FLSA Regular Rate & Overtime Calculator
Calculation Results
How the FLSA Regular Rate is Calculated
Under the Fair Labor Standards Act (FLSA), overtime isn't always as simple as multiplying your hourly rate by 1.5. If you receive bonuses, commissions, or shift differentials, these must be included in your "Regular Rate of Pay" before calculating overtime.
Step 1: Determine Total Compensation
Sum all remuneration for employment, including base hourly pay, non-discretionary bonuses (production bonuses, attendance bonuses), and shift differentials. Exclude gifts, paid time off, and discretionary bonuses.
Step 2: Calculate the Regular Rate of Pay (RRP)
Divide the total compensation by the total hours actually worked in the workweek.
Formula: Total Compensation / Total Hours Worked = Regular Rate.
Step 3: Calculate Overtime Premium
For every hour over 40, the employee is entitled to an additional 0.5 times the Regular Rate of Pay. Since the "straight time" (1.0) is already accounted for in the regular rate calculation for all hours worked, you add the half-time premium.
Example Calculation
If an employee earns $20.00 per hour, works 50 hours, and receives a $100 production bonus:
- Base Pay: $20.00 × 50 hours = $1,000
- Total Compensation: $1,000 + $100 bonus = $1,100
- Regular Rate: $1,100 / 50 hours = $22.00/hour
- Overtime Premium: $22.00 × 0.5 = $11.00
- Total OT Pay: 10 OT hours × $11.00 = $110.00
- Total Gross Pay: $1,100 + $110 = $1,210
Commonly Included vs. Excluded Items
To ensure compliance, you must know what counts toward the regular rate:
- Included: On-call pay, shift differentials, non-discretionary bonuses, commissions, and value of meals/lodging.
- Excluded: Vacation/Sick pay, true gifts, reimbursement for expenses, and purely discretionary bonuses (where the employer decides both the fact and amount of payment without prior promise).