Through the publication of Legal Notices 245 and 246 of 16 June 2020, Tax on Overtime Rules and amendments to the FSS Rules were enacted. Legal Notice 68 of 2022 updated these rules.
Employees falling in the below criteria are eligible for the Overtime concession tax scheme:
- Are employed on a full-time basis
- Do not occupy a managerial role
- Earn a basic weekly wage of no more than €375 (per week), excluding Government Bonuses
- Go to the employee's employment tab, edit the latest position and go to 'Other payroll information'. Here you will see 'Use Overtime concession'. This is ticked by default:
- In payroll, add the number of hours of overtime, and the relevant amount will show in the calculation.
- The Overtime concession is applicable on overtime which is between the rate of 100% to 200%. Anything above or below this rate is not subject to the concession
- Up to a max of €10,000 worth of overtime will be considered as the Overtime Concession Amount and taxed at 15%
- If data is added to the income from current employment section in the Employee Details, this data will also be used for the Overtime Concession Calculation. Please refer to the below section for more information.
- The Overtime Concession Amount and the Overtime Concession Tax will show separately on the payslip calculation and also on the payslip sent to the employee
Current employer income
If you started using Talexio mid-year and will not be generating all payrolls (from January onwards), using Talexio, you may upload income earned by employees, in bulk. This information will be stored in Employees > Details > Income from this company prior to use of Talexio.
Any information added here will be used for future payrolls calculated on Talexio and will feature on FS documents. This includes:
- Gross emoluments from full time or part time
- Tax projections for the year
- Overtime Concession Amount and Tax
- Social security weekly wages and Maternity Leave Fund
- Fringe Benefits
FS3, FS5 and FS7 documents have been updated as a result of this change. To re-issue any of these documents for past payrolls, simply re-generate the document.