Maternity pay in Ireland: how employers handle it
Reviewed by Mellow Editorial Team, HR & payroll content team
Maternity pay in Ireland is split between a state benefit paid by the Department of Social Protection and any additional pay an employer chooses to offer on top. Employers do not fund Maternity Benefit themselves, but they do have clear administrative and payroll obligations throughout an employee's leave.
How Maternity Benefit works
Maternity Benefit is a payment made directly by the Department of Social Protection to the employee. It runs for 26 weeks of ordinary maternity leave. There is also an optional 16 weeks of additional unpaid maternity leave, which the employee can take but during which no state benefit is paid.
The employee claims Maternity Benefit themselves, typically at least six weeks before their expected leave start date. The form (MB1 or the online equivalent) requires a section completed by the employer confirming the leave dates and PRSI history. Your role is to complete that section accurately and promptly — delays on your end slow the employee's payment.
The employer's payroll obligations during leave
Once the employee starts maternity leave, you stop paying their normal salary — unless your company policy includes a top-up. You also stop the payroll deductions that go with that salary: income tax, USC, and PRSI.
Because the employee is no longer on your payroll in the usual sense, Revenue's real-time reporting requirement still applies to anything you do pay. Every submission to Revenue must go through ROS on or before the date of any payment. If the employee is on full unpaid leave and receiving nothing from you, there is nothing to report for that period.
One point employers sometimes miss: while an employee is on maternity leave, employer PRSI contributions at 11.15% continue to accrue in respect of the employee's PRSI record for certain purposes — but because no salary is being paid, no actual PRSI liability falls on you during unpaid periods. Where a top-up is paid, PRSI applies to that top-up in the normal way.
Company top-up pay: what you need to know
There is no statutory obligation to pay anything above Maternity Benefit. However, many employers offer a top-up, and if yours does, there are a few things to handle carefully.
If you top up the employee's pay so that the combined total of Maternity Benefit plus your payment equals their normal salary, you simply pay the difference. That difference is processed through payroll in the usual way — income tax at 20% up to the standard rate band (around €44,000 for a single person) and 40% above it, USC at the applicable banded rates, and PRSI at the employee rate of approximately 4.1% and employer rate of 11.15%.
Maternity Benefit itself is taxable but is not subject to USC or PRSI. Revenue applies the employee's tax credits against the benefit directly, so when you calculate a top-up, you need to account for the tax already being collected on the state payment. Practically, this means co-ordinating with Revenue (through the employee's tax credit certificate) so the employee is not overtaxed. Payroll software connected to ROS will generally handle this, but it is worth verifying the setup before the employee goes on leave.
Annual leave and other entitlements during maternity leave
Statutory annual leave — 4 working weeks per year — continues to accrue during maternity leave. The employee does not lose leave entitlement simply because they are absent. If their leave spans two leave years, entitlements carry over. You should factor this into your resourcing and any holiday pay calculations when they return.
Other employment protections also apply throughout. The employee retains the right to return to the same role, or a suitable alternative if that is genuinely not practicable. Their terms and conditions cannot be worsened because they took leave.
Preparing before leave starts
Getting the admin right before the employee leaves saves problems later. A practical checklist:
- Confirm the expected leave start and return dates in writing.
- Complete your section of the Maternity Benefit claim form promptly.
- Review your payroll setup: stop the normal pay run entry, and if you are paying a top-up, set up the correct tax treatment.
- Check that the employee's tax credit certificate reflects the Maternity Benefit position.
- Note any pension contributions — if the employee is enrolled in a workplace scheme, check your scheme rules on what happens to contributions during leave. With pension auto-enrolment under My Future Fund being introduced from 2026, this is worth revisiting if your workforce will be affected.
- Agree how annual leave accrual will be tracked and when it can be taken on return.
Clear communication with the employee before they leave, and a tidy payroll setup, are the two things that prevent most of the common problems employers run into with maternity leave administration.
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