How much overtime is too much ?

Question

My base pay is $15.50 an hour. I am single, no dependents. My last pay was $1041.25 before taxes they took out $261.99 in taxes. Net pay of $779.26. I normally if I work 40 hours get $491.13. Do I made $288.13 extra 55.50 hours in a week. Maybe to some people $288.13 is not that much but to me it is a lot. Is it worth working 70 or 80 hours a week occasionally.

Update:

I just don't want to go into the next tax bracket or work so much they take do much tax not worth it.

cynic47 · Answer

From a tax viewpoint, there is no such thing as "too much overtime."  Any time you make more money, you get to keep the majority of it.  If overtime pushes you from the 12% tax bracket into the 22% tax bracket (2021 annual income above $53,025 for a single person taking the standard deduction), you do NOT are not taxed at the 22% rate on ALL your income, only 22% on the amount over $53,025. Taxes should not affect your decision, only whether or not you have the energy and need the money.

A Hunch · Answer

Of course you want to go to the next tax bracket!!
The US has a PROGRESSIVE tax system.  You pay increased taxes only in the increased income.  And you are FAR FAR FAR away from making so much money that working doesn't "pay" because of the high tax rate.

POOR people don't pay taxes.  Be glad you aren't one of them!!!!

If you change your W4 to the 2020 version, you will get $520 per week instead of $491.  However, this will reduce your tax refund.  To me this is better = you have the money in your pocket each week, instead of uncle sam holding it.  But it's your choice.

You worked a little over 18 hours (not 15.5 hours) to get the additional $421 in income.

Does your employer allow you to work unlimited OT? 
I doubt they would let you work 70 or 80 unless there is a special project going on.  At 60 hours a week you get double OT instead of time & a-half, so it's cheaper to hired another employee instead of pay you.

Max Hoopla · Answer

You will pay Social Security and Medicare taxes on all your wages.  You will get this back when you retire.  Income tax at your level are not significant.

Anonymous · Answer

You would need to make about 20k more than you are now to be near the next tax bracket.    And even if that were the case, you'd only pay the extra tax on the amount over that 20k.

Tax brackets are a non-issue for you at $15.50/hour.

Have you filed a new W-4 with your employer since the tax changes a couple years ago?   If not, you might consider that.   It's likely your paychecks would be larger (but you'd get a smaller refund).

How much overtime is too much ?

4 Answers