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
Tax rates are like buckets. You put your first thousand of income in the first bucket and 10% gets taken out for taxes. You put your second thousand in the next bucket and 15% gets taken out. You put your next thousand in a third bucket and 20% gets taken out, and so on. So the more you work the more buckets you fill.
The later buckets get more taken out but you still have all your earlier buckets.
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