ABSTRACT Existing studies have viewed overqualification as either a demotivating state of underutilizing surplus qualifications or a favorable condition of possessing superior capabilities, generating mixed results regarding the impact of overqualification on employees' extra‐role performance. To reconcile this contradiction, the current paper draws on social exchange theory to account for the negative and positive impact of perceived overqualification on helping simultaneously. We build an exchange‐based model and posit that overqualification is a double‐edged sword that affects employees' helping through two opposing pathways. On the one hand, overqualified employees' superior capabilities enable them to feel respected and admired at work, which is captured by perceived status. Such positive social recognition motivates them to reciprocate with increased helping behavior. On the other hand, overqualified employees may perceive their mismatched job positions, where their surplus qualifications are underutilized, as indicative of poor treatment by their employers. In response to this unfavorable employment relationship, overqualified employees may depersonalize coworkers and withhold their helping behavior. Two studies with complementary designs (Study 1: A pre‐registered experimental study, Study 2: A multi‐wave and multisource field study) provided support for our theorizing. Furthermore, we found that the paradoxical effects of perceived overqualification on helping via perceived status and depersonalization were moderated by task and goal interdependence. Theoretical and practical implications are also discussed.