Is working overtime actually worth it?

Overtime at 1.5× sounds great until you bake in higher marginal tax bracket and the long-term productivity drag. The real OT rate is often closer to your normal rate.

How the math works

real OT rate = (gross OT × (1 − tax) − commute time × normal hourly rate) ÷ (work hours + commute hours)

The 1.5× multiplier sounds great until you bake in: (1) higher marginal tax bracket on stacked income, (2) opportunity-cost time of dedicated commute trips, and (3) productivity drag in the days following long sessions.

The break-even commute for OT to beat your normal after-tax rate is typically 20-25 minutes round-trip. Above that, dedicated overtime trips often pay less per real hour than your normal job.

Remote OT is different: zero marginal commute, so the 1.5× multiplier holds. Remote overtime is a much better deal than in-office overtime.

Math runs locally. Inputs never leave your browser. Source on github.

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$56/Hour Overtime Becomes $25/Hour Real After a 1-Hour Commute
Daniel's 1.5× OT rate sounds great until you add 60 minutes of dedicated commute. $164 take-home for 5 hours of total time = $25/hour real. Below his normal after-tax rate. Remote OT is a different animal entirely.
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