Hontiveros: Maternity benefits are now tax-free

Hontiveros: Maternity benefits are now tax-free

Senator Risa Hontiveros announced that working women and expectant mothers can now enjoy tax-free maternity benefits. This simply means that working women who are expectant mothers shall enjoy tax-free maternity benefits in the future.

The Bureau of Internal Revenue (BIR) announced that the salary differential provision in the Expanded Maternity Leave (EML) law is exempted from income and withholding taxes. Expectant mothers would be able to allot what they traditionally pay for taxes for the nurturing of their child.

The Expanded Maternity Leave (EML) law, principally authored by Hontiveros provides:
  • Increasing the number of paid maternity leaves from sixty (60) to one hundred and five (105) days;
  • Tax-free maternity benefits;
  • Solo parents (mothers) to have fifteen (15) more days in their leave; and
  • Paternity benefit or more known to be the “daddy quota,” granting fathers a paid leave for seven (7) days or one (1) week.
“This is an early Christmas gift to working mothers and families. This comes at a time when we pay so many taxes. Tax-free na ang expanded maternity leave benefits ng mga kababaihan,” said Hontiveros.

In a memorandum issued on Oct. 9, the BIR said that on the latest provisions of the EML law, the implementing rules and regulations (IRRs) of the Department of Labor and Employment (DOLE) and the Social Security System (SSS), the maternity benefits of the female workers are expanded from the previous 100 percent of their average daily salary, to a credit to a full salary which includes the differential pay other than the duration of the maternity leave being extended.

Hence, the salary differential is considered as a benefit and exempted from income and withholding taxes. Furthermore, those who are covered by the tax exemption are working women who have a salary above the SSS benefit and whose employers are required to pay the difference between the SSS benefit and the actual salary.