How much is too much?

[Redfred1]

My daughter came up with a question? She works for a company that offers as much OT as needed. (As long as it gets done) It isn't hard work; answering phone; set up appointments; posting; waiting on customers buying parts;etc. She might work 60+ hours a week. Her question is " how many hours do you have to work and start losing money?" In other words you are paying more in taxes than you are bringing home. She called it 60-40. Seems like it was 47.5 hours when I was working. Anybody got a clue?

 

[Sprig]

It would be at the point where everything withheld exceeded 50% of her gross income. So you would have to look at federal income taxes, state income taxes and social security, Medicare and any other taxes and withholdings she is subject too. It would be different for everyone depending on what they earn. For example if she earns $10 an hour and $15 in ot she may never reach the point. If she earns $50 an hour and $75 ot she may reach that point quickly. Can't answer the question without a lot more information.

 

[GA_Boater]

It can't happen. The only way you can bring home less is if the combined deductions for overtime hours are more than 100%, in which case you pay the company to work.

When I put in the occasional 100 hour weeks, I was beat to a pulp, but the check was real nice and a heck of a lot more than a 40 hour check, even when the deductions added up to more than a 40 hour check. At the end of the year my tax refund was a healthy chunk of change.

This is moving to Dockside.

 

[G_Hipster]

The only time I ever saw an issue was if the hours barely bumped you into the next tax bracket. I don't know where the breaks anymore are but to give an example work 60 make xx and work 62 and take home less. When i worked flat rate commission doing auto body I knew the point and would roll the hours forward and use them on a slow week or when I needed a day off etc. I worked for a small co that would do that.

 

[Paddichuck]

GA_Boater is right. It doesn't work like that and can't happen. You can't work so much that you lose money. You might get a lower proportionate amount of some of those additional hours as you work more because of graduated tax rates (brackets). e.g. If you're taxed 10% on the first $100 and 20% on the next $100 and you make $120 then you pay (10%x$100 + 20%x$20) = $14 in tax for a combined marginal rate of (14/120) ~ 11.7%.

At least in Canada your employer will deduct source deductions for the period based on what it seems you're going to earn for the year if you extrapolate the earnings from that period out for the year. So you might get a bunch of tax deducted, but at the end of the year, if you haven't worked those 100 hr weeks each period, you'll have over-remitted and will get a big refund.

 

[tpenfield]

It is just smoke and mirrors . . . you don't actually loose money, it is just diminishing returns. All depends on how much you make per hour, tax brackets, deductions, etc.

If you are a salaried employee, you don't have to worry about such things. . . you can work as much as you want and you get the same pay regardless.

 

[Redfred1]

Thanks for the replies! I can give more info. It's a small company; two employees; two phones lines constantly ringing. All phone calls are recorded; have cameras with sound everywhere; She makes $13.50 per hour; with no benefits. Her boss might or might not show up at work; (can turn on his home computerand hear and see everything.)

 

[Redfred1]

;;;

 

[Scott Danforth]

pay aside. people start to be unproductive after 50-60 hours per week.

 

[tpenfield]

Of course, now if you end up working too much in one week, instead of getting a paycheck, you actually owe the employer money . . . So be careful

 

[alldodge]

A bit off topic but I would suggest to start putting more money in a 401K, this way its doesn't impact the gross and will make a big difference in the future

 

[southkogs]

If you are a salaried employee, you don't have to worry about such things. . . you can work as much as you want and you get the same pay regardless.

ound:

Also, make sure you calculate things on an annual basis. Your income tax return is where you square up with the Feds on what they get and what you get. Your tax bracket isn't a weekly thing, it's an annual thing. So a few weeks of overtime might bump you up on a given week, but for the year you may not see much difference.

 

[Redfred1]

Your're right Scott! I can remember working 6 -12 hr. days; come back to work Monday; and they wanted to know "What about yesterday?"

 

[redneck joe]

this is how ones gets ahead when young. Work your a.. off, learn and later in life you get a 'real' job. Or work 2-3 jobs.

bottom line - if the work and money is there, take it.

 

[Redfred1]

Is this when the expression "I'm living on my children's inheritance" comes into play?

 

[levittownnick]

It is like saying don't give me a raise because I can't afford the taxes. Think about it. Bill Gates would have to work for nothing. It just don't happen. The more you make the more you keep, period. Why would the boss or owner want to make more than you if he was going to get less to keep. Taxes on not on the hours you work, they are on the money you make regardless of your job title or hours worked. If you work 1 hour in a year and get $20,000.or work 1600 hours in a year and get 20,000 the tax you pay would be the same.
Nick

 

[Redfred1]

Then you are a "Salaried"" employee. You get a set amount;no matter how many hours management wants to work you; being paid hourly your salary changes. Myself; I stayed paid hourly; they hated it! I would work 14-18 hours a day; six day a week; more travel time than work. Made good money; but it got old.

Anyway; it was her question! I remembered it; would I do it again? Probably. Thanks for your thoughts.

 

[levittownnick]

No, being a salaried or hourly employee has nothing to do with it. Think about this: People make all kinds of sacrifices to earn more money and they are not doing it for nothing. They go to school which cost tens of thousands of dollars so that among other things they can earn a larger income. If earning more would net them less money they certainly would not want a bigger salary. Did you ever prepare your own taxes? If you have, you would see that the hours worked does not enter the equation. The bottom line is that the more you earn, the more you keep.

 

[bruceb58]

It's scary to think that people still think you can make enough money to put you into another tax bracket and lose money. Besides, it has nothing to do with week to week anyway. It may change the withholding from that pay period but it all gets reconciled when you do your taxes at the end of the year.

For a single person:
First $18,550 gets taxed at 10%
Every dollar earned between 18,551 and —$75,300 gets taxed at 15%.
...and so on as you go up the brackets.

We really need to have a required class in high school that teaches basic economics.

 

[sam60]

If you can't count on bruceb58 for an opinion, than no opinion is needed. I appreciate his advice. Not a Bromance.,he just has never lead my astray.