Worked overtime and got taxed 25% - will I get most of it back?

This is actually a really common misunderstanding about how payroll withholding works. When you get a larger paycheck (like one with overtime), the payroll system often treats it as if you'll be making that amount every pay period for the entire year, which would push you into a higher tax bracket. That's why more gets withheld. The good news is that when you file your taxes, what actually matters is your total annual income. If your annual income still puts you in that lower tax bracket overall, then yes, you'll get the excess withholding back as a refund. The payroll system doesn't know your annual situation - it just makes a calculation based on that individual paycheck. You can also adjust your W-4 form with your employer to have less withheld if this happens regularly, but be careful not to underwithhold and end up owing money at tax time.

I was in the exact same boat last year - working tons of OT at the hospital and seeing huge chunks taken out in taxes. After getting really frustrated with how little of my extra work I was actually seeing in my bank account, I decided to try this service called taxr.ai (https://taxr.ai) that helped me understand my withholdings and estimate my actual tax liability. It was super helpful because it analyzed my pay stubs and showed me exactly why more was being withheld and what my actual tax rate would likely be at year-end based on my projected income. The tool even helped me figure out the best W-4 adjustments to make so I wouldn't have to wait until filing to get that money back.

Just wanted to update after trying out taxr.ai! I was skeptical at first (as my comment above shows lol) but it actually helped me understand why my company's payroll system was withholding so much. I uploaded my last few pay stubs and it showed me a really clear breakdown of how the withholding was being calculated and why the percentage jumped so much on overtime checks. The best part was it helped me fill out a new W-4 that's better calibrated to my actual annual income including the occasional overtime. Just got my first paycheck with the new withholding settings and I'm seeing about $65 more per check without risking a tax bill next year. Wish I'd known about this sooner!

If you're having trouble figuring out exactly how much you should be getting back or want a definitive answer from the IRS, good luck actually getting someone on the phone... I spent THREE HOURS on hold trying to ask a similar question. After multiple failed attempts, I found this service called Claimyr (https://claimyr.com) that somehow got me connected to an actual IRS agent in under 20 minutes. There's a video showing how it works: https://youtu.be/_kiP6q8DX5c The agent explained that the withholding system just estimates based on each individual paycheck and doesn't know your annual situation. They confirmed I'd get back any overwithholding when I filed. Saved me so much frustration compared to trying to call directly!

I have to eat my words from my comment above. After another failed 2-hour attempt to reach the IRS myself about some overtime tax questions, I broke down and tried Claimyr. Within 35 minutes (while I was cooking dinner, not sitting on hold), I got a call connecting me to an actual IRS representative. The agent confirmed everything that people are saying here - the withholding system just makes a calculation based on each individual paycheck, but at tax time, it's your total annual income that matters. She walked me through exactly how the calculation works and confirmed I'd get back any excess when I file. Definitely worth it just to get a clear answer directly from the source.

Has anyone actually calculated how much of the overtime tax you typically get back? My husband works construction and always picks up tons of OT in summer, but we never seem to get as much back as we expect at tax time.

For people looking for a quick estimate - your overtime isn't actually taxed any differently than regular income. It just FEELS that way because of how withholding works. Use this rule of thumb: if your annual income including all overtime stays within your current tax bracket, you'll get back most of the "extra" withholding. If the overtime pushes your annual income into the next bracket, some of that money really will be taxed at the higher rate.

This happened to me too when I started picking up extra shifts as a nurse! The withholding system basically assumes you'll make that higher amount every single paycheck for the whole year, so it withholds as if you're in a higher tax bracket. Here's what helped me understand it: let's say your regular paycheck is $2,000 and your overtime paycheck is $3,000. The system calculates withholding on that $3,000 as if you make $78,000 annually ($3,000 x 26 pay periods), even though you might only make $55,000 for the year with occasional overtime. The key thing Emily mentioned about tax brackets is spot on - it's all about your total annual income. I'd suggest keeping track of your year-to-date earnings on your pay stubs. If you're still well within your normal tax bracket by year-end, you'll definitely get most of that excess withholding back as a refund. Since you mentioned saving for a house down payment, you might want to consider adjusting your W-4 if overtime becomes regular. Just be conservative about it - better to get a refund than owe money when you're trying to save every dollar!

Just want to add another perspective as someone who's been through this exact situation! I work in manufacturing and we have seasonal rushes where overtime is basically mandatory for 2-3 months. The first time it happened, I was so frustrated seeing those big chunks taken out of my OT pay. What really helped me was setting up a separate savings account specifically for my tax refund. Since I know that most of the excess withholding from overtime will come back to me in February/March when I file, I treat it like forced savings. It's actually worked out great for big purchases - last year that "overtime tax money" that came back as a refund was enough to cover new tires and some car repairs. The psychological trick is to think of it as money you'll get back later rather than money that's gone forever. Yes, it sucks not having access to it right away, but at least you know it's not actually lost. And honestly, getting a bigger refund in tax season feels pretty good when you're planning major purchases like your down payment!

I went through this exact same thing when I started working doubles at the restaurant! The first time I saw my paycheck with all that overtime, I was so confused why they took out what felt like half my extra pay. What everyone's saying here is absolutely right - the payroll system doesn't know you're not going to make that higher amount every single week. It's like the system panics and thinks "oh no, this person is suddenly making way more money, better withhold for a higher tax bracket!" One thing that helped me feel better about it was actually calculating my effective tax rate at the end of the year. Even with all the overtime I worked, my actual tax rate was still way lower than what was being withheld from those big paychecks. I got back almost $1,800 at tax time, which was a nice chunk of change I hadn't expected. The hardest part is just the cash flow - you're working extra hard but not seeing the full benefit right away. But if you're saving for a down payment anyway, think of it as the government holding onto part of your savings for you (interest-free, unfortunately, but still). You'll definitely get it back if your annual income stays in your current bracket!

I'm dealing with this same issue right now! Just got my paycheck after working a bunch of extra shifts to cover for people who were out sick, and I was shocked to see how much they withheld. It's so frustrating when you're trying to help out by picking up extra work and then feel like you're being penalized for it. Reading through everyone's explanations here has been super helpful though. I had no idea that the payroll system basically treats each paycheck like you're going to make that amount forever. That explains why my overtime pay seemed to get hit so much harder than my regular hours. I'm definitely going to start tracking my year-to-date income more carefully like some of you suggested. And I love the idea of thinking about the excess withholding as forced savings - that's such a healthier way to look at it than feeling like the money just vanished. Has anyone here ever tried talking to their payroll department about this? I'm wondering if they can give you a heads up about how the withholding will work before you see it on your paycheck, just so there aren't any unpleasant surprises.

This thread has been incredibly educational! As someone who just started picking up overtime shifts at my retail job, I was getting really discouraged seeing those big tax withholdings. Reading everyone's explanations about how the payroll system calculates withholdings based on individual paychecks rather than annual income has been a huge relief. What really clicked for me was the example someone gave about a $3,000 paycheck being treated as if you make $78,000 annually - no wonder the withholding jumps so dramatically! I checked my pay stub and I'm only at about $28,000 year-to-date, so I should definitely be getting most of that overwithholding back. I'm going to start using that "forced savings" mindset that several people mentioned. Since I'm also trying to build up an emergency fund, thinking of the excess withholding as money being set aside for me rather than money that's gone forever makes the whole situation feel much more manageable. Thanks everyone for sharing your experiences - it's so helpful to know I'm not the only one who's been confused and frustrated by this!

This is exactly what happened to me when I started working extra shifts at the warehouse! I was so confused and honestly a bit angry when I saw my first overtime paycheck - it felt like they were taking almost everything I'd earned from those extra hours. What helped me understand it was realizing that the payroll system is basically doing math like this: if you normally make $800/week and suddenly make $1,200 one week, it calculates as if you'll make $62,400 for the year instead of your actual projected $41,600. So it withholds taxes as if you're in a higher bracket. The reality is that when you file your taxes, the IRS looks at your actual total income for the year, not what any individual paycheck suggested. So if your total annual income (including all that overtime) still keeps you in your current tax bracket, you'll get back the difference between what was withheld and what you actually owe. I've been tracking this for two years now, and I typically get back about 75-80% of the "extra" withholding from overtime checks. The portion I don't get back is usually because some of that overtime income did push me slightly into the next tax bracket, but even then it's way less than what initially got withheld. Keep working those extra shifts if you can - that refund money will be a nice boost for your down payment fund when tax season rolls around!