Many women who take maternity leave are paying too much tax during that period and are entitled to tax rebates ranging from €1,000 to €3,000, according to local TD Denis Naughten. Women are paid up to €280 a week in state maternity benefit when they take time off work to have a child. The tax issue arises where employers agree to top up this payment so their employees maintain their regular salary during leave. ‘In most cases when a woman’s maternity leave is being topped up, the employer deducts the State payment from the employee’s salary and pays the remainder, which is taxable, as normal and in this case, tax liability isn’t an issue. ‘However, the overpayment arises for women who receive their full taxable salary and where the woman on maternity leave forwards the maternity benefit directly to the employer. In such situations there will be an overpayment of tax if the employer does not reconfigure their payroll system to take into account that up to €1,120 of the employee’s monthly salary is now tax free as their weekly maternity benefit can’t be taxed,’ explained Deputy Naughten.
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