Taxation of Illness Benefit and Occupational Injury Benefit

Illness Benefit and Occupational Injury Benefit payable by the Department of Social Protection (DSP) are taxable payments. When an employee is absent from work due to illness and receives or is entitled to receive Illness Benefit or Occupational Injury Benefit, tax is collected through the PAYE system.

With effect from 1 January 2012, all taxable Illness Benefit and Occupational Injury Benefit paid to PAYE Employees by the DSP are to be included with taxable pay.

For more information please see the following:

  1. Revenue eBrief No. 37/2012
  2. pdfPAYE Notice to Employers – July 2012 (PDF, 41KB)
  3. Employer’s Guide to PAYE (Paragraph 7.11)
  4. Revenue leaflet IT22 – Taxation of Illness and Short-term Occupational Injury Benefits

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