Personal income tax from sick leave: is the benefit taxable

2024 Author: Howard Calhoun | [email protected]. Last modified: 2023-12-17 10:16

Disability benefit, colloquially - sick leave, often raises many questions for both the accountant and the employee. Sometimes an employee expects a large amount, but in the end it turns out to be unpleasantly surprised. What is it connected with? Is personal income tax taken from sick leave?

The amount of disability benefits itself often does not live up to expectations, and there are a number of reasons for this. Who should beware of sick leave, and who benefits from it? Let's figure it out together.

Sick leave: payment features

Why is temporary disability benefit often less than an employee's average wage? Everything is in order of reckoning. To calculate the sick leave benefit, two years preceding the current one are taken. This means that the sick leave, which begins in 2017, is paid from the salary of 2015 and 2016. Here it is already worth being surprised, because in most cases wages grow, are indexed, and the employee in 2017 receives larger amounts than in previous years. However, for the calculation of the sick leave, past years are taken. This is the main reason for the low payout.

In this case, the entire amount of wages is also divided by seven hundred and thirtydays, that is, the total number of days in a calendar two years. And again, not only working days, but also weekends are taken into account. However, this can be somewhat compensated for by the fact that all sick days are paid, even if the employee had to rest during this period, for example, during shift work.

It is not profitable to take sick leave for those who have the highest possible wages. So it’s worth checking out what the maximum amount of the total salary for the year is taken for each particular year. If the total amount of payments from the employee was higher, then he loses money.

But those who receive the minimum wage need not worry. The minimum amount of sick leave payments is also regulated. However, depending on the length of service, it can also be reduced.

What else can reduce the amount of benefits?

NDFL from sick leave - is not the only way to reduce the amount received. The payment of benefits is directly related to the length of service of the employee. Moreover, if the employee has officially worked for less than five full years, then his amount of benefits will be paid in the amount of sixty percent.

When working from five to eight years, an employee can expect 80% pay. And only with an experience of eight years he has the right to 100% sick leave payment. It should be noted that the total experience is taken into account, it does not matter whether you worked at the same enterprise before or not.

It is also worth remembering that the sick leave, which is issued to a parent to care for his child, is not fully paid. Over ten days, payment is made at a rate of 50%.

Is personal income tax taken from sick leave?

The answer to this question is one: yes. Sick leave for a general illness, injury, or caring for a sick family member is paid to the employee and is taxable. The explanation for this is in article 217 of the Labor Code. According to this act, payment for days of incapacity for work is the income of a citizen, which means that it should be subject to personal income tax.

From the sick leave, which is provided to the employer, but standard insurance premiums are not charged on it. Because of this, sick leave periods are saved when paying for the next year, but the amounts are removed from the calculation. That is, if an employee was on sick leave for a long time in 2014, then the payment in 2015 and 2016 will be lower. Personal income tax and sick leave in 2014 do not differ from payments in 2017.

Maternity allowance: features

In all situations, whether the sick leave is subject to personal income tax. No, one can separately single out the disability certificate that is issued to women on maternity leave. It has code 05 and is issued for 140 days.

At the same time, a certificate of registration in the early stages of pregnancy is also attached to the sick leave. Therefore, it is more profitable for women to register immediately. The allowance, though small, but there is a place to be.

Personal income tax from such a plan is not charged. Accordingly, insurance premiums for this period are not charged.

What other benefits do pregnant women have?

We found out whether personal income tax is withheld from the sick leave directly for pregnancy and childbirth or not. But still, the advantages of this type of payment do not end at this point. Those who go on maternity leave should be aware that their amount of payments may be higher than with a simple sick leave.

For example, if a woman goes from maternity leave to maternity leave, she has the right to replace those years in which she did not work for previous ones. The same is true with sick leave. If, in case of a general illness, the employee in any case divides his income by 730 days, then when calculating maternity payments, sick leave allowances and child care allowances are deducted. And since the number of days becomes less, the amount of payment per day increases.

Thus, personal income tax is taken from sick leave. And this is done at the standard rate - thirteen percent. The only exception is the maternity benefit, that is, when there is a disability certificate with code 05. However, this is not the only disadvantage of paying sick leave at the present time. And the resulting benefit often disappoints the worker.