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Updated: 27/11/2015

Taxation of illness benefit and occupational injury benefit

Revenue has updated the Employer's guide to PAYE in relation to the taxation of Illness and Occupational Injury Benefit

Particular attention should be given to the section relating to Illness Benefit which is paid at the end of the tax year. Details of the taxable Illness Benefit received prior to the closing off of the final payroll for 2015 should be recorded in this final pay period.

An employer is not required to deal with the taxation of Illness Benefit relating to 2015 which is received by the employer following the closure of the final 2015 payroll. Revenue will deal with the taxation of these amounts directly with the employees concerned.

Only Illness Benefit relating to 2016 should be included in 2016 payrolls. Employers should not tax 2015 Illness Benefit in a 2016 payroll, however employers may need to take the amount of Illness Benefit into account in determining the amount of sick pay to be paid to an employee.


Softcom does not accept any responsibility. The above is for reference ONLY. Please consult the relevant Department before making any decisions.