Maternity benefits now tax-free – Hontiveros

MANILA, Philippines — Working women and expectant mothers can now enjoy tax-free maternity benefits, Sen. Risa Hontiveros said yesterday.

Hontiveros welcomed the announcement of the Bureau of Internal Revenue (BIR) that the salary differential provision in the Expanded Maternity Leave (EML) law is exempted from income and withholding taxes.

The law, principally authored by Hontiveros, increases the number of paid maternity leaves from 60 to 105 days. Solo parents are entitled to 15 more days, for a total of 120 leave days. It also has a “daddy quota” provision granting fathers seven days of paid leave.

“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,” Hontiveros said. “Healthy hindi lamang si nanay at ang kanyang baby, healthy din pati bulsa (Not only mother and baby are healthy, the pocket is also healthy).”

In a memorandum issued on Oct. 9, the BIR said based on the new provisions of the EML law and its implementing rules and regulations as well as the respective issuances of the Social Security System (SSS) and Department of Labor and Employment, the maternity benefits of female workers have been expanded from the previous 100 percent of the average daily salary credit to a full salary, including differential pay aside from the duration of the maternity leave.

Hence, the salary differential is considered as a benefit and exempted from income and withholding taxes.

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.