Fabian Demicoli

The New Maternity Leave Fund – New 0.3% contribution due from 6th July 2015

GRTU still insisting employers should not pay twice
As announced in the last budget, Government introduced the Maternity Leave Fund to address concerns related to discrimination based on gender at hiring stage. Government was concerned that employers might have preferred employing men rather that women so as not to incur wage costs covering the fourteen weeks of maternity leave. With the new system of 
the Maternity Leave Fund, every employer will be paying a 0.3% contribution on the basic wage of every employee irrespective of the sex.

Contributions have are due from the 6th July 2015. If an employee is already on her maternity leave during this time, employers will start paying the contribution from this date and so they will be entitled for a reimbursement for those weeks of maternity leave availed of after the 6th of July 2015.

Unfortunately the system still foresees for employers to continue also paying maternity leave directly to their employees and then apply for a refund. GRTU believes this is an unnecessary burden on employers and is meeting Government to address its concerns.

Here are some examples of how this new contribution is calculated:

Example 1: A Financial Services company employing a female worker in a managerial role with a basic pay of €35,000 and other allowances/fringe benefits amounting to €5,000. In this case the employer will be paying a contribution in accordance to the maximum capped amount of €65 per year. The average basic pay amounts to €673.08 per week. The full amount that will be refunded to the employer, through this Trust fund, will amount to €9423.12 during the 14 week period of maternity leave. 

Example 2: A retail outlet employs a sales assistant with a basic pay of € 12,000. In the case, the employer will be paying a contribution of 0.3% over the 10% NI paid by the employer which will approximately amount to €36 annually. The average basic pay will amount to €230.77 per week.   The full amount that will be refunded to the employer, through this Trust fund, will amount to €3230.77 during the 14 week period of maternity leave.

 

Private sector employers are obliged to pay a contribution for each employee to the maternity fund as shown in this table:

 

Category

Type of employee

Weekly contribution rate to be paid by employer

A

Persons under 18 years of age whose basic weekly wage does not exceed €166.26.

 €0.20c

B

Persons over 18 years of age whose basic weekly wage does not exceed €166.26

€0.50c

C

Persons born on 31 December 1961 or before whose basic weekly wage exceeds €166.26 but does not exceed €343.11.

 

0.3% calculated to the nearest cent of their basic weekly wage

Persons born 1 January 1962 or after whose basic weekly wage exceeds €166.26 but does not exceed €418.25.

D

Persons born on 31 December 1961 or before whose basic weekly wage exceeds €343.11.

€1.03c

Persons born 1 January 1962 or after whose basic weekly wage exceeds €418.25.

€1.25c

E

Persons under 18 years of age who are following a full-time course of studies or instruction under the Student-Worker Scheme, or other similar schemes (incl. The Extended Skills Training Schemes, but excl. The Worker-Student Schemes) involving distinct work and study periods for which they are receiving remuneration.

0.3% calculated to the nearest cent of the basic weekly remuneration up to a maximum rate of contribution of €0.13c.

F

Persons over 18 years of age who are following a full-time course of studies or instruction under the Student-Worker Scheme, or other similar schemes (incl. The Extended Skills Training Schemes, but excl. The Worker-Student Schemes) involving distinct work and study periods for which they are receiving remuneration.

 

0.3% calculated to the nearest cent of the basic weekly remuneration up to a maximum rate of contribution of €0.24c.

This contribution is to be paid every month to the Inland Revenue Department through the FS5 form. Consequently a new line has been added in the FS5 form, indicating the amount paid by the employer towards this fund. A copy of the new FS5 is downloadable from the Inland Revenue Department’s website https://ird.gov.mt/downloads/dlindex.aspx

If you have any questions about this fund, you may contact Ms Elaine Schembri on .

 

 

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