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
Under just about no situation in the US would there be an effective 100% tax bracket
However, generally, because that one check will be larger, payroll withholdings will withhold tax at a slightly higher rate, often assuming that one check is indicative of your typical earnings (and thus generating a larger tax refund)
In other words, you might make $100 more, but you might be taxed $11 on it despite your previous $100 of income only being taxed $10.50.
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