FOP goes on maternity leave

For most working women, going on maternity leave is a fairly straightforward process: bring your sick leave to work and see you in three years. However, if you are an entrepreneur and want to take maternity leave, the situation becomes more complicated. In this article, we will try to answer all the questions you may have in the process of applying for maternity leave.

Where to start?

The entire process of applying for maternity leave for a sole proprietor begins in the same way as for an employee - with obtaining a sick leave. At the 30th week of pregnancy, the doctor you are seeing must issue you a sick leave certificate, which entitles you to take 126 (or 140 in case of complications) calendar days of leave and is the main document for calculating your benefits.

I got a sick leave, what's next?

As you know, individual entrepreneurs are required to pay the unified social tax for themselves. And in this situation, the state does not make exceptions, even if you are going on maternity leave. Therefore, the first thing you will need to do is to close all debts on the payment of the unified social contribution (if any). You can check whether you have any debts in your personal electronic taxpayer account.

When you submit an application to the Social Insurance Fund, you will need a certificate of no unified social tax arrears. You can order it from the tax office. You will also need copies of payment orders for the unified social tax for the last 12 months.

If you have debts on other mandatory payments, you will also need to pay them off and make sure that there are no penalties or fines.

I've paid my taxes, I have no debts, so what's next?

Before you can calculate the amount of maternity benefits and apply to the Social Insurance for money, you need to open a special bank account. This procedure usually takes no more than five minutes. You need a social security account that starts with 2604.

How to calculate the amount of maternity benefits?

To calculate maternity benefits, the amount from which the unified social tax was paid is required:

1. For a sole proprietor on the simplified taxation system, this is most likely the amount of the minimum wage. If you paid the unified social tax on a larger amount, you need to take it into account.
2. For a sole proprietor on the general taxation system, this is the amount of net income or the minimum wage.
3. If you had no income, you still calculate from the minimum wage.

The higher the amount of unified social tax you paid, the higher the amount of maternity benefits.

Now let's calculate the payout amount.

The formula for calculating maternity pay

Amount of maternity pay = Average daily salary * Number of days of maternity leave

                      Income for 12 months before the insured event
Average daily salary= ---------------------------------------------------------------------------
                     Number of calendar days in the settlement period

There is also an important point to remember. Before applying for maternity pay, you need to check the minimum and maximum limits on the average salary for 1 calendar day. In 2020, the minimum amount is UAH 155.16, and the maximum is UAH 2031.70.
Example: Individual entrepreneur A.I. Ivanova goes on maternity leave from January 22, 2020 to May 26, 2020. In 2019, she paid the USC for herself from the minimum wage (UAH 4173). We take the following months for calculation: January 2019 - December 2019.

The average daily salary for 2019 was UAH 137.09. Since in 2020 the minimum limit on the average salary per day is UAH 155.16, we use this amount for the calculation.

Amount of maternity benefits = 155.16 * 126 (number of days of maternity leave) = 19550.16 UAH

If the sole proprietorship was registered less than a year ago and the unified social tax was paid from the minimum wage, then to calculate the amount of maternity pay in 2020, you need to take the minimum average daily wage of UAH 155.16.

If you pay the unified social tax on a larger amount than the minimum wage, you should use that amount for the calculation.

The amount of maternity benefits has been calculated, what's next?

The next, but not the last step is to submit an Application-Calculation to the local branch of the Social Insurance Fund.

Along with the Application-Calculation, you need to collect and submit a package of documents:

• A copy of the sick leave.
• Receipts for the payment of unified social tax for the previous year, including the last month before the start of maternity leave.
• A certificate from the tax office confirming the absence of unified social tax arrears.
• Bank statement on opening an account 2604

After submitting the documents, the money should be transferred to a special account within 10 days (although in practice, this can take more than a month).

The last step is to submit a Notice of Payment to the Insured Person to the Social Insurance Fund. It must be submitted within a month from the date of receipt of funds from the Fund.

Do I have to pay taxes on maternity pay received by individual entrepreneurs?

No, you don't. An entrepreneur who goes on maternity leave and receives maternity benefits does not have to pay any taxes on the money she receives: no personal income tax, no military duty, no unified social tax.

But do not be confused! You still need to pay the unified social contribution for yourself during maternity leave!