The labor relationship between an employer and his employee implies that in the event of the latter’s illness, he is entitled to compensation - payment for temporary disability on the basis of sick leave. This document is issued by a medical institution - a hospital or clinic for the entire period during which a person is not allowed to work. At the end of the illness, the employee provides sick leave to the accounting department. 10 days are allotted for calculating the benefit, and the payment itself must be timed to coincide with the nearest salary payment date for the rest of the month. Of course, during the period of illness, the employee’s regular salary is not accrued; in this case, there are no standard taxes. This raises a completely logical question: are sick leave and payments related to the employee’s illness subject to taxes?
What is the tax on sick leave in 2021?
Disability benefits are similar in nature to wages. Such amounts are paid to personnel within the framework of labor relations and are guaranteed by stat. 183 TK. When calculating, the first 3 days of a general illness are paid by the employer from his own funds, the rest - at the expense of Social Insurance (Article 3, 6 of Law No. 255-FZ of December 29, 2006).
What are the taxes on sick leave in 2021? Do I need to pay insurance premiums and is sick leave subject to income tax? Unlike, for example, wages, the calculation of insurance premiums is not provided for by law. After all, such payments are subject to reimbursement by the Social Insurance Fund, and therefore do not belong to the tax base for compulsory medical insurance, compulsory medical insurance, compulsory social insurance and “injuries”.
Disability codes on sick leave
Cases when tax is not charged
According to the current legislation of the country, personal income tax is not taken from sick leave if it is issued to an employee in connection with pregnancy and childbirth . After submitting such a document and several certificates attached to it to the employer, the employee must receive full compensation within ten days, since these payments are not taxable.
There is also a special case when taxes are not levied on sick leave in 2021 - this is the adoption of a child. A certificate of temporary incapacity for work is issued upon adoption of a child under 3 months of age. for 70 days. The date of birth of the child will be considered the one indicated in the court decision. Personal income tax is not deducted from sick leave issued for such an occasion.
Is income tax payable on sick leave?
We sorted out the insurance premiums. Is income tax deductible on sick leave? The answer will depend on the type of benefit. According to paragraph 1 of Art. 217 of the Tax Code it is necessary to withhold income tax from ordinary government benefits. That is, for example, in case of a general illness of an employee or when caring for a sick child. But, let’s say, there is no obligation to withhold personal income tax from the B&R (pregnancy and childbirth) benefit.
The personal income tax rate is set according to the norms of the Tax Code of the Russian Federation. When calculating, the benefit amount refers to the month for which the funds are paid. The employer is required to withhold income tax for the entire period of incapacity. It does not matter from what source the payment is calculated. For the first 3 days, the employer performs the calculation. In this case, the total amount of benefits to be accrued is first determined, taking into account the employee’s length of service. And then, at the working rate, personal income tax is withheld from compensation and the amount of funds to be issued “in hand” is calculated.
For the remaining days of the illness period, it is calculated directly by the Social Insurance Fund (with the participation of the region in the pilot project) or by the organization. In the second case, after checking the documentation and subject to a positive review, Social Insurance returns the entire amount of the benefit to the enterprise. That is, taking into account accrued personal income tax.
What taxes are imposed on a certificate of temporary incapacity for work?
Money paid for a period of incapacity for work that is associated with illness, although not considered wages, is subject to taxes.
According to the legislative acts of our country, personal income tax on sick leave is calculated in the general manner. It is paid at the expense of the employee and depends on the reasons for his receipt of a certificate of temporary incapacity for work.
A document issued in connection with:
- with an employee's illness;
- caring for sick children or other disabled relatives;
- with quarantine;
- with injury;
- with the need for further treatment in a hospital or sanatorium.
It should be noted that a document confirming temporary disability must be issued only in licensed medical institutions. The diagnosis is not prescribed in it, since it is a medical secret. Only a certain code must be entered on the sheet. It also notes its duration, which is taken as the basis when calculating the benefit.
How can an employer verify the authenticity of a sick leave certificate? Actions to take when a counterfeit is detected
Sick leave taxation 2021 - example of calculations
Let’s assume that the store salesperson was on sick leave from 06/01/18 to 06/08/18. The bulletin was issued in accordance with legal regulations. The accountant calculated the benefit amount for 8 days (calendar) and accrued:
- For the first 3 days – RUB 3,550.00.
- For the remaining 5 days – 5850.00 rubles.
What taxes are charged on sick leave in 2021? There is no need to withhold insurance premiums for medical, pension, social insurance, or “injury”. It is necessary to accrue, withhold, and transfer income tax to the budget. In accounting, the transaction looks like this:
- D 44 K 70 for 3550.00 rub. – the accountant calculated the amount of sickness benefits at the expense of the company.
- D 69.1 K 70 for 5850.00 rub. – the accountant calculated the amount of sickness benefits at the expense of Social Insurance.
- D 70 K 68.2 for 1222.00 rub. – income tax is charged on the entire benefit amount.
- D 70 K 51 for 8178.00 rub. – the company transferred benefits to the employee’s card.
- D 68.1 K 51 for 1222.00 rub. – the company paid personal income tax to the state.
- D 51 K 69.1 for 5850.00 rub. – after an inspection, Social Insurance reimbursed the employer for sick leave expenses.
Conclusion - in this article we looked at what taxes sick leave is subject to in 2021. According to current legal requirements, insurance premiums are not required to be charged on benefit amounts. With regard to income tax, the withholding obligation arises depending on the type of payment. There is no need to pay personal income tax on maternity benefits, but on regular benefits, including care for sick children, it is necessary.
Is personal income tax deducted from sick leave benefits?
Is income tax payable on sick leave? The answer to this question lies in Article 217 of the Tax Code. It contains a list of individual income from which personal income tax is not withheld. There is no compensation for the time of illness, from which we can make an unambiguous conclusion that this tax must be withheld, as in ordinary cases, directly upon its payment (clause 1, 4 of Article 226 of the Tax Code of the Russian Federation). The tax agent - the employer - is obliged to transfer the withheld tax to the budget no later than the last day of the month in which he paid the benefit in favor of his employee. This is directly stated in paragraph 6 of Article 226 of the Tax Code. This provision is relatively new: the amendment applies to 2021.
At the end of the year, the amounts of benefits paid, as well as the personal income tax withheld from them, are reflected in the certificate in form 2-NDFL. These amounts are also taken into account when preparing the quarterly 6-NDFL report.
However, there are also situations in which, when paying sick leave to an employee, his employer is not a tax agent for personal income tax. We are talking about a number of regions of the country where a pilot project has been implemented that involves direct payment of benefits from the Social Insurance Fund, bypassing the employer. In such a situation, a company or individual entrepreneur pays its sick employee only the first three days of temporary disability. Let us remind you that these days are not reimbursed to the employer in one way or another at the expense of the Social Insurance Fund. Further, the employer’s obligations are reduced only to the transfer of documents to the territorial body of the Social Insurance Fund, namely the sick leave itself, as well as a certificate of the amount of the employee’s earnings for the previous two years. After receiving these documents, social insurance pays sick leave directly to the employee’s personal account. Accordingly, the employer faces obligations to withhold personal income tax in such a scheme only when paying for the first three days of sick leave.
Is sick leave for pregnancy and childbirth subject to personal income tax?
What taxes should be paid on maternity benefits? This type of income is an independent position relative to the legislative list. Therefore, these payments are not subject to personal income tax.
The size of these payments is the maximum possible. In this regard, they are less than the salary that the employee received. Wanting to help, some enterprises conduct social programs, while paying extra from their own budget. In this case, income tax will be withheld from the amount paid.
To avoid the accrual of personal income tax, the employer has the right to provide the employee with financial assistance, which, based on Art. 217 of the Tax Code of the Russian Federation is not subject to taxes. Its maximum allowable amount is 50,000 rubles per year after the birth of the child. This benefit is paid as a lump sum and can only be offered to one parent.
Is income tax taken from sick leave for child care?
Only one person directly caring for a child is entitled to receive child care benefits. It is provided until the child reaches one and a half years of age. Its size depends on average earnings, of which only 40% is paid.
By law, maternity benefits are not subject to personal income tax, that is, the employer does not need to calculate the amount transferred to the budget and does not need to transfer the amount of personal income tax. An exception is possible here only in the case of an additional payment by the employer up to average earnings, when it is above the established limits.
Contributions levied by the employer
Taxation on sick leave in 2017-2018 is determined by the provisions of the Tax Code of the Russian Federation. Due to the fact that payments based on a document confirming incapacity for work are made by the employer, he must withhold income tax. Accordingly, the employee receives compensation, from which personal income tax has already been deducted.
Payment of sick leave to a part-time worker. Registration, calculation and amount of benefits
The organization pays only for the first 3 days of sick leave. The remaining days until recovery will be compensated by the Social Insurance Fund. This means that the tax is collected from the amount that is accrued to the employee for the first 3 days of his being on sick leave.
Taxes on sick leave compensation are calculated in the same way as they are levied on accrued wages.
Personal income tax on sick leave is calculated at a rate that is 13%.
Attention! The employee can receive compensation under the document within 6 months. from the date of return to work after recovery, since the duration of sick leave is limited to the above period.
Term and date of withholding personal income tax from sick leave
From the beginning of 2021, the transfer of personal income tax from sick leave and vacation pay must be made no later than the last day of the month in which they were paid.
Correctly filling out the 2-NDFL certificate
In order to correctly issue a certificate reflecting personal income tax on sick leave, you should take into account the advice of the Federal Tax Service. The 2-NDFL certificate must indicate all income received for the required period.
Subsection 3 of the document is filled out as follows:
- in the “month” field, enter the serial number of the month and the amount of funds received;
- the salary amount is displayed for the current month, and the receipt on the certificate of incapacity for work is displayed for the previous month, in which the employee was sick;
- a special code is defined for each amount. The salary is displayed by code 2000, and the amount of compensation by code 2300.
Is sick leave taxable?
According to the law, sick leave is subject to income tax, the amount of which in 2021 is 13%. This transfer must be completed within a certain period. Now the payment must be no later than the end of the month in which the compensation was paid. Transfers must be completed within the following deadlines:
- when the company received the compensation amount, if the withdrawal took place from a bank account;
- when the amount is transferred to the employee’s account when sending sick leave immediately to the bank account;
- the next day after the provision of compensation from the cash register.
Thus, sick leave sheets have their own procedure for calculation and then accrual to employees. In cases of illness, they must be subject to personal income tax, the amount of which is transferred to the state budget. If there is sick leave for pregnancy and childbirth or child care, then the accrual of personal income tax is not provided.
Personal income tax accounting
To account for personal income tax, you first need to calculate the amount of withholding. You need to do it like this:
- The salary for the previous 2 years is added up, and the resulting total is divided by 730 (the number of days in 2 years). Salaries received in the current year are not taken into account in calculations (see “Gray salary” - responsibility of the employer and employee, consequences);
- the calculations from the previous paragraph gave us the average income for 1 day;
- the average income is multiplied by the number of days spent on forced short-term leave;
- The result was an amount that constitutes sick leave income. But only an employee with more than 8 years of insurance experience will receive it in full. If the years worked are from 5 to 8, then 80% of the amount received is paid, and if less than 5 years, then the payment will be 60%.
If a person did not work for the previous 2 years or did not present a salary certificate, then the calculation will be made as follows:
- the amount of the minimum wage (SMW) is taken and multiplied by the number of days that the employee spent on sick leave;
- divide the amount by the number of days in the month in which the employee was sick;
- the amount received is the average income;
- the following calculation scheme is similar to that described above;.
- the final amount is paid in full, regardless of length of service.
Compensation for a document confirming temporary disability is calculated within 10 days after it is submitted to the organization, and is paid along with the salary following the benefit.
