How exactly does the Overtime allowance work in Guyana payrolls?
The Overtime Allowance is a tax-free benefit for employees who work beyond their normal working hours. It allows up to GYD 50,000 per month of overtime income to be exempt from PAYE, reducing the overall Income Tax payable.
The annual allowance in 2025 is GYD 600,000. The exemption cannot exceed GYD 50,000 per month and is prorated based on the employee’s overtime earnings. If monthly overtime earnings are less than GYD 50,000, the allowance is limited to the overtime actually earned.
Employees are eligible for the Overtime Allowance if they work additional hours beyond their regular scheduled working hours. This allowance applies only to income earned from overtime work and does not include the employee’s regular salary.
The tax-free overtime wages are not included in the base wages from which the Personal Allowance is calculated. Only taxed overtime wages increase this base wage for Personal Allowance.
The Overtime allowance is applied automatically in Celery. If you do not want to apply this allowance, you must manually disable this allowance (in Employees/Choose Employee/Taxes and Premiums/Overtime allowance).