DOLE Stresses That Maternity Benefits under Expanded Maternity Leave Law Are Tax-Free
DOLE Maternity Benefits -min

DOLE Stresses That Maternity Benefits Under Expanded Maternity Leave Law Are Tax-Free

The Department of Labor and Employment (DOLE) clarified last week that female employees are entitled to receive tax-free maternity benefits under the provisions of Republic Act No. 11210, otherwise known as “The Expanded Maternity Leave Law”. 

Labor Secretary Silvestre Bello III reiterates the provisions of the Department Advisory (DA) No. 01-A, Series of 2019, which states that salary differential paid by private sector employers to their female employees availing of the expanded maternity leave shall be exempted from income and withholding taxes. 

The salary differential is the difference between the full salary of the female worker during her maternity leave and the actual cash benefits received from the Social Security System (SSS). 

The advisory from DOLE is pursuant to Revenue Memorandum Circular (RMC) No. 105-2019 issued by the Bureau of Internal Revenue (BIR) which clarifies the proper tax treatment of maternity leave benefits under the 105-day Expanded Maternity Leave (EML) Law. 

According to the BIR memorandum, the provisions of the EML Law and its Implementing Rules and Regulations (IRR) jointly issued by the Civil Service Commission (CSC), DOLE, and SSS prescribe that workers availing of the maternity leave period and benefits must receive their full pay. 

The memorandum further states that employers from the private sector shall be responsible for payment of the salary differential between the actual cash benefits received from the SSS by the covered female workers and their average weekly or regular wages, for the duration of the maternity leave. 

DOLE’s advisory amends DA No. 01, Series of 2019 insofar as the tax treatment of salary differential is concerned. 

RA No. 11210, or the 105-Day Expanded Maternity Leave Law, was signed into law on February 20, 2019. Its IRR was issued on May 1 of the same year. The law extends the previous 60-day paid maternity leave to 105 days, with an option to extend for an additional 30 days of unpaid leave. Solo mothers are granted an additional 15 days of paid maternity leave.  

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