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How do I exempt an employee from the Overtime Concession Tax?
How do I exempt an employee from the Overtime Concession Tax?

You can opt out an employee from the overtime concession in the employee profile page

Marie Claire Saliba avatar
Written by Marie Claire Saliba
Updated over a week ago

The Overtime concession opt-out button is found in the Employee Details section of an employee’s profile.

Exempting an employee from the Overtime Concession Tax change

  1. In Indigo, go to HR > Main > Employees.

  2. Double-click on the employee for whom you want to exempt from the overtime concession tax.

  3. Click on Edit in the functions bar.

  4. In the Employment Details section, click on the Overtime Concession Opt Out box.

  5. Click on Save in the functions bar.

By default, all active employees in your system are opted-in.

The 15 percent tax rate is already updated to overtime pay items in your system.

Particular Scenarios

  1. Calculations cater for situations where employees are exempted from the OT concession tax mid-year. For employees who are opted out of the OT concession tax, their tax paid to date is equivalent of their FSS tax + OT tax.

  2. When re-calculating payrolls, the system will appropriately calculate employees' taxes and gross pay according to the OT tax concession and employment type statuses set historically during the given pay period.

  3. The sum of all taxes (OT + share options + FSS + other) is capped at 50 percent of the employee's gross pay value. In cases where the sum of taxes does exceed the 50 percent sum, the FSS tax is adjusted or reduced to fall within the limit.

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