What is the regular rate of pay?

All straight-time earnings for the workweek divided by all hours worked in it. It includes shift differentials and non-discretionary bonuses, and it is often higher than the base hourly rate quoted in an offer letter.

Can my employer average my hours over two weeks?

No. Each workweek stands alone under the FLSA, so 50 hours followed by 30 still earns 10 hours of overtime even though the two weeks average 40.

How do I calculate overtime on a salary?

Divide the weekly salary by the hours it is intended to cover to get the regular rate, then apply the multiplier to hours past 40. The answer changes depending on whether the salary covers a fixed 40 hours or fluctuating hours.

Does paid time off count toward the 40 hours?

No. Holiday, vacation and sick hours are paid but not worked, so they do not count toward the overtime threshold.

How to calculate overtime pay

Overtime is simple when there is one rate and nothing else in the pay. The moment a second rate, a bonus or a salary is involved, the regular rate has to be worked out first.

The four steps

One: add up hours actually worked in the workweek. Paid leave does not count. The week is a fixed, recurring 168 hours your employer has designated; it does not have to start on a Monday.

Two: work out the regular rate. Divide all straight-time earnings for that week, including shift differentials and non-discretionary bonuses, by the hours worked. With a single rate and nothing else, this is just your hourly rate.

Three: multiply. Hours over 40, times the regular rate, times 1.5. If the straight-time portion of those hours is already in your base pay, you add only the half-rate premium instead.

Four: check state law. If your state has a daily rule or a seventh-consecutive-day rule, calculate under both and take whichever pays more.

Worked example: two rates in one week

Say you work 30 hours at $20.00 in one role and 15 at $30.00 in another, 45 hours in total. The instinct is to pay overtime at the higher rate. The FLSA says otherwise.

Straight-time earnings are $1,050.00. Divided by 45 hours, the regular rate is $23.33. The five hours past 40 are already paid at straight time inside that total, so what is still owed is the half-rate premium: 5 hours at $11.67, or $58.33.

Change the mix and the blended rate moves with it, which is why this cannot be done once and reused.

Worked example: a salaried non-exempt worker

A salary of $800 a week intended to cover 40 hours gives a regular rate of $20.00. Work 46 hours and the six extra are owed at $30.00, so $180 on top of the salary.

If the salary is instead intended to cover whatever hours the job takes, the regular rate falls as hours rise, and only the half-rate premium is owed on the excess. Which arrangement applies has to be agreed in advance, not decided after a long week.

Worked example: a non-discretionary bonus

A $400 production bonus earned over four weeks is not ignored. It is allocated back across those weeks, $100 each, and each week's regular rate is recalculated. On a 45-hour week at $20.00, the extra $100 over 45 hours lifts the regular rate by $2.22, and the five overtime hours are owed another $1.11 each.

A genuinely discretionary gift, decided by the employer after the fact with no promise attached, stays out of the calculation. Most bonuses tied to output, attendance or quality are not discretionary, whatever they are called.

Common questions

What is the regular rate of pay?: All straight-time earnings for the workweek divided by all hours worked in it. It includes shift differentials and non-discretionary bonuses, and it is often higher than the base hourly rate quoted in an offer letter.
Can my employer average my hours over two weeks?: No. Each workweek stands alone under the FLSA, so 50 hours followed by 30 still earns 10 hours of overtime even though the two weeks average 40.
How do I calculate overtime on a salary?: Divide the weekly salary by the hours it is intended to cover to get the regular rate, then apply the multiplier to hours past 40. The answer changes depending on whether the salary covers a fixed 40 hours or fluctuating hours.
Does paid time off count toward the 40 hours?: No. Holiday, vacation and sick hours are paid but not worked, so they do not count toward the overtime threshold.