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  • Over Time Tax Ohio

    With each of my pays, and different amounts of OT, taxes withheld vary greatly. I never know how much I can expect to be paid as the amount of hours changes from pay to pay. Does anyone know how OT tax (Federal, State, Local) is calculated? I do not get 1.5 OT, only straight OT… Thanks!

  • #2
    As your pay goes up, so will the taxes.

    If taxes on $100 are $15, the taxes on $200 will be at least $30, but maybe more.

    Don't worry. Your tax liability at the end of the year will be based upon your total earnings for the year. If you overpaid, you will get a refund. If you underpaid, you will owe taxes and may owe a penalty for underpayment.
    Senior Professional in Human Resources and Certified Staffing Professional with over 30 years experience. Any advice provided is based upon experience and education, but does not constitute legal advice.

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    • #3
      Thank you for your input. I understand I will be taxed more if I make more money… However, the amounts vary too greatly from pay to pay, and I never know what to expect. Not to mention that the Federal tax withheld more than doubled when I put in 18 hours of OT for one week (seems a bit high). I am currently on a budget and no longer have the luxury of waiting until the end of the year to find out how much I'm getting back, nor do I want to wait to get MY money when I need it to pay bills now. At the present I feel I am being taxed too high for the OT I put in.

      I am looking for a link that will give me the formula, or for the formula itself from someone who knows how OT tax is calculated. Seems that in regard to OT tax brackets don't mean much.

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      • #4
        The problem with the payroll programming that determines the deductions that it doesnt look week to week to see what you have paid or will pay.

        If you are paid bi-weekly at $6 an hour and have a paycheck of $480, the sytem looks at $480 times 26 pay periods ($12, 480) and determines that you would be in a specific tax bracket for that anticipated total years salary.

        Now if you got your usual salary of 480 plus you had 12 hours of overtime (at $9/hr), you'd have a total paycheck of $588. The system doesnt recognize OT as anything different for taxes, it just looks at the total dollar figure. Therefore, it looks at $588 times 26 pay periods, and sees an anticipated yearly salary of $15, 288. I dont know where the cut offs are for tax brackets and I'm just using numbers here, but the higher figure may knock you into a new tax bracket, so the percentage of tax deducted would be higher.

        Its virtually impossible to figure out tax from paycheck to paycheck. You can look at
        http://www.irs.gov/individuals/artic...=96196,00.html
        which may help you determine your tax liability.
        I find that the harder I work, the more luck I seem to have.
        Thomas Jefferson

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        • #5
          Thank you Morgana. I suspected that excessive OT may bump me into the next tax bracket for that given pay period (although I have a long way before I even get close to the mid-range of my current tax bracket). I tested the theory and numbers did not add up.

          I guess OT tax is a great mystery too all… I have searched high and low and found no literature on the topic except at ADP's website. Is it not logical to think there must be a straight forward formula since payroll people (or the programs they use) figure it out? It can't be as complicated as it seems...

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