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Taxman alleviates maternity leave woes

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by Allan Yves Briones

Not taxable.

For the benefit of working mothers all over the country, the Bureau of Internal Revenue (BIR) has clarified the status of “salary differential” paid to female workers in the private sector on maternity leave.

In Revenue Memorandum Circular 105-2019, BIR Commissioner Caesar Dulay reiterated that maternity leave benefits are not liable to income and withholding taxes.

“It is clear that salary differential is considered as a benefit,” Dulay stated in the memorandum.

Republic Act No. 11210 or the 105-Day Expanded Maternity Leave Law, signed into law last February, has expanded the duration allotted to working mothers to 105 days.

According to the law, the “salary differential” is defined as the difference between the actual cash benefits received from the Social Security System and their average weekly or regular wages, subject to the guidelines of the Department of Labor and Employment.

Both agencies have previously held that the extra pay tacked onto the mother’s salaries and benefits are taxable.

Also under the law, solo parents receive an additional 15 days, boosting total maternity leave to 120 days. #

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