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Under Alabama Act 2024-437, overtime compensation received between January 1, 2024, and June 30, 2025, is excluded from gross income and is, therefore, exempt from Alabama state income tax. To support this legislation, the Alabama Overtime earning code was introduced in UKG Ready®. As the exemption period is set to expire on June 30, this earning code will be discontinued. We have identified that your organization has the Alabama Overtime earning code in your UKG Ready solution.
Action required! To ensure compliance and prevent any payroll discrepancies, clients currently using the Alabama Overtime earning code must take the following steps before June 30:
- Navigate to Payroll Setup > Earnings Codes > Alabama Overtime
- Select Inactivate Earning
- Choose End Scheduled Earnings As Of Date and set the date to on or before 06/30/2025
For customers who utilize the UKG Ready Time and Labor module, additional configuration may be required. Please review the article Reverting Alabama Overtime Exemption Settings for help with the additional configuration needs by June 30. If you require further assistance, please open a case in the UKG Community™.
*If you’re not logged in to the UKG Community, you’ll be asked to enter your credentials when accessing the link(s).
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