate to show your reduction in your tax credits; tax credits reduced by €100 (€500 @ 20%) and your 20% rate band reduced by €500.

And as noted above, NSSO payslips have the DSP payments as a + then a - on the payslips. Your Gross pay may not be reduced on your payslip, your 'Pay for Income Tax/USC/PRSI' will be the fields reduced and not include the DSP payment. What appears on a payslip may vary in format / headings etc than what ends up on your Revenue account.

Log into your Revenue account and view the payroll submission submitted to Revenue, under Manage Tax 2023. This may explain it a bit better.