The regular rate of pay
Overtime is one and a half times your regular rate — and your regular rate is usually higher than your hourly wage. Here is what belongs in it.
Overtime is one and a half times your regular rate — and your regular rate is usually higher than your hourly wage. Here is what belongs in it.
General information, not legal advice. The regular rate rules have many industry-specific carve-outs. If real money turns on the answer, check the DOL fact sheets below or take advice.
Overtime is not one and a half times your hourly wage. It is one and a half times your regular rate, and the two are only the same when your hourly wage is the only thing you were paid that week.
regular rate = total includable pay for the workweek ÷ total hours worked in the workweek
It is computed per workweek, not per year or per pay period, and it can be different in every single week. That is the part that surprises people: a bonus paid once can change the regular rate for the week it was earned in, and therefore change the overtime owed for that week.
Broadly, anything that is compensation for work performed and is not specifically excluded:
An employee earns $18.00 an hour and works 46 hours in a week. They also worked 20 of those hours on the night shift at a $1.50 differential, and earned a $150 production bonus for that week.
| Step | Working | Amount |
|---|---|---|
| Straight-time wages | 46 h × $18.00 | $828.00 |
| Shift differential | 20 h × $1.50 | $30.00 |
| Production bonus | — | $150.00 |
| Total includable pay | — | $1,008.00 |
| Regular rate | $1,008.00 ÷ 46 h | $21.91 |
| Overtime premium owed | 6 h × ½ × $21.91 | $65.73 |
| Total due | $1,008.00 + $65.73 | $1,073.73 |
Compare that with the naive calculation — 40 × $18 + 6 × $27 = $882 — and the gap is $191.73 for a single week. Almost all of it comes from the bonus and differential that were left out of the rate.
Notice the premium is computed as half the regular rate, not one and a half. That is because the straight-time portion of those six hours is already inside the $1,008 total. Paying 1.5 × $21.91 on top would over-pay. This "half-time premium" method is the standard way to handle weeks that include bonuses.
A quarterly or annual non-discretionary bonus still belongs to the weeks it was earned in. The employer has to apportion it back across those weeks and pay an additional overtime premium on each week that contained overtime hours. This retroactive true-up is one of the most commonly missed obligations in payroll, and it is a frequent source of back-pay claims.
If you work at two rates in the same week — say $16 as a server and $20 as a shift lead — the default method is a weighted average: total earnings divided by total hours. Some arrangements allow the rate in effect when the overtime hour was actually worked to be used instead, but only under specific conditions agreed in advance.
Only if your hourly wage was the whole of your pay that week. Non-discretionary bonuses, shift differentials and commissions all raise the regular rate above the base wage.
Non-discretionary bonuses do. They are added to the week's earnings before the regular rate is calculated, which raises the overtime premium. Truly discretionary bonuses and genuine gifts are excluded.
Because when the regular rate is derived from total weekly earnings, the straight-time portion of the overtime hours is already included in that total. Only the extra half is still owed.
The default is a weighted average — total earnings for the week divided by total hours worked. An alternative method based on the rate in effect during the overtime hours is available only under specific conditions agreed in advance.
No. Pay for time not worked — vacation, holiday and sick pay — is excluded, and those hours are not hours worked for overtime purposes either.
Yes. A non-discretionary bonus must be apportioned back to the weeks it was earned in, and additional overtime premium paid on any of those weeks that contained overtime hours.
Split hours into regular, overtime and double time.
Federal rules plus the states that add daily or lower thresholds.
How the qualified overtime deduction actually works.
A full week with breaks, overtime, saving and export.
Sixty terms you will meet on a pay stub or timesheet.