and I thought we were done with tax questions for a while

April 23, 2013 5:57 PM

My employer paid me separate checks for my regular hours and overtime hours, and the overtime was not taxed. Is this cool?

So I got a little raise last week. With this I was switched from hourly to salary, and I'm still non-exempt. I'm in California.

I rarely work overtime. I actually get to leave significantly early almost once a week which is why this salary thing is kinda nice. But of course I worked some overtime my first week under this new pay. The part I'm confused about is their choice to pay me separately for the regular hours and the overtime hours.

My check for the regular hours will be directly deposited to my account from our payroll company on Friday as usual, but they already cut me a separate check for the overtime. This overtime pay had no deductions.

Is this right? Shouldn't there still be deductions on my overtime pay? If not, is there anything I need to be tracking on my own? Will I owe on that later?

I'm not sure if this will be reported differently when tax time comes around again, and I don't really want to have to deal with weird tax things.

posted by secretdawn to Work & Money (3 answers total)

Best answer: No, it's not cool. Because the overtime is smaller--the payroll withholding works based on the amount of the check to kind of try to estimate, based on your exemptions, what your taxes should be. A very small check might not have that taken out. But it should always have the Medicare and Social Security portions taken out. Your employer is not handling this properly and you need to tell them that overtime also needs to be cut through the payroll company with your regular check or else their documents are all going to be totally screwy at the end of the year. I'm guessing this is a small business, because I can't imagine anywhere of any size doing this--they probably just don't know any better.
posted by Sequence at 6:04 PM on April 23, 2013

Second ask HR, it's what they're there for.
posted by payoto at 6:59 PM on April 23, 2013

Taxes and retirement contributions yes, health benefits no (those deductions were likely drawn from your direct deposited check). I'd speak with payroll (or HR) and ask them to reverse and reissue the check with the appropriate tax deductions.
posted by contrariwise at 7:26 PM on April 23, 2013