1. the act or practice of withholding more money (especially from wages or taxes) than is legally required or necessary
Usage: commonly used in tax and payroll contexts

1. to withhold more money than is legally required or necessary, especially from an employee's paycheck or tax liability
Usage: third-person singular present: overwithhold; past tense: overwitheld or overwithhold; present participle: overwithholding

Examples

• Many employees are overwithholding taxes, which results in a large refund at the end of the year.
• The payroll department was overwithholding Social Security contributions due to a system error.
• If you claim too few exemptions, you risk overwithholding on your paycheck.
• Overwithholding can tie up your money unnecessarily throughout the year.
• She adjusted her W-4 form to stop overwithholding and increase her take-home pay.
• The company discovered it had been overwithholding health insurance premiums for several months.