Regular rate of pay
Regular rate of pay is the rate federal overtime is built on, found by dividing a workweek’s total includable earnings by the hours actually worked.
- LAW
- FLSA §7(e)
- BOUNDARY
- The workweek, not the pay period
- OT RATE
- 1.5 × the regular rate for hours over 40
- WATCH FOR
- Late bonuses reopen past weeks
Base rate alone often does not produce the regular rate. Nondiscretionary bonuses, shift differentialsShift differential. A shift differential, also called a shift premium, is extra pay added to an employee’s base wage for working a less desirable shift.Click to open the term, and commissions raise the regular rate, and piece earnings go into it, for the week they cover. Each hour over 40 in a workweekWorkweek (FLSA). A workweek under the Fair Labor Standards Act is a fixed, regularly recurring period of 168 consecutive hours used to compute overtime.Click to open the term then earns 1.5 times the regular rate. That is an extra half on top of straight time where the week’s pay already covers every hour worked. A bonus can be discretionary under one plan and nondiscretionary under another, so the plan decides, not the name.
Which earnings go into the regular rate?
Payroll maps each earning by its effect on the calculation, never by its label. An included earning counts for the workweek it covers, even when it is paid later. The lists show where common earnings generally land.
- Nondiscretionary bonuses
- Production and attendance incentives
- Commissions
- Piece and flag earnings
- Shift differentials
- On-call pay
- Truly discretionary bonuses
- Gifts
- Paid time off that was not worked
- Reasonable reimbursements for business expenses
- Benefit contributions
Work it out: one week
Enter the hours worked each day, then set the base rate and the bonus. The card adds the bonus to the week’s straight-time pay, divides by the hours worked, and adds half that rate for each hour over 40.
One workweek: hourly pay plus a nondiscretionary bonus
Federal FLSA overtime for one non-exempt employee paid a single hourly rate plus a nondiscretionary bonus earned in the same workweek, counted Monday to Sunday here. Base rates start at the $7.25 federal minimum wage (2026). It leaves out other pay that goes into the regular rate, such as commissions and shift differentials; pay the regular rate excludes, such as paid time off; weeks with two pay rates; and bonuses that cover more than one week. Other cases and state law can change the result.
How does the regular rate work with two pay rates?
Weeks that mix rates or classifications generally use a weighted averageWeighted average overtime rate. The weighted average overtime rate is the federal regular rate for a week at two or more pay rates: straight-time earnings divided by hours worked.Click to open the term. Add up the includable straight-time earnings across every rate and divide by the total hours worked. The overtime premium then applies to that rate. Federal rules also allow paying each overtime hour at 1.5 times the bona fide rate for the work done in that hour. That takes an agreement made before the work is performed, and bonuses and other includable pay still need their own overtime.
Frequently asked
- Fair Labor Standards Act, 29 U.S.C. §207(e)
- 29 CFR Part 778, Overtime Compensation
- U.S. Department of Labor, Fact Sheet #56A: Overview of the Regular Rate of Pay Under the FLSA
General information, not legal or tax advice. Apply current federal and state rules with qualified guidance.