I usually opt to work more during the holiday season because we get higher wages (holiday pay). I signed up for a lot of extra days and my co-workers keep telling me that because I’ll make more money, I’ll get taxed more. So I’ll be receiving less pay than I’d usually make without the overtime. Is that right? I feel stupid right now.
In: Mathematics
You’ll keep more money by taking the overtime. If you get into the next tax bracket, then *only the money above the first bracket* gets taxed at the higher rate. That way, you’ll never keep less of your wages just by earning more money.
For example (not using real tax rates)…
When you earn $10 you might get to keep $9 of it.
If you earned an extra $10, you might only get to keep $8 of that.
So if you earned $20, then you’d get to keep 9+8 = $17.
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