After plenty of modifications in the maternity benefits here in the Philippines, Senator Risa Hontiveros announced that the maternity benefits under the Expanded Maternity Leave (EML) law is now tax-free. This basically means that working women who are expectant mothers can enjoy tax-free maternity benefits in the future.
The Bureau of Internal Revenue (BIR) announced that the EML is exempted from both the withholding and the income tax in the salary differential provision. Moreover, this means that expectant mothers would be able to allot what they traditionally pay for taxes for the nurturing of their child.
What is the Expanded Maternity Leave?
The Expanded Maternity Leave (EML) is a law that was authored originally by Senator Risa Hontiveros. This law does many things for the future and expecting mommies such as:
- 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.
Hontiveros said that this is what her early Christmas gift is to all expectant mothers out there and to their families, of course. She continued to explain that this law can greatly benefit mothers to keep their babies healthy.
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. Healthy hindi lamang si nanay at ang kanyang baby, healthy din pati bulsa.”
In Translation: This is an early Christmas gift to working mothers and families. This comes at a time when we pay so many taxes. The expanded maternity leave benefits are now tax-free for women. This way, mothers can ensure that their babies are healthy too, just like them; and it’s not hurting the pocket.
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.
Clarification in the exemption from income tax and withholding tax
BIR’s memorandum circular 105-2019 which was posted last week, straightens the fact that the tax treatment for the salary differential of the maternity leave of female workers will be considered as a benefit that would exempt them from both withholding and income taxes.
Caesar R. Dulay, BIR Commissioner, clarified this by saying that female workers are given not just 100 percent of their salary, but the full salary with the tax exemptions in the component.
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.”
In continuation, the department is saying that the women who are covered by the exemption in taxes are the working women who are earning a salary, above the SSS benefits. Moreover, if their employers are required to pay the difference between their actual salaries and the SSS benefits.
A new welcome for future mothers
Sen. Hontiveros said that this is very good news for future mommies who would have soon-families. She said that with the tax-free maternity benefits, mothers not just be equipped in nurturing their child in terms of a biological sense; they would be able to financially support them as well.
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. This is truly an early Christmas gift to all working mothers and their families.”
What do you think about the fact that the BIR makes tax-free maternity benefits for all expectant mothers? Is this fair considering the fact that millions of mothers already experienced the traditional benefit? Can this change the course of the Philippine economy in becoming more productive and reliable?