Regular Rate of Pay Calculator (FLSA)
Calculate the true weighted average hourly rate for overtime compliance.
Understanding the Regular Rate of Pay
Under the Fair Labor Standards Act (FLSA), the "Regular Rate of Pay" is not necessarily just an employee's base hourly wage. It is the actual hourly rate calculated by dividing the total remuneration for employment (with some exceptions) by the total number of hours actually worked in a workweek.
This calculation is critical because federal law requires overtime pay to be at least 1.5 times the Regular Rate, not the base rate. If an employee receives bonuses, commissions, or shift differentials, the regular rate increases, which in turn increases the overtime pay owed.
What Included in the Regular Rate?
- Base Wages: Your standard hourly pay for all hours worked.
- Nondiscretionary Bonuses: Bonuses promised in advance to induce employees to work more efficiently or stay with the company (e.g., attendance bonuses, production bonuses).
- Commissions: Payments based on a percentage of sales or profits.
- Shift Differentials: Extra pay for working undesirable hours (e.g., night shifts or weekends).
The Regular Rate Formula
The math follows these specific steps:
| Step | Action |
|---|---|
| 1 | (Base Rate × Total Hours Worked) + Bonuses + Commissions + Differentials = Total Remuneration |
| 2 | Total Remuneration ÷ Total Hours Worked = Regular Rate of Pay |
| 3 | Regular Rate × 0.5 × Overtime Hours = Overtime Premium |
| 4 | Total Remuneration + Overtime Premium = Total Gross Pay |
Example Calculation
Imagine an employee who earns $20.00/hour. In one week, they work 50 hours and earn a $100.00 production bonus.
- Straight-time pay: ($20.00 × 50) + $100.00 = $1,100.00
- Regular Rate: $1,100.00 ÷ 50 hours = $22.00/hour
- Overtime Premium: $22.00 × 0.5 × 10 hours = $110.00
- Total Pay: $1,100.00 + $110.00 = $1,210.00
If the employer had incorrectly used the $20 base rate for overtime, they would have paid $1,150.00, resulting in a $60 underpayment.
Frequently Asked Questions
Are discretionary bonuses included?
No. If a bonus is a true gift or "sum paid as a gift" (like a spontaneous holiday bonus not promised in a contract), it is generally excluded from the regular rate.
Does this apply to salaried employees?
Yes, if the employee is non-exempt and earns overtime, their salary must be converted to an hourly regular rate to calculate overtime correctly.