Taxation of sick pay

The taxation of sick leave compensation in the part that concerns the payments made by the employer has remained confusing for many. We add some clarifications.

The employer must pay compensation to the employee from the 4th to the 8th day of illness from the average salary of 70%. Compensation is subject to income tax only. Social, collective pension and unemployment insurance payments are not paid from this benefit.

To clarify the law: Occupational Health and Safety Act (TTOS) § 122 at the same time allows the employer to pay compensation up to 100% of the average salary. Therefore, the payment of sickness benefit in the amount of the average salary is also taxed only with income tax.

The same benefits also apply to the members of the management board or the members of the management body replacing it. The benefit given to persons working on the basis of other agency and employment contracts does not extend.

You can read more from here.