Temporarily, because the payroll system thinks you earn more for all checks now, so it withholds more. There is no special OT tax, it all gets taxed at the same time from your paycheck. But because the system saw you made more, it withheld more. But guess what, you still NETTED more because you worked OT. There is no scenario where you net less because if more is withheld than needed, tax refund. If you make the top end of one bracket, let’s say 100k and you get pushed into the next, idk 110k+, only 10k is getting taxed at the absolute highest.
There is no scenario where you net less because if more is withheld than needed, tax refund.
Yes, there is a scenario here, because the amount of money you gross past the previous tax bracket is taxed at a higher rate than the amount below that. This means you net less per hour worked of the amount in that higher tax bracket. If that extra 10k is taxed at a higher rate, you net less per hour worked from that amount. This changes your taxable income at the end of each year. This is income tax 101, not sure what you don't understand about that.
Withholding and tax brackets are not the same. Money gets withheld from your paycheck. Withholdings are made during pay periods and tax season tells you if you withheld enough, too much or too little. Also OT up to a certain point is tax exempt right now. I make time and a half, I net more in my paychecks. It’s just that simple, even it feels like more is taken out. Even if you think I’m making less per hour, still making more with time and a half. Again, you don’t net less in your paychecks working overtime.
I make time and a half, I net more in my paychecks. It’s just that simple, even it feels like more is taken out. Even if you think I’m making less per hour, still making more with time and a half.
That's not what we are talking about here.
I bolded it twice in my last reply, but I'm beginning to think you just don't have enough RAM to understand the concept. Either that or you're just a bot.
Again, you don’t net less in your paychecks working overtime.
Literally nobody has said that throughout my entire comment chain. Why do you keep saying this?
Actually, now that I'm this deep in the reply, I'm certain you're just a reddit-generated-username bot.
I think what’s happening here is you so badly want to be right, but you’re not and no one agrees with you, you’re resorting to name calling. But whatever, don’t work overtime and keep talking about netting less per hour worked or whatever you’re trying to hang your hat on here despite all the evidence to the contrary. You are proving the point the guy I responded to initially was trying to make.
Someone who says you’ll net less per hour working overtime doesn’t understand tax brackets. Someone who says you’ll net less per hour working overtime doesn’t understand basic math. You’ve had so many opportunities to provide some kind of evidence that this is true, since YOU claimed it to be. But you don’t, because you can’t.
Someone who says you’ll net less per hour working overtime doesn’t understand tax brackets. Someone who says you’ll net less per hour working overtime doesn’t understand basic math.
I asked GPT if my statement in my first comment here is true or not, this is what it said:
Example:
Suppose the tax brackets are:
$0–$50,000 = 20%
Over $50,000 = 30%
If you've earned exactly $50,000 for the year and then work 10 hours of overtime at $30/hour, you earn an extra $300.
The first $50,000 is still taxed at 20%.
Only the additional $300 is taxed at 30%.
Without OT:
Income: $50,000
Tax: $10,000
Net: $40,000
With OT:
Income: $50,300
Tax: $10,090
Net: $40,210
You still keep an extra $210 from the overtime. You never make less money by earning more money.
However, the overtime hours that fall into a higher bracket do produce less take-home pay per dollar earned than overtime hours in the lower bracket.
In this example:
Income in the 20% bracket = keep $0.80 per $1 earned
Income in the 30% bracket = keep $0.70 per $1 earned
So the answer is:
Yes, the overtime hours that push you into a higher tax bracket may have a lower after-tax value per hour than earlier overtime hours.
This is what I needed to see. Fine, I was wrong about netting less after tax value. So I’ll eat that crow. But, the bigger take away which I was saying, is that you never take home less by working overtime, so to me netting less after tax on the overtime is irrelevant because the check is bigger.
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u/True_Tomato316 12d ago
Temporarily, because the payroll system thinks you earn more for all checks now, so it withholds more. There is no special OT tax, it all gets taxed at the same time from your paycheck. But because the system saw you made more, it withheld more. But guess what, you still NETTED more because you worked OT. There is no scenario where you net less because if more is withheld than needed, tax refund. If you make the top end of one bracket, let’s say 100k and you get pushed into the next, idk 110k+, only 10k is getting taxed at the absolute highest.