Does overtime pay count toward Social Security retirement calculation after job conversion from salary to hourly?

Yes, overtime absolutely counts toward your Social Security earnings! Social Security looks at your total earnings that you pay FICA taxes on, not how those earnings were classified by your employer. So regular wages, overtime, bonuses, commissions - all of it counts as long as you're paying Social Security taxes on those earnings. This could potentially benefit you since SS benefits are calculated based on your highest 35 years of indexed earnings. If these higher-earning years replace lower-earning years in your work history, your benefit amount could increase.

my manager just went thru something similar and they told her that SS only counts your 'base pay' not overtime!!! she was super upset because she works like 60 hrs a week now. did you call the SS office to confirm? don't trust what you read online

I faced the EXACT same situation last year when my retail management job switched from salary to hourly! I was concerned too but overtime DEFINITELY counts toward Social Security. Everything on your W-2 that has SS tax withheld counts toward your future benefit calculation. What matters is if you're paying FICA taxes on it, not how the money is earned. The only limit is the annual maximum taxable earnings cap (around $168K for 2024 I think).

To maximize your Social Security benefits given your situation: 1. Your overtime earnings absolutely count toward Social Security as long as you're paying FICA taxes. 2. Since you're 58 and benefits are calculated using your highest 35 years of indexed earnings, these higher-earning years will likely replace lower-earning years from earlier in your career. 3. Consider working until your Full Retirement Age (probably 67 for you) or even delaying until 70 if possible, which would increase your benefits by 8% per year after FRA. 4. Check your earnings record on my.ssa.gov to ensure all your earnings are properly credited. This job change could actually improve your retirement outlook if you continue with this overtime pattern.

Have u tried using Claimyr? I was having the SAME PROBLEM getting through to SS on the phone (kept getting disconnected after waiting 45+ mins). I found this service at claimyr.com that got me connected to a real person at SSA in under 20 minutes! They have a video showing how it works: https://youtu.be/Z-BRbJw3puU - saved me hours of frustration. Much easier than trying to create an online account when you have specific questions.

im confused about something - isnt there a limit on how much counts toward SS each year anyway? so if ur already making good money maybe the overtime doesnt matter because ur already at the max?

MY COMPANY DID THIS SAME THING TO US LAST YEAR AND I HATE IT!!! Sure the overtime "counts" for Social Security but they're just MANIPULATING us to work more hours!!! I was way happier as salary because at least I could leave early sometimes without losing pay. Now I'm punching a clock like an hourly worker after 25 years in management. Did anyone else's health insurance get worse when they made this change too??

Make sure u check that your employer is actually reporting all ur earnings correctly too. My husband had issues where his overtime wasnt showing up in his SS record even tho it was on his W2. Had to get it corrected. Check your SS statement every year!

sorry if this is dumb question but how much difference does it really make in your monthly SS payment if you earn more for a few years right before retirement? like is it worth working all that overtime just for a small boost in SS?

Just wanted to add some perspective as someone who went through a similar transition 3 years ago! I was a salaried operations manager making about $75k, then got converted to hourly. Initially I was frustrated like some others here, but financially it's been great. My overtime definitely shows up on my Social Security statement - I check it every January. The key thing I learned is that even though you lose some flexibility, if you're strategic about when you work overtime (especially in your late 50s/early 60s like you), those higher earning years can really boost your benefit calculation. I'm now 61 and planning to work until 67, and my estimated monthly SS benefit has increased by about $180/month compared to what it would have been with my old salary. That's over $2,000 extra per year for life! Worth checking your projections on the SSA website to see the potential impact.

This is really helpful information! I'm in a similar situation - just turned 56 and my company is talking about converting management to hourly next year. I was worried about losing the salary status, but reading everyone's experiences here makes me feel more optimistic. The fact that ALL earnings subject to FICA taxes count toward Social Security is reassuring. I've been putting off creating my SSA account to check my earnings record, but after reading this thread I'm definitely going to do it this weekend. It sounds like for those of us approaching retirement, these higher-earning years with overtime could actually work in our favor for benefit calculations. Thanks to everyone who shared their experiences - this has been really educational!

As someone who's worked in HR for over 15 years, I can confirm what others have said - ALL compensation subject to FICA taxes counts toward your Social Security earnings record, including overtime pay. Your situation actually sounds pretty favorable! At 58, you're in a sweet spot where these higher-earning years can significantly impact your benefit calculation. The Social Security Administration calculates benefits using your highest 35 years of indexed earnings, so if your new overtime-boosted income ($95k vs your previous $82k salary) replaces lower-earning years from earlier in your career, you could see a meaningful increase in your monthly benefits. I'd definitely recommend creating an account at my.ssa.gov to review your earnings history and run some projections. You might be surprised at how much those extra overtime hours could boost your retirement income!

I went through something very similar when I was converted from salary to hourly at 59! Like you, I was initially concerned about how this would affect my Social Security benefits, but it's actually worked out great. All your overtime earnings absolutely count toward your SS calculation - the key thing to remember is that Social Security doesn't distinguish between regular wages, overtime, bonuses, or any other compensation as long as you're paying FICA taxes on it. Since you're tracking to earn $95k instead of your previous $82k, and you're at an age where these will likely be among your highest earning years, this change could really benefit your retirement. I'd suggest logging into my.ssa.gov to see your current earnings record and projected benefits - you might be pleasantly surprised! The timing of this change at 58 gives you almost a decade to build up those higher earnings years in your calculation.

I'm 62 and just went through this exact conversion 6 months ago! Was making $78k salary as a retail district manager and now I'm hourly with regular overtime putting me around $92k annually. I was initially worried about the same thing, but I can confirm that everything everyone is saying here is correct - ALL your earnings that have FICA taxes withheld count toward Social Security, period. No distinction between base pay and overtime. I actually called the SSA directly (used that Claimyr service someone mentioned - worked great!) and the representative confirmed that my overtime shows up the same as regular wages on my earnings record. At our age, these higher earning years are gold for our future benefits since they'll likely replace some of our lower earning years from decades ago. I'm planning to work until 67 now instead of taking early retirement at 62 because the math just makes sense. My advice: definitely check your earnings record on the SSA website and run the benefit calculators - you might be surprised how much this change could boost your monthly payments!

I'm 55 and just learning about this topic as my company is considering a similar conversion next year. Reading through all these responses has been incredibly educational! It's really reassuring to see so many people confirm that overtime absolutely counts toward Social Security - I had no idea that ALL FICA-taxed earnings are treated equally regardless of how they're categorized. The timing aspect is particularly interesting to me since we're all in that sweet spot age range where higher earnings in our late 50s and early 60s can replace lower-earning years from decades ago. I'm definitely going to create my SSA account and start tracking my earnings record more closely. For those of you who have already made this transition, have you noticed any other unexpected benefits or drawbacks beyond the Social Security implications? The flexibility loss seems to be a common complaint, but the financial upside sounds significant for retirement planning.

I'm 60 and went through this exact same conversion two years ago - from salaried warehouse manager ($74k) to hourly with overtime (now averaging $88k annually). I was initially skeptical about the change, but it's been one of the best things that happened to my retirement planning! All your overtime earnings absolutely count toward Social Security - I've verified this multiple times through my SSA account. The key insight I wish I'd understood earlier is that at our age (late 50s/early 60s), these higher-earning years are incredibly valuable because they replace our lower-earning years from the 80s and 90s in the benefit calculation. I just ran my projections last month and my estimated monthly SS benefit has increased by about $220/month compared to what it would have been with my old salary. That's over $2,600 extra per year for life! Yes, you lose some flexibility, but the financial impact for retirement makes it totally worth it. Definitely create that my.ssa.gov account and check your projections - you'll probably be pleasantly surprised by the numbers!

I'm 59 and just went through this same conversion 4 months ago! Was a salaried operations supervisor making $79k, now hourly with overtime tracking around $94k annually. I had the exact same concerns about overtime counting toward Social Security - turns out I worried for nothing. Everything subject to FICA taxes counts equally, no matter if it's base pay, overtime, bonuses, whatever. I actually called SSA using that Claimyr service mentioned earlier (totally worth it - got through in 15 minutes vs hours on hold) and they confirmed my overtime shows up identically to regular wages on my earnings record. At our age, these higher earning years are replacing much lower ones from the 80s and 90s in our benefit calculation. I ran the numbers on my.ssa.gov and my projected monthly benefit jumped by about $190 compared to staying at my old salary. That's over $2,200 extra per year for life! Sure, I miss the flexibility of leaving early sometimes, but the retirement boost makes it absolutely worth it. You're in a great position at 58 to maximize these final high-earning years before retirement.

I'm 56 and facing a similar potential conversion at my company next year, so this thread has been incredibly valuable! It's really reassuring to see so many people confirm that ALL FICA-taxed earnings count toward Social Security benefits - overtime, bonuses, regular wages, everything. What strikes me most is how many of you have seen actual increases in your projected monthly benefits ranging from $180-$220+ per month. That's life-changing money over a 20-30 year retirement! I've been hesitant about losing salary status, but reading everyone's experiences makes me realize that at our ages (mid-to-late 50s), we're in the perfect window to maximize these higher earning years for retirement. They'll replace our much lower earning years from the 80s and 90s in the Social Security calculation. I'm definitely going to create my SSA account this weekend and start tracking this more closely. Thanks to everyone who shared their real experiences and numbers - it's made me much more optimistic about what seemed like an unwanted change!

I'm 57 and just went through this exact conversion 3 months ago - from salaried retail manager ($76k) to hourly with overtime (now earning around $91k annually). I had the same exact concerns about Social Security! Here's what I've learned: ALL your overtime pay absolutely counts toward your SS benefits as long as you're paying FICA taxes on it. I created my account at my.ssa.gov and confirmed that every dollar of overtime shows up in my earnings record just like regular wages. The timing is actually perfect for us - at 58, you've got about 9-10 years of potentially higher earnings that will replace some of your lower-earning years from the 80s and 90s in your benefit calculation. I ran the projections and my estimated monthly SS benefit has increased by about $165 compared to what it would have been at my old salary. That's nearly $2,000 extra per year for life! Yes, the loss of flexibility is annoying, but the long-term retirement benefit makes it completely worth it. You're in a great position to maximize these final high-earning years before retirement.

I'm 54 and my company is planning a similar conversion next year, so this entire discussion has been incredibly enlightening! It's amazing to see so many real-world examples confirming that ALL earnings subject to FICA taxes count equally toward Social Security - whether it's base pay, overtime, bonuses, or any other compensation. What really stands out to me is how consistently people are reporting monthly benefit increases of $165-$220+ when they run their projections. Over a typical retirement, that's tens of thousands of extra dollars! I've been dreading this potential change because I value the flexibility of salary, but reading everyone's experiences makes me realize that at our ages (50s and early 60s), we're actually in an ideal window to maximize these higher earning years. Since Social Security uses your highest 35 years of indexed earnings, these overtime-boosted years can replace much lower-earning years from the 80s and 90s. I'm definitely creating my SSA account this weekend to start tracking my earnings record and running projections. This thread has completely shifted my perspective from viewing this as an unwanted change to seeing it as a potential retirement planning opportunity. Thanks to everyone who shared their real numbers and experiences!

I'm 53 and my company just announced they're doing this exact same conversion in Q2 next year! This entire thread has been incredibly valuable - I had no idea that ALL FICA-taxed earnings count equally toward Social Security regardless of whether it's overtime, base pay, or bonuses. Reading everyone's real experiences and seeing the actual monthly benefit increases people are reporting ($165-$220+) has completely changed my perspective on this transition. At 53, I have potentially 14-16 years to maximize these higher earnings before retirement, which could really help replace my much lower-earning years from the 80s and 90s in my SS calculation. I was initially dreading losing the salary flexibility, but when you're talking about potentially $2,000+ extra annually for life in retirement benefits, it's really a no-brainer. I'm creating my SSA account this weekend to start tracking my earnings record and running projections. Thanks to everyone who shared their experiences - you've turned what I thought would be bad news into something I'm actually looking forward to from a retirement planning perspective!