Tax on Overtime Rules published
Further to the introduction of article 90B of the Income Tax Act with the Budget Measures Implementation Act, which provides for a 15% tax rate on qualifying overtime income with effect from 1 January 2020, LN 245 of 2020 sets out the rules governing the application of this reduced rate.
In summary, the 15% rate applies to qualifying overtime income up to an amount not exceeding an amount derived by multiplying the number of qualifying overtime hours (up to 100 hours) by the rate per hour at which the overtime is paid (but not exceeding twice the hourly equivalent of the basic weekly wage). The hourly equivalent of the basic weekly wages to be calculated by dividing the basic weekly wage by 40.
Qualifying overtime is that performed by a full-time employee who does not occupy a managerial post and whose basic weekly wage for that employment does not exceed €375 per week.
According to the rules, an individual may elect to have his overtime income excluded from the scope of article 90B of the Income Tax Act.