Accrual of Statutory Annual Leave when absent on Certified Sick Leave

The Organisation of Working Time Act 1997 has been amended since August 1st 2015, to provide that any day of absence on certified sick leave is considered to be classified as time spent working for the purpose of accruing statutory annual leave.

The amendment brings employees in the private sector in line with public sector employees who already accrue annual leave while absent on certified sick leave. This change primarily affects those employees who are absent on long term sick leave, as an employee who works 1,365 hours in a leave year is automatically entitled to his statutory entitlement of 4 working weeks.

Generally, annual leave must be granted within the leave year to which it relates, or it can carried over and taken within 6 months of the following leave year, with the consent of the employee.

However, since 1st August 2015, the carry over period has been extended from 6 months to 15 months if an employee is unable to avail of his annual leave during the leave year or the normal 6 month carry over period due to illness. If an employee does not get the opportunity to take the annual leave within 15 months following the end of the leave year in which it was accrued, they will subsequently lose that entitlement as the maximum carry over period is 15 months.

Where a cessation of employment occurs within 15 months following the end of a leave year, and an employee could not avail of his statutory annual leave due to certified illness, that employee must be paid in lieu of any statutory annual leave accrued in that leave year and up to a maximum of 15 months after the end of that leave year.

For example, if an employer’s annual leave year runs from January to December. An employee is absent due to long term certified sick leave from January 2016 until he ceases his employment in February 2018. As employment ceases within 15 months following the end of the 2016 leave year, the employee must be paid in lieu of his statutory annual leave which accrued from January 2016 to his leave date of February 2018.

If the employment ceased in April 2018, the employee would be entitled to be compensated in respect of his statutory annual leave accruing from January 2017 up to April 2018, but he would lose his entitlement to the annual leave which accrued in 2016.

Contact Tailored Payroll for all your payroll needs on 0419883524 or Request a callback from a qualified Payroll Team member today

Are you prepared for a Revenue Audit?

A Revenue audit covers income tax, corporation tax, and returns submitted in respect of PAYE/PRSI, VAT or Relevant Contracts Tax. Every employer needs to keep a full and accurate record of business transactions for a period of 6 years. As a customer of Tailored Payroll we will guide you through a PAYE Revenue audit should you be selected. We ensure your payroll is processed in compliance with Revenue requirements in line with the latest legislation changes.

There are three methods of selection for audits which include:

  • Screening Tax Returns –Revenue examine the returns and review tax compliance history.
  • Projects on different business sectors – Projects are conducted to examine tax compliance levels.
  • Random selection – means that all tax payers have a possibility of being audited.

Once you have been selected for an audit

  • The auditor will explain the purpose of the audit and give an indication of the length of time it will take to complete
  • You will be given the opportunity to disclose any inaccuracies in your tax return
  • An inspection of your records will be undertaken to confirm if figures have been correctly filed and the tax declarations are exact
  • If it is found that the majority of returns are correct you will be notified
  • If adjustments are required, this will be discussed verbally with you and you will be notified in writing.
  • The auditor will ask for your agreement to the total settlement figure before finalizing the audit.
  • Once agreed, the full amount should be paid to the auditor and you will be issued with a receipt

Contact Tailored Payroll today for a competitive price. Our flexible outsource payroll service includes:

  • PAYE,PRSI and USC Calculations
  • Registration of Employer with Revenue
  • All employer  Revenue submissions to include: P30’s,P45’s, P35, P60’s and registration of
  • new employees
  • We provide email Payslips and  P60s to employees
  • Creation of Bank file for payment to employees
  • No hidden costs


Visit our Website:

Outsource your Payroll

Outsource your payroll today! By outsourcing your payroll to Tailored Payroll, you will save time and money and reduce stress. You no longer have to worry about holiday or sick leave cover, training or software updates as Tailored Payroll will calculate and process your payroll on-time every time, ensuring accuracy and compliance with Revenue.

Payroll Service Provided:

We will process your payroll in line with Irish employment tax requirements:

  • Processing PAYE (Pay As You Earn), PRSI (Pay Related Social Insurance), USC (Universal Social Charges) and LPT (Local Property Tax)
  • Email payslips and standard payroll reports each pay period
  • Preparation and submission, on your behalf, of monthly and annual Revenue Returns to include P30’S & P35 with a copy of the returns forwarded to you.
  • As your agent for Revenue we will register any new starters and process P45’s when due.
  • P60’s emailed directly to the employee with a copy for your records