Taxed on Illness Benefit

PAYE worker was out of work for nearly 3 months with broken limb. A form was completed and signed by the employee to allow the illness benefit to be paid directly to the employer and the employer paid the normal, full monthly salary to the employee. The employee did not receive any additional payment during this 3 months either from the employer or from Welfare.

Upon returning to work, the employee is now paying an additional €100 per month in tax and ROS shows online that a further €640 is due.

HR just told the employee to call Revenue and the company accounts dept can't explain the change other than it's for illness benefit received.
Can anyone shed any light before the employee tries to contact Revenue? Thanks

Illness benefit is taxable; payroll may not have decucted the correct tax.

See Example 1 here: https://www.revenue.ie/en/employing...llness-benefit/pay-employee-receiving-ib.aspx

Looks as though the payroll section may have made a dog's dinner of things!

Marsupial said:

See Example 1 here: https://www.revenue.ie/en/employing...llness-benefit/pay-employee-receiving-ib.aspx

Looks as though the payroll section may have made a dog's dinner of things!

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Thank you, I saw that while googling and that's the only conclusion I could come to. He has been trying to contact Revenue all morning, but no luck so far.

delgirl said:

Thank you, I saw that while googling and that's the only conclusion I could come to. He has been trying to contact Revenue all morning, but no luck so far.

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I suspect that revenue may well advise him that as his employer has made the mistake then it's up to them to correct it.

Alternatively, they might agree to restore his tax credits until the end of the tax year. Good luck!