Employer pays employee while out sick but employee retains the illness benefit

Illness Benefit is subject to PAYE only, it is not subject to USC or PRSI.

Since 1st January 2018, employers are no longer required to tax Illness Benefit through the payroll.

Instead, Revenue adjust the employee's tax credits and cut off points via the Revenue Payroll Notification (RPN)

RPNs should be checked before every pay period.

EMPLOYER PAYS THE EMPLOYEE WHILE THEY ARE OUT SICK

Employer pays the employee while they are out sick, employee retains the Illness Benefit payment from DEASP (does not give it to his employer.

• Employer reduces the employee's salary by the value of the Illness Benefit they are receiving so he is merely topping up the employee salary to their normal periodical salary or the alternative as dictated by company sick pay policy
  
  
• Employee claims and retains the DEASP Illness Benefit
  
  
• Employer must import the amended RPN immediately