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.

Last reviewed August 2026 · TimeWorked · General information, not legal or tax advice

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.

The number your overtime is actually based on

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.

What goes in

Broadly, anything that is compensation for work performed and is not specifically excluded:

What stays out

A worked example

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.

StepWorkingAmount
Straight-time wages46 h × $18.00$828.00
Shift differential20 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 owed6 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.

Bonuses paid later

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.

More than one hourly rate

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.

Checking your own

  1. Add every includable dollar you were paid for one workweek.
  2. Divide by every hour you actually worked that week — the timesheet calculator gives you the hours figure.
  3. That is your regular rate. Compare it with the rate on your pay stub.
  4. If the stub rate is lower and you received a bonus or differential that week, that is the likely reason.

Frequently asked questions

Is the regular rate the same as my hourly wage?

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.

Do bonuses affect overtime pay?

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.

Why is the overtime premium calculated at half the rate?

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.

What if I work at two different hourly rates?

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.

Does vacation pay count toward the regular rate?

No. Pay for time not worked — vacation, holiday and sick pay — is excluded, and those hours are not hours worked for overtime purposes either.

My quarterly bonus arrived after the overtime weeks. Does it still count?

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.

Sources

Keep reading

Overtime pay

Split hours into regular, overtime and double time.

Overtime laws by state

Federal rules plus the states that add daily or lower thresholds.

The overtime tax deduction

How the qualified overtime deduction actually works.

Weekly timesheet

A full week with breaks, overtime, saving and export.

Timesheet & payroll glossary

Sixty terms you will meet on a pay stub or timesheet.