Pat is weekly-paid (Friday pay day) and has instructed the Department of Social Protection (DSP) to pay any IB directly to his employer. He is out sick from Monday, 11 March 2023.
Pay day: Friday 15 March 2023
The employer pays Pat as normal, as DSP do not pay IB for the first three days of a claim.
Pay day: Friday, 22 March 2023
The employer has received a payment of €200 from the DSP. Pat is normally paid €500 per week. For taxation purposes the €200 should not be included in the calculation of PAYE, USC or PRSI. The employer reduces the weekly taxable pay to €300 (€500 – €200).
Pay day: Friday, 29 March 2023
The employee returns to work on Tuesday, 26 March. An amended RPN is received from Revenue with reduced tax credits and rate band. The employer only taxes the pay-related portion of the salary as the IB has been included on the amended RPN.
The employer must not return the IB received on the payroll submission to Revenue.