Tax on Overtime Rules, 2020

L.N. 245 of 2020

INCOME TAX ACT

(CAP. 123)

Tax on Overtime Rules, 2020

IN EXERCISE of the powers conferred by articles 90B and 96 of

the Income Tax Act, the Minister for Finance and Financial Services

has made the following rules:-

The title of these rules is the Tax on Overtime Rules, 2020.

Citation.

In these rules, unless the context otherwise requires

Interpretation.

"the Act" means the Income Tax Act;

"basic weekly wage" means the basic weekly wage or the weekly

equivalent of the basic monthly salary as determined for the purpose of

calculating the rate of class one contributions payable by an employed

person in terms of the Tenth Schedule to the Social Security Act;

"full-time employment" means a full-time employment registered

as such with Jobsplus established under the Employment and Training Cap. 594.

Services Act;

"managerial post" means a post of employment of a person who

is a director of the company or a partner of the partnership with which

he is employed or who is an officer with managerial functions;

"overtime" means hours of work performed by an individual in

the course of a full time employment in excess of his normally

scheduled working hours and for which he is entitled to remuneration

over and above his basic weekly wage;

"qualifying overtime" means overtime performed in the course of

a full time employment during a period while -

(a) the rate of basic weekly wage for that employment

does not exceed three hundred and seventy-five euro (€375) per

week; and

(b) the post in which that individual is engaged in terms

of the said full time employment is not a managerial post;

"qualifying overtime income" means income derived on or

after 1 January 2020 as remuneration for the performance of

qualifying overtime but subject to the limitations provided for in

rule 3.

The provisions of article 90B of the Act shall apply to

qualifying overtime income derived by an individual in the year

immediately preceding the year of assessment up to an amount not

exceeding -

maxhours x maxrate

where:-

maxhours is the number of hours of qualifying overtime in

respect of which the individual has derived qualifying overtime

income in the year immediately preceding that year of assessment but

not exceeding one hundred (100); and

maxrate is the rate per hour at which remuneration is paid to that

individual for overtime performed by him but not exceeding twice the

hourly equivalent of the basic weekly wage: and for this purpose, the

hourly equivalent of the basic weekly wage shall be calculated by

dividing the basic weekly wage paid to that individual for the period

during which the qualifying overtime in question is performed by forty

(40).

(1) Notwithstanding rule 3, an individual may elect to

have his overtime income excluded from the scope of article 90B of

the Act.

(2) An election referred to in sub-rule (1) shall be made in

accordance with the provisions of the Final Settlement System Rules

(FSS).

In the case of a married couple, article 90B of the Act and

these rules shall be applied separately to the income derived from

overtime performed by each of the spouses.

€0.18