You can get certain types of income and still keep your full entitlement to paid parental leave, but make sure you use the right tax code.
Income that does not affect your entitlement
In general, you need to be off work and on parental leave to get paid parental leave payments.
But you can still keep your full entitlement if you get certain types of income, including:
- top-up payments from your employer to boost your parental leave entitlements
- payments for keeping in touch hours
- payments for any work you did before you started paid parental leave.
Make sure you use the right tax code
Paid parental leave payments are treated as salary and wages, so they’re taxable just like employee income or self-employed income.
If you get other income when you’re on parental leave, you need to use a secondary tax code on either your income or your paid parental leave payments, whichever is smaller.
If you need to change your tax code with your employer, complete an IR330 Tax code declaration form and give it to them.
If you need to change the tax code on your paid parental leave payments, you can make the change in myIR.
Using the right tax codes will help you avoid a tax bill at the end of the year.
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