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tommyw-5088

do they tax overtime pay at higher rate?

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we are getting lots of overtime at work the past couple of months ,but it seems if i do over 60 hours ,im working for almost nothing?? at 80 hours it seems like it is not worth the diffrence.

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Tommy-

Regardless of what they're taxing, at the end of the year, you'll still be paying taxable income based on the schedule in the Internal Revenue code. You're probably ultimately paying federal taxes of about 20-25% on that money, plus 7.62% for SS and medicare, plus state and local. What i mean by that, is that even if they hold back a lot more than what you'd pay in taxes if you had to figure them up, you'll just get back money at the end of the year (or pay in less) instead of getting it right now.

It just seems more punitive because you pay a higher effective rate per dollar as you make your way up through the income tax tiers, but you're ultimately still probably getting at least 60 cents on each dollar in wages.

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I forgot one thing - government is always going to get their piece, whether or not they earned it. Sure does suck. Guy who sits behind me and myself always joke that we have to figure out a way to start a level of government below local so that we can start collecting taxes.

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Tommy. I do believe that once you get up into the $500,000 a year bracket the govt takes about 90% :angry::(:lol:

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They do not tax overtime at a higher rate. You are taxed more because when you work overtime you earn more in that pay period and are taxed at a higher rate (as if you made that much a week all year round). If you make $60,000 a year and you make it in one week or in 52 weeks you will end up paying the same amount of tax at tax time. It all evens out at the end of the year. Look forward to a big refund.

Mike

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we are getting lots of overtime at work the past couple of months ,but it seems if i do over 60 hours ,im working for almost nothing?? at 80 hours it seems like it is not worth the diffrence.

Heck yes they tax you more. It puts you into higher tax brackets. I hate working more than sixty hours a week, because like you say, you don't see all that much on your check.

In 1996 I worked 7- 12 hour days, Labor Day was in that seven days. We get double time for anything over 8 hours a day and triple time for 8 hours if we work on a holiday, the other 4 hours go back to double time. That figures out to getting paid for 136 hours in a week. Uncle Sam took 50 percent of the gross for that week. I have never earned that many hours before or since that week, that was my all time record. My take home for that holiday in the work week week was actually less than the 7 - 12 hour days with no holiday in the week. :angry:

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There is overtime available at my job until H_ll won't have it, but I won't work more than 55 to 60 hours a week, because after that, I don't see any benefit in my take home pay. It's like you've worked for nothing after that due to the taxes.

Rick.

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