Is working overtime worth it the pros and cons

By Sarah R
Modified on April 24, 2023
Is Working Overtime Worth It

Overtime is one of the most common ways people can earn extra money without getting second jobs or side gigs. But is working overtime worth it? Extra cash is great, but spending time with your family and relaxing should also be a priority. 

At first glance, it may be hard to tell if overtime is worth it. But the more you know about working overtime, the better you’ll be able to tell if it’s the right choice for you. 

What You Need to Know About Overtime Pay

Overtime works by allowing employees to work extra hours within a pay period for increased pay. According to the United States Fair Labor Standards Act, any employee who works more than 40 hours in a single workweek should earn overtime pay. After working 40 hours, an employee starts to earn at the rate of one and one-half times their regular pay rate for every extra hour worked. People refer to this rate of pay as “time and a half.” 

The traditional workweek is usually broken up into shifts of eight hours, spread out over five days of the week. Suppose you keep a traditional work schedule and want overtime pay. In that case, you may ask your employer if you could work weekends, start work early, or do extra work after regular hours. The more time you spend working overtime, the more money you will earn. 

To know whether your future job offers employees overtime hours, ask during the recruitment process. Usually, many companies collect personal data such as available working hours, desire for overtime work, and more when hiring. So if you know you definitely want to work longer hours, be sure there’s not a fundamental misunderstanding and keep your potential employer informed of your wants and needs upfront. If you already have a job and want to know if your current employer offers overtime, you can ask your company’s HR department. 

What are the General Pros and Cons if I Work Overtime?

Picking up a few overtime shifts can have some excellent benefits for your wallet. But, if you don’t maintain a healthy work-life balance, you could end up facing a great deal of stress. Before you commit to working weekends or additional hours for more money, make sure you’re well aware of the pros and cons. And make sure you’ve considered all of your options, including no-credit-check loans for borrowers with low credit scores.

Pros of Working Overtime 

Working a few additional hours a week could be a great way to earn extra money. When you have a bit of bonus income coming in each paycheck, you may find it’s easier to stay on top of your finances or meet your financial goals.

For example, if you spend just a few hours working overtime here and there during the week, you could end up boosting your income by a few hundred dollars every month. This could be a great way to start building an emergency fund!

Working overtime can also be a great way to gain job experience. It makes sense that the longer you do something, the better at it you will become. Also, volunteering to work extra hours shows your current employer that you have the dedication to doing a good job. Taking an initiative like this may even encourage your boss to start paying you more money for your regular shifts during the week. Employers are usually willing to spend a little extra money on workers they can rely on for hard work. 

Another great benefit of overtime is that it can help you save for retirement! And learning how and when to plan for retirement is a big part of planning your future!

Cons to Consider Before Working Overtime Hours 

Working overtime can help earn more income for your financial goals, but it should never come at the cost of your mental health. Before committing yourself to work overtime, make sure your new work schedule won’t turn your life upside down. 

For example, if you work overtime too much, you may find it difficult to find time to spend on yourself or with loved ones. Working overtime does bring in more money, but an additional hour with friends and family can be just as important at the end of the day. 

The only time you should say yes to working overtime is when you know it will fit in with your schedule and won’t cause too much disruption to your everyday life. 

Can A Company Limit my Overtime Hours? 

Unfortunately, yes. When it comes to working overtime, employers have the power to decide if they want to allow overtime work, and if so, how much. Employees have the power to control allotted overtime by the hour. If working overtime is a priority in your life, you want to make sure you and your employer are on the same page. 

When an employer schedules working hours for their employees, they almost always have overtime in mind. If a company does not allow overtime, it must be careful about how many hours they schedule for employees. Sometimes, employers may even change a schedule mid-week to avoid unwanted overtime. 

For example, suppose you were scheduled to work five shifts of eight hours during the week but ended up working four shifts of ten hours because things were busy. In that case, your employer may say you don’t have to come into work for that fifth shift. Some people might find it nice to get a surprise day off after working longer hours, or some people may view it as being cheated out of extra money. Depending on how you look at it, impromptu schedule changes can be either a pro or a con of overtime. 

And then there’s some jobs that may allow you to work whatever hours you desire. Ride share and delivery apps may allow you to work however many hours you want. If you’re an Uber driver and need a loan, you may even consider just increasing your overall hours.

Can Overtime Money Affect my Tax Bracket? 

As you work overtime, your earnings are taxed just like the rest of your paycheck, but slightly differently. Overtime pay is taxed at what is called a marginal tax rate. Marginal tax rate is the total taxes paid on any additional or extra income. While you do pay more taxes on overtime income, you still end up bringing home more money than you would if paid at your regular rate.  So don’t worry about the tax collector taking all your extra money when working overtime. 

How much overtime you work will determine if you qualify for a higher tax bracket or not. If you work more hours consistently, your total income will start to increase. The higher your income gets, the more likely it may be that you will enter the next tax bracket and end up paying a bit more in state or federal taxes. But given the average tax rate, you would have to work extremely long hours in order to move to a higher bracket from overtime pay alone. 

Breakdown of Federal Tax Brackets 

Wondering just how much overtime money could affect your life? Here’s a breakdown of tax brackets work. Take a look so you can decide if working overtime is a smart choice for you. 

There is a 10% tax rate for single filers who make $0-$10,275 a year, married individuals who make $0-$20,550 a year, and households who make $0-$14,650 a year. There is a 12% tax rate for single filers who make $10,275-$41,775 a year, married individuals who make $20,550-$83,550 a year, and households who make $14,650-$55,900 a year. And there is a 22% tax rate for single filers who make $41,775-89,075 a year, married individuals who make $83,550-$178,150 a year, and households who make $55,900-$89,050 a year.


US Department of Labor—Overtime

Tax Foundation—2022 Tax Brackets

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