The psychology of being overworked and underpaid

Stressed woman with hands on her head looking at a laptop.

The information provided on this website does not, and is not intended to, act as legal, financial or credit advice. See Lexington Law’s editorial disclosure for more information.

A competitive salary is something we all strive for in our careers, but for some, the salary we know we deserve doesn’t necessarily match our reality. An employee may put in extra hours, take on more responsibilities and go the extra mile, but they still may not be properly compensated for their work. 

Being overworked and underpaid isn’t as uncommon as we think. According to a poll conducted by Gallup, 43 percent of U.S. workers believe they are underpaid. 

Unfortunately, this can have a negative impact on a person’s productivity, mental health and even credit health. So, what can you do if you feel you’re not being fairly paid at work? 

Read on to find out the psychological impact of being overworked and underpaid and how you can combat this issue—or jump straight to the infographic below. 

Impacts of being overworked and underpaid

Sometimes we’re so eager to accept a job that we settle for whatever salary we’re offered, only to find out that what we’re given doesn’t match the responsibilities we’ve taken on. Or, you may have been at a company for a while and experienced an increase in your workload but seen little to no increase in pay. 

Being overworked and underpaid can ultimately lead to a multitude of feelings that can cause more harm than good. Here are three signs you shouldn’t ignore:

Decrease in productivity

Employees who work long hours and have heavier workloads aren’t necessarily the most productive. Some may think the more hours you work, the more you’ll get done, but for most, this can have the opposite effect.

The more work an employee takes on, the more prone they become to mistakes. This can lead to feelings of burnout, sleep deprivation and work-life imbalance due to stress and the inability to keep up with the heavy workload. On top of that, if you’re being underpaid, it can make it extremely difficult to stay motivated in your role. 

Gallup found that 23 percent of employees felt burnt out almost always at work, according to a study made up of 7,500 full time employees. When it becomes hard to juggle workplace stress, people can find it difficult to function and stay productive. The same study conducted by Gallup also found that 13 percent of workers are less confident in their work performance when experiencing symptoms of burnout.

13% of workers are less confident in their work performance when feeling burnt out. Source: Gallup.

Employees may start to feel disconnected from their work and may even have built up resentment toward their employer because of their lack of compensation, causing a never-ending cycle of stress, burnout and lack of productivity. These feelings can ultimately impact employees’ overall well-being and mental health. 

Negative effects on your mental well-being 

Most people spend the majority of their time in the workplace. Unfortunately for some, the stresses from work can be hard to shut off even when leaving the office for the day. According to a study conducted by Wrike, 94 percent of employees said they felt stress at work and 54 percent said the stresses from work negatively affect their home life.

57.9% of employees said work has impacted their mental health in some way. Source: Paychex.

Long work hours, an increase in work-related tasks and insufficient pay can all start to take a toll on a person’s physical and mental health. A survey conducted by Paychex found that 57.9 percent of employees said work impacted their mental health in some way. 

Damaged credit health  

Aside from mental health and productivity, being underpaid can start to hurt your financial standing. Though your income doesn’t have a direct impact on your credit score, lack of income can make it more difficult to pay your bills on time. A survey by WalletHub found that 30 percent of respondents missed credit card payments because they didn’t have enough money. 

30% of people missed credit card payments because they didn’t have enough money. Source: WalletHub.

A Gallup poll also found that 55 percent of women feel they are underpaid for the amount of work they do, which could play into why they hold nearly two-thirds of the student loan debt in the U.S. With women receiving lower-than-average wages, keeping up with student loans and other debt payments becomes harder, thus affecting their overall credit health. 

6 ways to handle being underpaid 

Being underpaid is a problem that many people find themselves in and struggle to get out of. The only way to get out of this predicament is to take matters into your own hands. Here are six ways you can get out of being underpaid: 

1. Negotiate a competitive raise

Present your employer with an exact dollar amount and provide documentation of your work and performance.

Asking for a raise can seem scary and intimidating, but it’s an important step toward solving your problem. Though it’s not always the easiest thing to do, you’ll never know if you don’t ask. 

When asking for a raise, make sure you do your research on your industry’s salary range and provide an exact number when meeting with your employer. Providing an exact dollar amount as opposed to a salary range will show your employer that you know what you want and will make the negotiation process easier. Try aiming a little higher than what you would like to leave room for negotiation. When researching salary ranges, tools like Salary.com and LinkedIn’s salary tool can be a huge help. 

To support your case, come to the meeting with documentation to show your work and accomplishments thus far. Provide hard data, numbers, positive feedback you’ve received in the past and all of the ways you have helped and plan to help increase the company’s bottom line. The more evidence you provide, the better chance you have at landing that raise. 

2. Review company growth path and policies 

Schedule an official performance review with your employer to discuss your progress and an increase in pay.

Most companies give performance reviews and have a growth path clearly noted, so it may be worth revisiting your company policies first. Growth paths are important in understanding what’s expected from your employer in order to progress within the company and earn a higher wage. 

If you haven’t received an official review, get one on the schedule with your boss. A 2018 report found that 68 percent of executives say they learn about employees’ concerns for the first time during performance reviews. If you’re concerned about your growth within the company, don’t wait for your employer to come to you about it. 

3. Start a conversation about your workload

Consider decreasing your hours to alleviate workplace stress and create a healthier work-life balance.

If you’re continuing to work long hours and find the pay still isn’t worth it, it might be beneficial to have an open and honest conversation about the amount of work you’ve taken on. If your employer is unable to give you a raise, you may want to discuss cutting back on your hours or workload.

The result may not be an increase in pay, but you may be happier in your role and be able to perform better if they ease up on your day-to-day tasks. Your pay sometimes isn’t worth being unhappy at work. In fact, one of our studies on employee happiness found that 60 percent of Americans said they would take a job they loved with half their current income over one they hated. 

Employers may not be aware of the impact the extra work is having on you, so always try your best to be transparent about your load to find a healthy compromise. 

4. Start exploring other options 

Aside from monetary benefits, take other factors into consideration, such as health insurance coverage and time-off policies.

If your request for a raise gets denied and you still find yourself in the same predicament, you might want to start exploring other options. In fact, those experiencing symptoms of burnout at work are 2.6 times as likely to actively be looking for another job. 

Though monetary benefits are usually of the utmost importance, remember to consider other factors like health insurance options, flexible hours, vacation policies and overall company culture. The issues you experience in your current position can help you determine what you’re looking for in your next role. 

5. Consider quitting your job 

Make sure you’re in a good financial standing and have at least 3 to 6 months of pay saved.

At the end of the day, no job is worth putting your mental health at risk. If your current employer isn’t paying you what you deserve and you don’t feel fulfilled in your role, consider moving on. Now that you’ve done extensive research on your industry’s salary range, you’ll know what range to keep in mind when applying for other positions. 

Before jumping the gun and resigning from a position, make sure you’re financially prepared. In these situations, it’s smart to have at least three to six months’ worth of pay saved to give you some cushion during your job search. It may become more difficult to get approved for a credit card without a job, so having saved up income can help ensure you’re able to pay your credit balance. 

6. Know your worth 

Use Glassdoor’s Know Your Worth tool to compare salary levels according to location, experience level and job title.

Understanding your own worth means being clear on the value you can bring to a company. When you know your worth, asking for a raise and vocalizing your concerns will start to come naturally to you. 

Assess your own skills and level of expertise and be realistic with yourself. Once you’ve analyzed your own skills and industry’s expectations, you’ll have a better understanding of an appropriate wage. Glassdoor has a Know Your Worth tool that can help you determine salary ranges by title, experience level and location. 

The most important thing to remember is to not sell yourself short. Research from Glassdoor found that 59 percent of employees did not negotiate salary and accepted the first offer they were given. Know your worth and don’t settle for less than what you deserve. 

Money isn’t everything when it comes to employment, but it can certainly start to impact your career and personal growth if it remains stagnant. If your paycheck isn’t reflecting your worth, take action and make sure you’re getting the compensation that will set you up for further financial success. 

For tips on how to handle being overworked and underpaid, check out our infographic below.


Reviewed by Kenton Arbon, an Associate Attorney at Lexington Law Firm. Written by Lexington Law.

Kenton Arbon is an Associate Attorney in the Arizona office. Mr. Arbon was born in Bakersfield, California, and grew up in the Northwest. He earned his B.A. in Business Administration, Human Resources Management, while working as an Oregon State Trooper. His interest in the law lead him to relocate to Arizona, attend law school, and graduate from Arizona State College of Law in 2017. Since graduating from law school, Mr. Arbon has worked in multiple compliance domains including anti-money laundering, Medicare Part D, contracts, and debt negotiation. Mr. Arbon is licensed to practice law in Arizona. He is located in the Phoenix office.

Note: Articles have only been reviewed by the indicated attorney, not written by them. The information provided on this website does not, and is not intended to, act as legal, financial or credit advice; instead, it is for general informational purposes only. Use of, and access to, this website or any of the links or resources contained within the site do not create an attorney-client or fiduciary relationship between the reader, user, or browser and website owner, authors, reviewers, contributors, contributing firms, or their respective agents or employers.