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Salary differential tax-free under new maternity leave law

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THE SALARY differential under the Expanded Maternity Leave Law (EMLL) Law is now tax-free since it is considered as a benefit, according to the Bureau of Internal Revenue (BIR).

BIR’s revenue memorandum circular 105-2019 posted last week clarifies that the tax treatment of the salary differential of female workers’ maternity leave is considered as a benefit that should be exempted from income and withholding taxes.

“The maternity benefit of the female worker has been expanded from the previous 100% of the average daily salary credit to a full pay or salary which includes now the salary differential as its component, aside from the added duration of the maternity leave. Accordingly, it is therefore clear that salary differential is considered as a benefit,” reads the circular read signed by BIR Commissioner Caesar R. Dulay.

BIR said it took into account the EMLL implementing rules and regulations as well as issuances from the Social Security System and Department of Labor and Employment.

Republic Act No. 11210, or the 105-Day Expanded Maternity Leave Law, was signed in February, increasing the maternity leave period to 105 days for female workers with full pay and with an option to extend up to 30 days without pay.

Solo mothers can avail of an additional 15 days of leave.




“This is welcome news indeed. Now mothers and their families will not only be able to enjoy the biological benefits of the EML law, but their financial welfare is also looked after, particularly those who earn just enough to meet basic needs and still feel the pinch in times of economic strain,” Senator Risa N. Hontiveros-Baraquel, who was also the principal author and sponsor of the law, said in a statement on Wednesday. — Beatrice M. Laforga









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