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How much of my parents benefit will I actually receive after tax?

  • 09-04-2025 09:44AM
    #1
    Registered Users, Registered Users 2 Posts: 430 ✭✭


    It's my understanding that the roughly €300 parents benefit will be taxed as income.

    I'm on the higher tax bracket. Does that mean if I go on parents leave, I will receive only €150 ish of that?

    How exactly does revenue steal this money? Is it through reduction of my tax credits?



Comments

  • Moderators, Category Moderators, Arts Moderators, Business & Finance Moderators, Entertainment Moderators, Society & Culture Moderators Posts: 18,560 CMod ✭✭✭✭Nody


    €289 a week and it's adjusted by them sending the information to your employer for tax deduction purposes at least from what I read on Citizen information.

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

    Revenue will reduce your tax credits and rate band to account for the tax payable on your Maternity Benefit, and in this way collect the tax due. Revenue will then send a revised tax credit certificate to your employer. Your employer should only deduct tax, USC and PRSI on the difference between the salary paid and Maternity Benefit.

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

    Revenue will reduce your tax credits and rate band to account for the tax payable on your Maternity Benefit. Your employer should deduct tax, USC and PRSI only on the amount of salary actually paid by them.

    3. You do not get any salary while on maternity leave and your Maternity Benefit is paid directly to you.

    Revenue will reduce your tax credits and rate band to account for the tax payable on your Maternity Benefit. They will then send a revised tax credit certificate to your employer. If your only income is Maternity Benefit, you will probably pay very little or no tax (since your total tax credits will probably exceed your total tax liability).

    If you are not entitled to any pay on the usual pay day, you may contact your employer to request repayment of any tax that might be due. Alternatively, when you go back to work after maternity leave, any refund of tax which may be due can be calculated.



  • Registered Users, Registered Users 2 Posts: 430 ✭✭scrotist


    But how much of the €289 do I receive really after revenue changes my tax credits?



  • Moderators, Category Moderators, Arts Moderators, Business & Finance Moderators, Entertainment Moderators, Society & Culture Moderators Posts: 18,560 CMod ✭✭✭✭Nody


    Depends on your total yearly income; let's play round numbers here. You make 100k a year; your company will pay your full salary for the full duration of leave of 4 weeks. You will then be deducted 40% of the 289 as part of the tax deduction on your salary as part of the taxes as your company is told you've earned another €1156 (4weeks x €289) on top. Same applies if you get paid nothing as well as long as your total yearly salary exceeds 42k a year before benefits as anything above 42k is taxed at 40% (and the benefit is for all intent and practice considered salary for tax purposes). At least that's my understanding of it as I'm not an tax accountant.



  • Registered Users, Registered Users 2 Posts: 78,787 ✭✭✭✭Victor


    That will depend on any other income (including to spouse if jointly assessed) during the year. If you are on leave for exactly one full tax year, any tax should be negligible. If you normally earn €100,000 per year and your leave is spread across two tax year, then you should get about half of it.

    Put your details into a tax calculator like this one: https://download.pwc.com/ie/budget-2025/income-tax-calculator.html



  • Moderators, Business & Finance Moderators, Social & Fun Moderators, Sports Moderators, Paid Member Posts: 57,847 Mod ✭✭✭✭Necro


    Actually the OP will get the full 289. DSP don't deduct anything from a payment for tax purposes so the actual deduction will come from their tax credits being reduced and be seen in their wages rather than the social welfare payment



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