The Small Business Times

How Much Overtime is Too Much?

Overtime can benefit both the company and employees, but how much overtime is too much? In fact, working longer hours to get the job done seems to be common practice. But many wonder whether it’s all worth it at the end of the day.

Establishing how much overtime is too much will depend on your situation. Perhaps your employer doesn’t compensate you for overtime worked. Or working overtime prevents you from doing something else worthwhile. It could even be that the extra work harms your health and well-being. Either way, in these situations, working overtime is not beneficial.

Granted, working overtime helps firms meet demands and compensates for unexpected absenteeism. And it also allows employees to earn extra money. However, overtime is not always a good idea. It has its downfalls, especially when it comes to the employees.

What is Considered Overtime?

The US Department of Labor defines overtime as extra hours you spend at work beyond the standard 40 hours week. And according to a study by Washington Center for Equitable Growth, up to 30% of people in specific fields work overtime. 

Does Overtime Affect Your Taxes?

When employees work overtime, they will earn more than their basic salary. According to the Fair Labor Standards Act (FLSA), employees covered by this act should be paid hourly. However, that is not less than 1.5 times their regular rate pay.  

Many employees fear that this overtime pay will increase their tax bracket, making them liable to pay more tax. This is based on the Federal income tax brackets detailed below. 

Taxable Income Bracket (per annum)Rate
$0 -$9,95010%
$9,951 – $40,52512%
$40,526 – $86,37522%
$86,376 – $164,92524%
$164,926 – $209,42532%
$209,426 – $523,60035%
$523,601 or more37%

For example, employees earning $40,000 might think that they’ll be taxed 12% of their total salary and be left with $35,200. And they may worry that if they work overtime and their pay increases to $40,800, they’ll be liable to pay 22% in tax. Therefore, leaving them with $31,824, which is $3,376 less for more hours worked. 

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The good news is that the Northern American tax system doesn’t work like this. Instead, if your taxable income is $40,800, the government will tax the first $9,950 at 10%. They would then tax the following $30,575 at 12% and the remaining $275 at 22%. Therefore, you will pay a total of $4,724.50 in tax and earn $36,075.50.

The bottom line is, even if overtime payment increases your salary, you won’t earn less than your regular salary due to tax. Instead, the higher your income, the more you make.

How Much Overtime is Too Much?

Overtime Without Benefit

You deserve extra pay when you work for extra hours outside the standard 40 hours per week. However, some employers don’t see it this way. Instead, they refrain from paying the employee their overtime due because they haven’t achieved their objectives. 

These employers don’t care if it takes 40 or 45 hours to meet your set goals. And many employees find themselves working more than 40 hours in a week to meet their bosses’ expectations. 

The employer may promise bonuses and promotions but might fail to pay. And, if the employee is paid, they may receive less than what they feel they deserve. The employee would be working too much overtime without benefit in this case.

Missing Out on Other Opportunities

Putting in long hours for an employer could result In you missing out on specific opportunities.

For instance, having different sources of income helps you build a stronger financial foundation. But if you spend all your spare time at work, it’s difficult to capitalize on any other opportunities. This is particularly disheartening when your primary employer has no track record of rewarding loyal employees. 

As a result, even when you work for your employer over time, you don’t see the benefits. Therefore, working the standard 40 hours per week would be better. Then you could spend time on other projects to supplement your income.

Impact on the Rest of Your Life

You may be wondering how working overtime is a bad idea if you’re making extra money doing it? Sometimes, the cost of spending extra hours at work can impact the rest of your life. 

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A study was done on the impact of overtime and long work hours on occupational injuries and illnesses in the US. It concluded that jobs with overtime caused 61% higher injury hazards than jobs without. 

This resulted from working in hazardous industries or because employees spent more time at work, thus exposing themselves to risk. Such scenarios can cause irreversible damage to your health and other aspects of life. 

Impact on Your Performance During Normal Work Hours

According to data from 18 manufacturing sectors in the US, productivity decreases when employees work overtime. Most of these industries have recorded a 2.4% decrease in productivity when employees take on 10% more hours. 

Working longer hours causes fatigue, resulting in mental and physical lethargy.  This can result in customer dissatisfaction because employees are not serving as required. It could also be a conduit for injury in the workplace.

Impact on Your Health

Too much overtime can take a toll on your health. Some of the health issues related to extra work hours include mental health issues, high blood pressure, and cardiac problems. Working a great deal of overtime can also cause relationship problems, resulting in family conflict or divorce.

Making the Most of Working Overtime

When wondering how much overtime is too much, remember that you can do things to make overtime work for you. 

First, ensure you follow a personal care routine by sleeping at least eight hours each night. Even if you have to work irregular hours, schedule enough time to sleep.

Secondly, keep track of what you earn during the extra hours because it’s crucial to file your tax return. It’s also a good idea to double-check that your employer has recorded your overtime hours correctly.

Finally, do not spend your overtime hours doing unnecessary things, such as socializing with colleagues or friends. You will fail to deliver what you were supposed to, and you may lose the privilege of working overtime for your company. 


Working overtime has its advantages and disadvantages. And determining just how much overtime is too much is entirely up to you. 

Everyone’s situation is different. But, with the information provided above, you should have the tools to determine whether working overtime is to your benefit.