Recent reports have highlighted the potential challenges skin pigmentation can have in the accurate estimation of arterial oxygen saturation when using a pulse oximeter. Pulse oximeters work on the principle of photoplethysmography (PPG), an optical technique used for the assessment of volumetric changes in vascular tissue. The primary aim of this research is to investigate the effect of melanin on tissue when utilising the technique of PPG. To address this, a Monte Carlo (MC) light-tissue interaction model is presented to explore the behaviour of melanin in the visible range in the epidermis. A key novelty in this paper is the ability to model the Modified Beer Lambert Law (MBLL) through a fully functional three-dimensional (3D) model in reflective optical geometry. Maximum photon penetration depth was achieved by red light, however limited bio-optical information was retrieved by moderately and darkly pigmented skin at source-detector separations of less than 3 mm. The current MC model can be modified to provide a more realistic representation of absorption and scattering processes in skin.