Is sick leave (sick leave) subject to personal income tax?

Any staff member may be temporarily unable to work due to illness or caring for an unhealthy family member. During this period, drawn up with a special document - a certificate of incapacity for work - the employee does not perform his immediate duties, but still receives money in the amounts specified by law.

Do I need to withhold personal income tax from these funds?
How is this reflected in the company's accounting documents?
What exactly are the funds used to make up this tax payment?

Find out from the article.

Is personal income tax withheld and paid on sick leave?

The answer to the question of whether sick leave is subject to personal income tax is contained in paragraph 1 of Art.
217 Tax Code of the Russian Federation. Temporary disability benefits are excluded from the list of payments not subject to personal income tax. Since the document confirming the employee’s incapacity for work is a certificate of incapacity for work, personal income tax is calculated from the sick leave. Let us recall payments that are not subject to personal income tax (Clause 1, Article 217 of the Tax Code of the Russian Federation):

lump sum maternity benefit;
monthly allowance for child care up to 1.5 years;
monthly compensation for child care up to 3 years old.

A ready-made solution from ConsultantPlus will help you calculate and pay sick leave to employees, including in unusual and difficult situations. Get trial access to the K+ system and immediately see expert recommendations. It's free.

Certificate of incapacity for work and insurance payments

Since 2021, issues related to pension and health insurance are regulated by the Tax Code

, namely
chapter 34
.
However, this did not affect the essence of the matter, and now, as in previous years, insurance premiums are not charged from sick leave. speaks about this .
422 clause 1.1 .:

“Not subject to insurance premiums for payers specified in subparagraph 1 of paragraph 1 of Article 419 of this Code
:
state benefits paid in accordance with the legislation of the Russian Federation, legislative acts of the constituent entities of the Russian Federation, decisions of representative bodies of local government, including unemployment benefits, as well as benefits and other types of compulsory insurance coverage for compulsory social insurance.”

Contributions are not made to any government agency, including insurance against work-related injuries. This is evidenced by clause 1.1 of Art. 20.2 of Law No. 125-FZ

, the text of which repeats the Tax Code.

Attention

! Contributions are not accrued in any case, regardless of who pays the compensation, the employer or the Social Insurance Fund.

Is income tax taken from sick leave in 2020-2021 or not?

Are sick leave subject to personal income tax? Yes, and the personal income tax rate for this type of payment has not changed: in 2020-2021, as before, it is 13%.

Since sick leave is subject to personal income tax, the tax base for calculation is the amount of temporary disability benefits in full (letter of the Ministry of Finance of Russia dated June 17, 2009 No. 03-04-06-01/139).

Important! Starting from 2021, the employer accrues and pays sick leave only for the first 3 days and only pays personal income tax from this amount. The remaining portion of the benefit is paid directly to the employee by the Social Insurance Fund. He also withholds personal income tax from her. In cases where the FSS issues 100% of the benefit, it withholds tax from the entire amount. For more details, see our memo on the new rules for paying benefits from 2021.

Accountants sometimes have doubts whether to withhold personal income tax from sick leave as when assessing wages, or are there differences? Please note that deductions here are carried out in a special manner, different from deductions from an employee’s salary.

The difference is that sick pay is included in taxable income in the month of payment (clause 1 of Article 223 of the Tax Code of the Russian Federation). There are also differences in the procedure for paying personal income tax from sick leave to the budget. But more on that below.

In business practice, there are circumstances in which employees working at the enterprise fell ill after concluding civil contracts with them. A reasonable question arose: is personal income tax paid on sick leave for such employees? It should be borne in mind that employees with whom civil contracts have been concluded should not be paid sick leave. Accordingly, there is no need to accrue or pay personal income tax.

Whose amounts are taxable?

As a general rule, funds to pay for sick leave to the employee who presented it are taken from two sources:

the first three days of incapacity for work are paid at the expense of the employer;
the rest of the sick leave period is financially compensated by the compulsory health insurance fund.

In accordance with the procedure prescribed by law, the accounting department calculates to the employee the amount due for payment, consisting of the employer’s money and the Federal Compulsory Compulsory Medical Insurance Fund. Before writing out the amount to be accrued, the tax agent, that is, the employer, deducts the required 13% income tax from this amount.

After this, the employer submits an application to the Health Insurance Fund for reimbursement of sick leave payments, for which a special form 4-FSS is provided.

Direct sick leave payments in certain regions

Since 2012, a pilot project has been operating in some regions of the Russian Federation, according to which it is possible to avoid the “redirection” of funds by paying the “social insurance” part of the money to the employee directly, and not through the employer. It operates on the basis of Decree of the Government of the Russian Federation dated April 21, 2011 No. 294. The purpose of this project:

more efficient distribution of money from the budget;
protecting the interests of employees from possible abuses by the employer;
fraud avoidance;
maximum exclusion of erroneous calculations.

The list of regions participating in the pilot project is given on the official website of the Social Insurance Fund.

Taxation of “direct” disability payments occurs with some nuances:

the first three days of sick leave are paid by the employer, accordingly, withholding personal income tax from compensation only for these days of incapacity;
The rest of the time of illness or care for a family member is compensated by the FSS, acting as a tax agent in relation to the employee receiving payments, that is, transferring the 13% required by law to the tax authorities before the funds are paid.

What period and date of personal income tax withholding are established for sick leave and vacation pay?

The deadline for paying sick leave tax is no later than the last day of the month in which the benefit was paid.

The withheld personal income tax must be shown in the 6-NDFL report. ConsultantPlus experts explained how to determine the date of actual receipt of sick leave income for calculating 6-NDFL. Get free demo access to K+ and go to the Ready Solution to find out all the details of this procedure.

By the way, a similar procedure and payment deadline is provided for personal income tax on vacation pay: the tax should be withheld and transferred to the budget no later than the last day of the month when the vacation pay was issued.

About the deadline for paying personal income tax

Procedure for retention and transfer

The responsibility for withholding personal income tax is assigned to tax agents, so a change in status automatically shifts the responsibility. This applies to a pilot project, when the calculation bypasses the employer, who in the standard case performs a transit role.

Neither the employer nor social insurance pays for sick leave if the person is not on the payroll, but is registered under a civil law agreement. The presence of a concluded employment contract is a prerequisite for calculating benefits (Article 183 of the Labor Code of the Russian Federation), otherwise the business entity loses the status of a tax agent. To receive funds, an external part-time worker must provide a separate sick leave form.

Accrual and payment terms

The obligation of an enterprise or entrepreneur is to accrue benefits within a ten-day period from the moment a closed certificate of incapacity for work is submitted to the organization and payment simultaneously with the first receipt of funds for wages.
Personal income tax is accrued at a rate of 13% on the date of actual receipt of income by the employee (clause 1 of article 224 and clause 3 of article 226 of the Tax Code of the Russian Federation). From 2021, the established rate applies to both residents and non-residents.

If sick leave is issued due to the illness of the insured person, then deduction is made from payments in the context of:

the first 3 days at the expense of the business entity;
financing by social insurance for the remaining period.

The deadline for transferring personal income tax to the budget is the last day of the month in which the payment to the employee took place (clause 6 of Article 226 of the Tax Code of the Russian Federation). If the specified date falls on a weekend or holiday, it is transferred to the first working day of the next month.

Participation in the pilot project

A special feature of the pilot project is the payment directly between social insurance and the employee, bypassing the enterprise. The joining of a region to the program determines the tax agent obligated to transfer tax to the budget:

Transfer by social insurance. If a region participates in a pilot project, then the Social Insurance Fund is responsible for paying taxes to the budget:

in full if financing is provided from the first day without the participation of the employer;
partially, if the sick leave is issued for a general illness or domestic injury of the insured person, which in the context of the first three days is subject to payment at the expense of the organization.

Transfer by business entity . If the territory is not joined to the pilot project, then the tax agent is the employer, whose responsibility is to pay the tax to the budget with further offset with the social insurance fund.

Conditional Numerical Example

The employee provided the employer's organization with a certificate of incapacity for work for a general illness in January 2021, according to which, within 10 days:

Benefits have been accrued in the total amount of 20,000 rubles. (2000 rubles (for one day) x 10 days), including:

6000 rub. (2000 rub. x 3 days) – at the expense of the employer;
14,000 rub. (2000 rub. x 7 days) - at the expense of the social insurance fund.

Personal income tax withheld in the amount of 2600 rubles. (20000 x 0.13), including:

780 rub. (6000 x 0.13) – from the benefit paid by the policyholder;
1820 rub. (14000 x 0.13) – from funds financed by the insurer.

The employee received it in his hands on 02/05/2020. 17400 rub. (20000 – 2600), including:

5220 rub. (6000 – 780) – at the expense of the business entity;
12180 rub. (14000 – 1820) – at the expense of social insurance funds.

Since the payment was made in February, by the end of the month the policyholder is obliged to transfer the entire amount of withheld personal income tax to the budget in the amount of 2,600 rubles, and then offset it with the insurer. If the enterprise were joined to the pilot project, then the insurer’s obligation would be limited to issuing 5,220 rubles. and transfer of tax in the amount of 780 rubles. The employee must receive the remaining funds through the social insurance fund, which acts as a tax agent with the obligation to remit taxes.

Temporary disability benefit – personal income tax and additional payment up to average earnings

If, when calculating temporary disability benefits, an additional payment is made up to average earnings, then the corresponding personal income tax on sick leave is paid in the general manner (Articles 217, 226 of the Tax Code of the Russian Federation). Both officials and judges came to this conclusion (letters from the Ministry of Finance of Russia dated 05/06/2009 No. 03-03-06/1/299, dated 02/12/2009 No. 03-03-06/1/60, dated 12/24/2008 No. 03- 03-06/1/720, resolution of the Federal Antimonopoly Service of the North-Western District dated 07.07.2008 No. A26-2542/2007).

Thus, to the question posed at the beginning of the article, whether personal income tax is withheld from sick leave, the answer will be unequivocal: undoubtedly, yes.

Calculation example

The employee was sick for 5 days. The total income for the last two calendar years is RUB 548,650. Work experience - more than 20 years. The organization is located in Tatarstan, where a “pilot project” operates. Calculation algorithm:

548,650 / 730 = 751.58 rubles. — payment for one day of sick leave;
751.58 × 3 = 2,254.74 rubles. - amount paid by the employer;
2,254.74 × 13% = 293.12 rubles. — personal income tax, which is withheld by the organization;
751.58 × 2 = 1,503.16 - amount paid by the Social Insurance Fund;
1,503.16 × 13% = 195.41 - personal income tax, which is withheld by the Social Insurance Fund.

It turns out that the employee will receive compensation in the amount of 3,269.37 rubles for sick days. two payments: from the employer - 1,961.62 rubles. (2,254.74 - 293.12), from the Social Insurance Fund - 1,307.45 rubles. (1,503.16 - 195.41). The Employer and the Fund will pay taxes separately. The total amount will be 488.53 rubles.

Temporary disability benefits are considered employee income

, this confirms the inclusion of these payments in the certificate in form 2-NDFL.
Accordingly, it is taxed. The only exception is maternity leave
. The employer pays the tax; the employee himself does not take part in this process. No insurance premiums are transferred from the certificate of incapacity for work.

Results

Payment for sick leave, with the exception of maternity benefits, is subject to personal income tax, regardless of the source of its payment (employer or Social Insurance Fund).
The employer's personal income tax on sick leave benefits must be withheld upon payment and transferred to the budget no later than the last day of the month in which the benefits were paid. When paying benefits for sick days, starting from the 4th day, the Social Insurance Fund will withhold and transfer it to the budget independently. You can find more complete information on the topic in ConsultantPlus. Free trial access to the system for 2 days.

Exceptions

However, there are situations when contributions are still paid. Some organizations provide their employees with additional guarantees beyond those established by law.

These may include 100%

payment of sick leave to all employees, regardless of
length of service
.
For example, if an employee has short experience, which allows the law to receive benefits in the amount of only 60%
, the organization transfers compensation in full, paying the difference from its own funds.
Since such an additional payment is not a state benefit, insurance premiums are charged on it ( clause 1.1 of Article 420 of the Tax Code of the Russian Federation
).

Also covered by insurance premiums are benefits that cannot be credited to the Social Insurance Fund. This happens when:

compensation was paid in violation of the law;
there are errors that were made when filling out documents;
There are no supporting documents ( Part 4, Article 4.7 of Law No. 255-FZ
).

The FSS does not recognize such payments, which means that insurance payments must also be transferred from them.

general information

A temporary disability certificate allows a citizen to officially not go to work for a certain period of time and at the same time save a certain percentage of his salary.

The attending physician of the employee (child – when applying for sick leave for child care) has the right to draw up this document.

A temporary disability certificate allows a citizen to receive benefits. Its size depends on many factors.

Every citizen of the Russian Federation who carries out official work activities on the basis of a concluded employment contract has the right to issue a sick leave in the following situations:

in case of illness;
in case of industrial injury;
if there is a need to care for a child or close relative;
in connection with pregnancy and childbirth.

Representatives of other states can also draw up this document and receive the required benefits in the event of:

injury at work;
development of occupational disease;
under other circumstances related to the field of activity in which the foreign citizen works.

Definitions

Basic concepts and terms:

Concept	Definition
Sick leave	A document confirming the fact of a citizen’s temporary disability for a certain period of time, allowing him to receive a certain percentage of his salary
Personal income tax	Tax levied on income received by individuals
Employment contract	A document establishing the basic rights and obligations between a citizen and a legal entity or individual entrepreneur with whom he has a working relationship
Work injury	Physical injury suffered by employees in the course of performing their job duties.

What taxes are withheld?

According to the provisions of the first paragraph of Article 217 of the Tax Code of the Russian Federation, temporary disability benefits are not included in the list of payments that are state benefits.

Consequently, these contributions are classified as income of individuals and are subject to a corresponding tax of thirteen percent of the amount.

This rule is valid from January 1, 2007. Until that moment, personal income tax was not withheld from compensation for temporary disability.

In what cases is it not taken

However, the collection of personal income tax from compensation to an employee in connection with his temporary disability cannot be called carried out in a general manner.

This is because there are exceptions. Personal income tax is not withheld from a number of temporary disability benefits.

These include:

Unemployment benefit	If a citizen who is registered with the employment center has issued a sick leave, then personal income tax is not charged on the payment due to him.
Hospital benefits in connection with pregnancy and childbirth (maternity benefits)	A woman in a position receives benefits in full without deducting thirteen percent

Why do you need sick leave?

The temporary disability form is filled out by the medical institution where the sick person went. Receiving it is a guarantee of payment of compensation for the entire period when the employee was absent from the enterprise due to illness. Also, a completed sick leave confirms the employee’s recovery, as a result of which he can return to work.

The issuance of each certificate of incapacity for work is subject to strict control. It can only be obtained from a specialized medical institution that has the right to issue such documents.

It should be remembered that sick leave will not be issued to:

• dispensaries and sanatoriums; • specialized stations involved in blood transfusion; • institutions carrying out forensic medical examinations; • doctors and paramedics; • employees of preventive centers and disaster medicine; • employees of emergency departments of city hospitals.

2-NDFL no more

In 2021, instead of 2-personal income tax, employers will issue employees a new form, “Certificate of income and tax amounts of an individual.”
A separate report no longer exists; the certificate has become an appendix to the calculation of 6-NDFL, which is submitted annually. The format and procedure for filling out the new form were approved by Federal Tax Service order No. ED-7-11/753 dated October 15, 2020, which states which sick leave code in the 2-NDFL certificate to indicate to tax agents. The new application from 6-NDFL and the previous form 2-NDFL differ slightly. The new form no longer contains fields for entering data about the tax agent; they are indicated on the title page of 6-NDFL. The field “Amount of tax not withheld by the tax agent” was removed and a new separate section 4 “Amount of income from which tax was not withheld by the tax agent and the amount of tax not withheld” was introduced. In section 3 on deductions, fields have been added for entering information about notifications from the Federal Tax Service.

The procedure for coding income has changed slightly, but the sick leave code in the 2-NDFL certificate has not changed in 2021.

For more information about the design of the new form - “Certificate 2-NDFL in 2021: form, codes and procedure for issuing to employees.”

Features of paying income tax when paying from the Social Insurance Fund

Compensation from the fourth day is paid from the reserves of the Social Insurance Fund, formed during the work of the payer. However, the employer actually pays the money: the Social Insurance Fund simply transfers the funds to the organization’s account, then the amount received is paid to the citizen minus tax.

The exception is the regions in which the “Pilot Project” was launched. Its functions allow citizens to receive benefits directly through the Social Insurance Fund, and the same organization is responsible for transferring personal income tax.

Sick leave: payment features

Why is temporary disability benefits often less than the average employee’s salary? It's all a matter of counting order. To calculate sick leave benefits, the two years preceding the current one are taken. This means that sick leave, which begins in 2021, is paid from the salaries of 2015 and 2016. It’s worth being surprised here, because wages in most cases are growing, indexed, and the employee in 2017 receives larger sums than in previous years. However, to calculate sick leave, the past years are taken. This is the main reason for the low payout amount.

In this case, the entire amount of wages is also divided into seven hundred and thirty days, that is, by the total number of days for two calendar years. And again, not only working days are taken into account, but also weekends. However, this can be slightly compensated by the fact that all sick leave days are paid, even if the employee had to rest during this period, for example, during shift work.

It is not profitable for those who have the highest salary to take sick leave. So it’s worth checking out what the maximum amount of total salary per year is for each specific year. If the employee’s total payment amount was higher, then he loses money.

But those who receive the minimum wage need not worry. The minimum amount of sick pay is also regulated. However, depending on the length of service, it can also be reduced.