15% tax on qualifying overtime income

By means of Legal Notice 68 of 2022, the Government of Malta has amended the Tax on Overtime Rules which were originally published by means of Legal Notice 245 of 2020. The rules provide for a reduced rate of tax of 15% on qualifying overtime income where the maximum number of hours which could be […]

Written By Stephen Balzan

On February 9, 2022
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By means of Legal Notice 68 of 2022, the Government of Malta has amended the Tax on Overtime Rules which were originally published by means of Legal Notice 245 of 2020.

The rules provide for a reduced rate of tax of 15% on qualifying overtime income where the maximum number of hours which could be subject to the reduced rate was limited to 100 p.a. while the rate per hour at which remuneration was paid for overtime work could not exceed twice the hourly equivalent of the basic weekly wage.

The amendments provide that with effect from year of assessment 2023, the 15% tax rate shall only be applicable to qualifying overtime income up to an amount not exceeding (a) Eur10,000 p.a. and (b) the amount resulting when the actual number of hours of qualifying overtime in respect of which the employee has derived qualifying overtime income is multiplied by the maximum hourly rate as defined above.

How can we help?  

For further information, please contact one of the firm’s tax partners, Stephen Balzan on [email protected] or Elaine Camilleri [email protected]. ACT can help you understand the changes to the tax rules and how these can impact your business.  

Apart from its offices in St. Julian’s Malta, ACT operates from a second office in Gozo, which is situated in the capital city of Victoria.  For an appointment in our Gozo office, please call on +356 21378672 or send us an email on [email protected].