Taxation of certain social welfare payments received by employees

How to pay an employee who is receiving Maternity Benefit

Where there is a paid maternity leave scheme in operation, the employer should only tax the pay-related portion of an employee’s salary. Revenue collects the tax due on any Maternity Benefit payments by reducing an employee’s tax credits and rate bands. Employers must use the tax credits and rate bands from the most recent Revenue Payroll Notification (RPN) issued by Revenue. An updated RPN will issue once the commencement, or cessation, of Maternity Benefit has been reported to Revenue.

Note

The following examples can be applied to Maternity Benefit, as well as Health and Safety Benefit, Adoptive Benefit, Paternity Benefit and Parent’s Benefit.

  • Example 1 (Maternity Benefit is paid directly to the employer)

    Jane’s employer operates a paid maternity leave scheme. Jane is paid weekly (Friday pay day) and has instructed the Department of Social Protection (DSP) to pay any Maternity Benefit directly to her employer. She is on maternity leave from Monday 2 March 2026.

    Pay day: Friday 6 March 2026

    The employer has received a payment of €299 from the DSP. Jane is normally paid €500 per week. The employer only taxes the pay-related portion of the salary.

    For taxation purposes, the €299 should not be included in the calculation of:

    • Pay As you Earn (PAYE)

    • Universal Social Charge (USC)

    • Pay Related Social Insurance (PRSI).

    The employer reduces the weekly taxable pay to €201 (€500 – €299).

    The employer must not include the Maternity Benefit received on the payroll submission for Jane to Revenue.

    Pay day: Friday 13 March 2026

    An updated RPN is received from Revenue with reduced tax credits and rate band on Wednesday 11 March. The employer has received a payment of €299 from the DSP. The employer includes weekly taxable pay of €201 (€500 – €299) in their payroll submission and applies the most recent RPN received from Revenue.

    Pay day: Friday 2 October 2026

    Jane returns to work on Monday 28 September. An updated RPN is received from Revenue on Thursday 1 October 2026.

    Jane is taxed as usual on her pay. This is for the period from 28 September to 2 October using the most recent RPN. 

  • Example 2 (The employer does not operate a paid maternity leave scheme)

    Áine is paid weekly and is on maternity leave from 5 February 2026.

    She is paid on Friday 6 February for the three days she worked that week. The employer does not pay her again until after the maternity leave has ended.

    Áine returns to work on 10 August 2026 and Revenue issues an updated RPN to the employer the next day. This notification takes into account the amount of taxable Maternity Benefit that Áine received. 

    On the next pay day (Friday 14 August), Áine is taxed as usual on her pay. This is for the period from 10 to 14 August using the most recent RPN.

Published: 21 May 2026 Print this page

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