Can I split overtime between multiple paychecks?

Question

My husband sometimes works 70 hour weeks which would be good for us except we are loosing so much in taxes that it is almost not worth it. Recently someone told us that some companies allow employees to split overtime hours between paychecks to avoid higher tax brackets. Is this possible? If so does anyone know how?

Answer 1

As noted above, the FLSA (Fair Labor Standards Act) requires that OT be paid on the regular payday for that time period.

As far as the tax issue - if the taxes end up not being owed, you will get a refund when you file your taxes, so you will get the money back eventually. If the taxes are owed, you want the taxes to be taken out, so you will avoid penalties for underpayment.

If you regularly get large refunds, you may want to have your husband adjust his W-4 form using the IRS calculator ( http://www.irs.gov/individuals/article/0,,id=96196,00.html ) a few times each year.

Answer 2

If too much tax is being withheld to the point where you will be receiving a large refund next year, you need to set the allowances on your husband's W4 a little higher.
This will cause the payroll department to withhold less in taxes. Instead of getting back a big refund, you will have a little extra on each paycheck.

Splitting overtime onto multiple checks is not a good practice. I worked in payroll for a multi national company and we would never allow something like that. You can contact the payroll department and ask. Here are the problems with it though: if you have ANY deductions other than taxes, they will come out of each check unless the payroll people stay on top of it.
Example: if you have $25 direct deposited to a savings account from your paycheck and split the overtime onto two paychecks, there would be $25 deposited from each check instead of from one. It could be the same with garnishments, health insurance premiums, voluntary deductions like donations to a charity, 401k etc. I can't tell you how many times I have had to reverse or refund items like that when people requested separate checks.

We would manually control taxes only if there was a large adjustment onto a check---like a correction from a prior period.

Honestly, I don't know about the legality but I don't think any payroll department wants to start getting into this practice. Can't hurt to ask but the simple solution to this issue is to change the W4.

Answer 3

I dont think of OT is appropriate to you in this occasion. those sound like 2 different jobs (according to danger with different employers) and that i dont think of there's a regulation that mesh the hours from 2 jobs at the same time to calculate OT like that. And, on the federal point, OT does not kick in till after 40 hrs is labored for the period of the week. basically some states additionally require on an standard basis OT to count number yet unlike your occasion. in case you artwork 4 hours on your day activity, then you fairly artwork 4 hours on your day activity. The 6 hours from the night activity is break free the shift of the day activity. there is probable no OT purely in view which you artwork 2 jobs and the comprehensive hour count selection would omit 8 hrs.

Answer 4

If you did, it wouldn't make any difference in the long run. They might withhold more from his check the weeks he works heavy overtime, but your tax at the end is based on income for the year, not any given week, so it would just change your refund, not save you total taxes.

Answer 5

Even though this is not allow, some smaller companies/business may allow an employee to do it, however, I would think that any reputable business would be unwilling due to the liability they would be exposing themselves to.

Answer 6

Federal law says you report the time worked in the period you worked it. Anything else is a violation of Wage and hour laws.