Personal tax credit, tax brackets and changes in employment

When taking parental leave, there is a risk of exceeding the personal tax credit limit – especially in months when payments are made partly by the employer and partly by the Parental Leave Fund.

Before parental leave

Parents must:

• inform the Parental Leave Fund of when the personal tax credit may start to be used

• inform their employer to stop using the personal tax credit

After parental leave

Parents must:

• inform the Parental Leave Fund to stop using the personal tax credit

• inform their employer of when the personal tax credit can be used again

• ensure that the employer does not assume accumulated personal tax credit for the period during parental leave

If parents return to work part-time and receive payments partly from the Parental Leave Fund and partly from their employer, it is important to ensure that tax is calculated in the correct tax bracket and that the personal tax credit is not used in both places.

See further information on exceeding the personal tax credit limit.