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.
  
  
• 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 employee's Revenue Payroll Notification (RPN).
  
  
• Therefore, you should ensure that you check for updated RPNs before each pay run.
  
  
• In addition, since 1st January 2018, Illness Benefit letters are no longer delivered to the ROS Inbox.

Action required by the employer in the payroll

Where an employer pays the employee while they are out sick, but the employee receives the Illness Benefit payment directly from DEASP (i.e. the employee does not give it to his/her 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 themselves
  
  

• Employer must import the amended RPN file immediately