Is sick leave subject to personal income tax at the expense of the Social Insurance Fund in Russia in 2021?

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.

Rules for filling out lines in form 6-NDFL

The table below shows a clear example of how sick leave payment can be reflected in Form 6-NDFL. This report is prepared when income tax is collected on such payment.

Read also: How to issue an invoice for payment

Attention! If it coincides with a Saturday or other weekend, the transfer of personal income tax to the Federal Tax Service of the Russian Federation is postponed to the next specific working day (Clause 7, Article 6.1 of the Tax Code of the Russian Federation).

Article 6.1 of the Tax Code of the Russian Federation “Procedure for calculating the deadlines established by the legislation on taxes and fees”

Filling out a report: example

Below is a clear example of how sick leave payments and the corresponding tax payment are reflected in Form 6-NDFL.

After recovery, worker Sidorov A.G. was issued a certificate of incapacity for work for the following period - July 13-26, 2021. Sidorov reported to work on July 27 and immediately gave this document to the accountant.

After making calculations for sick leave, on July 27, 2021, the employee was credited with 24,500 rubles. This money was transferred to the employee’s salary card on the day the monthly salary was issued - August 7, 2017.

All of the above transactions were indicated in the 6-NDFL report for 9 months. 2017 They did it this way:

Additional payment up to average monthly earnings

If, when transferring sick leave money to an employee’s salary card, an additional payment is made up to the average monthly earnings, then income tax is collected in the general manner (Articles 217, 226 of the Tax Code of the Russian Federation).
In this situation, personal income tax is withheld at a rate of 13%. Important! Supplement to average earnings is considered a legal procedure in which, if the employee’s salary level decreases, the employer pays him the required amount. As a result, the employee’s monthly income reaches a specific average value.

Payments for closed sick leave are calculated based on the average monthly salary of a worker for the last 2 years that precede the onset of illness (Part 1, Article 14 of Federal Law No. 255 of December 29, 2006). When calculating such a benefit, it is taken into account that the amount of wages for one year should not exceed the specific maximum amount of various insurance contributions to the Social Insurance Fund.

The provision of additional payment is indicated in the employment contract (agreement) with the employee or in a separate specific regulatory act.

Federal Law of December 29, 2006 No. 255-FZ “On compulsory social insurance in case of temporary disability and in connection with maternity”

Taxation of sick leave for caring for a disabled child

Often, an employee is paid for a certificate of incapacity for work, which is opened in connection with caring for one or more disabled children. However, many parents do not know whether closed sick leave is subject to personal income tax.

Read also: Appealing the decision of the tax authority

In Art. 217 of the Tax Code of the Russian Federation reflects a list of payments that are not subject to personal income tax. Sick leave issued when caring for one or more disabled children is not on this list. Accordingly, payments for such certificates of incapacity for work are also subject to taxation.

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.

Is tax paid for sick leave paid from the Social Insurance Fund?

If a specific region of the Russian Federation participates in the official FSS pilot project (Order of the FSS of the Russian Federation No. 578 of November 24, 2021), then the following rule is applied: the first three days of illness are paid from the fund of a specific enterprise, and all the rest - from the FSS.
Personal income tax is withheld in both the first and second cases. Read also: Is it possible to refuse an electronic work book?

Sick leave is paid for at the expense of a specific amount of funds from the Social Insurance Fund already in the first days in the following situations:

• when caring for a child;
• in the event of a specific accident at work;
• during prosthetics in a hospital;
• in the event of an occupational disease;
• when the employee himself, or 1 or several of his children under 7 years old who go to kindergarten, etc., go into quarantine.

Regardless of the validity period of a specific certificate of incapacity for work, only the employer - a specific company - is considered a tax agent when paying personal income tax. Personal income tax is withheld and transferred to the Federal Tax Service of the Russian Federation from the entire amount of benefits under this medical certificate.

Order of the Federal Insurance Service of the Russian Federation dated November 24, 2017 N 578 “On approval of the forms of documents used for the payment of insurance coverage and other payments in 2012 - 2021 in the constituent entities of the Russian Federation participating in the implementation of a pilot project providing for the appointment and payment of compulsory social insurance coverage to insured persons insurance in case of temporary disability and in connection with maternity and for compulsory social insurance against accidents at work and occupational diseases, other payments and expenses by the territorial bodies of the Social Insurance Fund of the Russian Federation"

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

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.

General concepts

If a citizen is officially employed, then he receives all social guarantees provided for by the laws of the Russian Federation. One of them is the possibility of payment for the period during which the employee could not perform official duties due to temporary disability, i.e. diseases (Labor Code of the Russian Federation, Art. 182).

Confirmation that the employee was really sick or was caring for close family members is a document - a sick leave certificate issued by medical organizations.

Law 232-FZ (dated November 21, 2011) extends the possibility of issuing a sick leave not only for ordinary illness. The document may be required in the following cases:

• in case of injury;
• in case of acute poisoning;
• to look after a sick family member;
• in cases of undergoing follow-up treatment in sanatoriums;
• if prostheses are installed in a hospital;
• in case of adoption of a child.

There may be other health conditions for which a certificate of incapacity for work can be issued.

It is important to know! Since the payment compensates the employee for part of his earnings, the question arises about the need to withhold personal income tax from sick leave.

Personal income tax is an income tax that is established at the federal level and amounts to 13 percent of the income received by a person, in particular his wages. This part is automatically deducted from it, and the employees are given a salary minus the amount transferred to the budget. Personal income tax is determined at the same rate for all workers, regardless of the earnings received.

Taxation on sick leave

The Tax Code (Article 217) indicates those payments from which personal income tax cannot be withheld. These include social benefits: pension, compensation for harm, scholarships and others.

Personal income tax is not deducted from bonuses, compensation for unused vacation, payments for travel expenses, settlements with charitable organizations and volunteers. A certificate of incapacity for work is not included in this list; sick leave is by law subject to personal income tax in the amount of the generally established 13 percent.

The general rules for paying sick leave, prescribed in regulations, are as follows:

• three days of incapacity for work must be paid at the place of duty from the enterprise’s payroll fund;
• the rest of the period of illness is compensated by the Social Insurance Fund, or rather by the insurance premiums that we pay monthly from our salary;
• the payment must be accrued within 10 days from the date of submission of the document;
• The transfer of money to the employee is made on the first payday (advance and salary).

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.