Overtime Project II - Payout Question

In October, I wrote about my Overtime Project II.  My goal was to reach 75 hours of OT before Christmas, which would net me approximately $1,000 to put towards my student loans.

I actually reached 54.00 hours, 72% of my goal.  I'm pleased with my effort - and still have some extra work to do in the office.  I'm going to continue to plug away at work, and if I get some more OT - that's great, if not - I won't beat myself up over it.  It's a lot of work - to put in so much work ;)

Currently, I plan on waiting until April before requesting a payout.  I should get a raise in 4 months, and my OT hours will be worth my new rate (it's an accepted practice at my office).  So currently, those hours are worth $24.10 (I gross 47K annually).  I was told in October '09, that my boss would like to see me making $50-$51K - so let's assume I get a $3K raise to $50K gross - my hours would then be worth $25.64 (based on a 37.50/hour work week).

That would mean my 54 hours of overtime would be worth $1,382 (gross) vs $1,301.40 (gross). Considering taxes (marginal rate of 32%) - I would get $884.95 now or $939.76 later.

Would you wait for April, or should I request my OT payout now?

Thanks for all the great comments so far - here are my interest rates:
Alberta Student Loan Interest Rate - 2.25%
Canada Student Loan Interest Rate - 4.75%


  1. Calculate the interest you will pay on $800 of student loan over 4 months. If it costs less to wait than the increased amount you will be able to pay off in April, then you should wait.

  2. The Difference between the two amounts is 6.19% If your interest rate on your student loan is higher then this then I'd take the pay out and pay down the Student loan ASAP. If your student loan is less then this, then I'd wait and take the higher payout.



  3. I agree with those above. This money, although nice to have paid at the higher rate, may do more good for you now rather than later.

  4. I agree with the above statements.

    That being said, you should also take account that the Bank of Canada is likely to raise the interest rate by half a point. Not sure if that'll change your calculations but it's something to consider.

  5. I agree with Jason as well. Makes the most sense. Get that sucker paid off!


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