Do you pay more tax on your overtime?

Many people think you pay more tax on your overtime. That’s not true. Your overtime falls into the same tax bracket as your regular salary. So why does it seem like you end up with less money after working overtime? In this article, we’d like to tell you more about it.

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So why does it seem like you're paying more tax on overtime?

That’s because of the tax credits you receive on your regular salary—such as the general tax credit and the earned income tax credit. These credits mean you pay less tax on your regular salary. You usually don’t receive these extra credits—or receive a smaller amount—on your overtime pay. As a result, it may seem as though more tax is being withheld. In reality, your overtime pay is taxed at the standard rate, while you actually receive a tax credit on your regular salary.

 

Can you get a tax refund?

You may have overpaid payroll taxes. In that case, you can request a refund from the Tax Authority through your tax return.

This happens, for example, when you:

  • works part-time
  • did not work the entire year
  • have taken temporary unpaid leave
  • have incurred high medical expenses.

 

How much you get back depends on your personal situation. Sometimes you may actually have to pay a little extra. That's why it's a good idea to file your tax return every year.

 

Do you have questions about your salary or pay stub? If so, it’s a good idea to check with your UBN contact person; that way, you’ll know exactly where you stand.

 

Don't work at UBN yet?

At UBN Employment Agency, you can be sure you’ll receive fair compensation for your hard work. Your benefits package is at least equal to that of a colleague in the same or Function comparable Function the same company. Find your next job and start doing work you’ll enjoy right away!

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