Illness Benefit - General

Since 1st January 2013, the employer is responsible for collecting PAYE due on Illness Benefit issued to employees, without exception. 

There is no alternative treatment or option but for the employer to calculate and collect the PAYE regardless of whether or not:

  • the employer receives confirmation, from either the employee or the Department of Social Protection, of the Illness Benefit issued;
  • the employee retains the Illness Benefit
  • the employer receives the Illness Benefit (either directly or indirectly)
  • the employer continues to pay the employee when they are on sick leave.


The employer should assume the employee is in receipt of Illness Benefit once the period of illness exceeds six consecutive days and start to account for Illness Benefit in this first pay period. The employer should assume the employee is in receipt of the full normal rateof illness benefit until notified otherwise.

In the majority of cases the employee’s tax credit and SRCOP will cover the PAYE payable on the Illness Benefit within each pay period.

BrightPay features an Illness Benefit tool to automate the process of taxing the Illness Benefit for the employer. It is important that employers access and use this feature for any Illness Benefit issued to an employee from 01st January 2017 in the very first pay period in order to:

  • treat Illness Benefit correctly
  • capture the Illness Benefit figure for 2017 Revenue returns (P45, P35, P60)



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