2026 FLSA rules · Worked examples
Almost every explanation of overtime says "1.5× your hourly rate". That is right only when your hourly rate is the whole story — and for a large share of hourly workers it is not. The federal rule is built on your regular rate, which is not always the number on your offer letter.
Under the federal Fair Labor Standards Act, non-exempt employees must receive at least one and a half times their regular rate for hours worked beyond 40 in a workweek. The workweek is a fixed, recurring seven-day period — not your pay period.
That distinction costs people money. Working 30 hours one week and 50 the next totals 80 across a bi-weekly period, which looks like no overtime. It is 10 overtime hours, because each week stands on its own.
The regular rate is total pay for the week divided by total hours worked. Several things have to be included in "total pay" before the division:
A genuinely discretionary bonus — decided after the fact, not promised, not tied to performance — is excluded. A holiday gift is discretionary. A "hit target, get $100" bonus is not, no matter what it is called.
Someone earning $20.00/hour works 50 hours in a week and receives a $100 attendance bonus. Here are the two calculations:
The common (incorrect) calculation
The correct calculation
The gap is $10.00 a week — around $520 a year if it recurs. It is small enough per paycheck to go unnoticed and large enough over a year to matter, which is exactly why it is one of the most frequently cited overtime errors.
Work out your own overtime
Enter your rate, regular hours and overtime hours to see the split — or use the time card calculator if you need to total your week first.
Open Overtime Calculator →Being salaried does not make you exempt. Exemption generally requires both a salary at or above the applicable threshold and duties that fit a recognised exemption — executive, administrative, professional, outside sales, or certain computer roles. Failing either test means you are non-exempt and owed overtime.
Federal law is a floor, not a ceiling. Where a state rule is more generous, it applies. The common variations are daily overtime past 8 hours in a day, double time past a longer daily threshold, and seventh-day rules for consecutive days worked. California is the most cited example, but it is not the only one — check your own state labor department rather than assuming the federal rule is all that applies to you.
How do I calculate overtime pay?
Take your regular rate — total pay for the week divided by total hours worked — and pay an extra half of it for every hour past 40, on top of the straight-time pay you already earned for those hours. For a simple hourly job with no bonuses that works out to the familiar 1.5× your hourly rate.
Does a bonus change my overtime rate?
Yes, if it is non-discretionary — production, attendance, or safety bonuses, and most shift differentials. It must be added into the regular rate before overtime is computed. In our worked example a $100 weekly bonus lifts the regular rate from $20.00 to $22.00, and leaving it out underpays about $10.00 a week.
Is overtime based on the workweek or the pay period?
The workweek. A fixed, recurring seven-day period is the unit under federal law. Working 30 hours one week and 50 the next in the same bi-weekly period is still 10 hours of overtime, even though the total is 80.
Am I entitled to overtime if I am salaried?
Possibly. Being paid a salary does not by itself make you exempt — exemption depends on meeting both a salary threshold and a duties test. Many salaried employees are non-exempt and legally owed overtime.
Does my state have different overtime rules?
Several do, and where they differ the rule more favourable to the employee applies. California and a few other states require daily overtime past 8 hours, and some have double-time rules. Check your state labor department for the specifics.
Can my employer average my hours across two weeks?
Generally no for non-exempt employees. Averaging two weeks to avoid an overtime obligation is not permitted under the standard FLSA rules; each workweek stands alone.
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