May 2018 Q2 b.

• Where an employer makes a payment for overtime work to a qualifying junior employee during a year of assessment, the employer shall:
• Withhold tax from the total of the payment at the rate of five percent, if the amount paid does not exceed fifty percent of the basic salary of the employee for the month.
• Withhold tax from the excess of that payment at the rate of ten percent, if the amount paid exceeds fifty percent of the basic salary of the employee for that month.
• Where an employer makes a payment for overtime to an employee who is not a qualifying junior employee, the payment shall be included in calculating the income of that employee from the employment and taxed in accordance with the First Schedule of the Act (i.e. using the graduated rates).
• Tax withheld is a final tax on the overtime and the payment shall not be included in calculating income derived by the employee from that employment; and the tax paid by withholding satisfies the tax liability of the employee with respect to the payment and may not be reduced by any tax credits allowed to the employee.
  

• Where an employer pays a bonus to an employee during a year of assessment, the employer shall:
• If the total of the bonus payments made by that employer to the employee during the year of assessment does not exceed fifteen percent of the annual basic salary of that employee, withhold tax from the gross amount of the payment at the rate of five percent; or
• If the total bonus payments made by the employer to the employee during the year exceeds fifteen percent of the annual basic salary of that employee.
• Add the excess payments to the employment income of that employee for that year; and
• Withhold tax from the total amount obtained in accordance with the First Schedule of the Act (i.e. using the graduated rates).
• Tax withheld is a final tax on the bonus payment and the payment shall not be included in calculating income derived by the employee from that employment; and the tax paid by withholding satisfies the tax liability of the employee with respect to the payment and may not be reduced by any tax credits allowed to the employee.
  

Where a person makes payment to a casual worker, which payments shall be treated as income earned by that casual worker, and the person shall withhold tax from the gross income paid to the casual worker at the rate of five percent. Tax withheld shall be treated as final tax.

Where a person makes payment to a temporary worker as defined under section 78 of the Labour Act, 2003 (Act 651) that payment shall be treated as income earned by the temporary worker, and the person shall withhold tax from that income in accordance with section 114 of the Income Tax Act, 2015 (Act 896) as amended and the First Schedule of the Act (i.e. using the graduated rates).