Overview
This article explains how the Sickness Benefit Deduction is calculated within the Payroll module and how it is displayed on employee payslips. This deduction ensures that payroll is adjusted correctly when employees are entitled to receive Social Security sickness benefits.
Permissions
To manage or view Sickness Benefit Deductions, you must have the Manage Payroll or View Payroll permission over the relevant employee.
What is Sickness Benefit Deduction in my Payslip?
If you are on sick leave, you may notice a negative adjustment on your payslip labelled Sickness Benefit Deduction. This is not a loss of pay, but a standard payroll adjustment:
- It represents the portion of your salary covered by Social Security benefits.
- The amount is subtracted from your Gross Salary before tax.
- This ensures your total income (Salary + Government Benefit) remains consistent with your regular earnings.
To apply for the sickness benefit, you must have your medical practitioner complete a Blue Medical Certificate, which you then submit to the Department of Social Security while providing a copy to your employer. It is crucial to submit this certificate within ten days of your first day of illness to avoid forfeiture of the benefit, and for extended illnesses, the certificate must be renewed every two weeks.
Sickness Benefit Deduction Rules
- Is paid on a daily basis.
- Is based on the Employee Details setting “SSC Benefit Status” for which the options are Single and Married.
- Is given pro-rata based on job schedule hours.
- For employees on irregular/casual hours, we take the average weekly hours worked in the past 13 weeks and pro-rate this against a 40 hour week's entitlement.
- If Sick Half pay is booked, the deduction is deducted by half.
- If Sick Unpaid is booked, no sickness benefit deduction is deducted.
- It is not deducted on Public Holidays unless the employee is set to work on a Public Holiday based on their job schedule.
- It is not deducted on Sundays.
- It is given when sick leave booked for a day is equal to or more than the daily number of hours as per job schedule.
- It is not given when sick leave booked for a day is less than the daily number of hours as per job schedule.
- “Days” are based on the employee's Job Schedule and designated Working days.
- It is a Taxable deduction, therefore it is deducted from the Gross before tax is calculated.
How is Sickness Benefit Deduction Calculated?
Employees receive Sickness Benefit starting from the 4th working day of illness, as the employer covers the first 3 days. Make sure to record the entire leave period in Talexio.
To calculate the deduction, define the following terms:
- Eligible Days: Total sick days minus the 3-day statutory waiting period.
- Daily Benefit Rate: The rate applicable to the employee's Social Security category as defined by the government.
The calculation is performed as follows:
(Eligible Days) x (Daily Benefit Rate) = Sickness Benefit DeductionExample:
- An employee is sick for 5 days.
- The first 3 days are the unpaid waiting period.
- The Daily Benefit Rate is €17.21.
- Calculation: (5 - 3) x €17.21 = €34.42 Sickness Benefit Deduction.