Updated 2026-08-29
The two-part FLSA exemption test
Being paid a salary does not by itself exempt you from overtime. The FLSA white-collar exemption requires both parts:
- Salary threshold. The employee must be paid on a salary basis of at least the federal minimum, which is $684 per week ($35,568 per year) in 2026. This is the 2019 level: a higher 2024 figure was struck down in court, and the Department of Labor reinstated $684 by regulation in 2026. Confirm the current figure, as rules can change, and note that some states set higher minimums.
- Duties test. The employee must primarily perform executive, administrative, or professional duties as defined by DOL regulations. Job title alone does not decide it.
Salary basis also means a predetermined amount that is not reduced because of the quality or quantity of work. Employees with total annual compensation of at least $107,432 can qualify under a lighter highly compensated employee test, provided they still earn at least $684 per week on a salary basis. If you earn below the threshold, you are entitled to overtime regardless of your duties.
How to calculate overtime pay from a salary
For a non-exempt salaried worker, overtime is figured by first converting the salary to an hourly rate, then applying the 1.5x multiplier:
- Divide the weekly salary by 40 to get the regular hourly rate.
- Multiply that rate by 1.5 to get the overtime rate.
- Multiply the overtime rate by the number of overtime hours.
Example. A non-exempt employee earns a $800 weekly salary and works 48 hours one week:
- Regular hourly rate: $800 / 40 = $20.00
- Overtime rate: $20.00 x 1.5 = $30.00
- 8 overtime hours x $30.00 = $240.00 overtime pay
- Total weekly pay: $800 + $240 = $1,040
Some employers instead use the fluctuating workweek (half-time) method for salaried non-exempt staff, which pays a smaller overtime premium; confirm which method applies to you. Run your own numbers with the overtime pay calculator.
Second example: a non-exempt employee on a $52,000 salary earns $1,000 a week, or $25.00 an hour. At 45 hours in a week, the 5 overtime hours pay $25.00 x 1.5 = $37.50 each, adding $187.50 for a weekly total of $1,187.50. Overtime is always figured on the regular rate for that week, which must include most non-discretionary bonuses, not on a discounted number.
Common myths and edge cases
- Myth: salary means no overtime. Many salaried employees are non-exempt and must receive overtime. Exemption depends on passing both tests, not on how you are paid.
- Myth: job title determines exemption. Calling someone a manager does not make them exempt. The duties test looks at what a person actually does each day.
- Myth: small employers are outside the FLSA. Enterprise coverage applies at $500,000 or more in annual revenue, but individual employees engaged in interstate commerce are covered regardless of employer size.
Edge cases worth knowing: if an employer improperly docks an exempt worker's salary for partial-day absences, it can destroy the exemption and trigger overtime liability. Part-time salaried staff are still non-exempt if their weekly salary falls below $684. And public-sector employees may receive compensatory time off in place of cash overtime, which is not allowed for most private employers.
The three white-collar duty categories
To be exempt, an employee earning at least $684 per week must primarily perform duties that fit one of these categories:
| Category | Primary duty | Typical roles |
|---|---|---|
| Executive | Managing an enterprise or department and directing the work of two or more full-time employees | Department heads, store managers |
| Administrative | Office work directly related to management or business operations, requiring independent judgment | HR managers, financial analysts |
| Professional | Advanced knowledge in a field of science or learning, or creative work requiring originality | Engineers, attorneys, architects |
Separate rules cover outside sales employees (no salary test) and certain computer professionals (salaried, or hourly at $27.63 or more).
State rules can be stricter
Several states set a salary threshold higher than the federal $684 per week. When state and federal law conflict, the rule that gives the employee greater protection applies, so you could be exempt under federal law but non-exempt under your state's.
State rules can also differ on which hours trigger overtime. California, for example, requires overtime for hours beyond 8 in a single day, not just beyond 40 in a week, and some states have double-time rules. Because state figures change annually, this page does not list them; check your state calculator page or your state labor department for the current threshold and daily-overtime rules where you work.
A handful of states also require overtime after a set number of consecutive days worked, and a few mandate double time past a daily hour limit. Because these figures are revised most years, always confirm the current state rule rather than relying on a number you saw last year.
What to do if you think you are misclassified
If you are salaried, work more than 40 hours a week, and receive no overtime, you may be misclassified. Steps to take:
- Review the DOL fact sheets on the duties test at dol.gov.
- Compare your actual daily tasks against the executive, administrative, and professional criteria.
- Track your hours for several weeks to document the overtime you work.
- Raise the issue with HR or contact your state labor agency.
The FLSA lets employees recover unpaid overtime for up to two years, or three years if the violation was willful, plus liquidated damages equal to the unpaid amount. You cannot waive your right to overtime by signing an agreement, and retaliation for asserting FLSA rights is itself unlawful.
As a scale example, an employee owed 6 unpaid overtime hours a week at a $30 overtime rate loses $180 a week, or about $9,360 over a year; across a two-year lookback with equal liquidated damages, the recoverable amount can approach $37,000. You file a wage claim with the DOL Wage and Hour Division or your state agency at no cost.
This guide is for informational purposes and is not legal or tax advice; consult an employment attorney for your specific situation.
Frequently asked questions
Can a salaried employee get overtime pay?
Yes. A salaried employee who earns below the federal threshold of $684 per week ($35,568 per year) is generally entitled to overtime at 1.5 times the regular rate for hours over 40 in a workweek. Even above the threshold, the employee must pass a duties test to be exempt.
How is the regular rate calculated for a salaried worker?
Divide the weekly salary by 40. If the employee earns $900 per week, the regular rate is $22.50 per hour and the overtime rate is $33.75 per hour.
Does overtime apply to hours over 8 in a day?
Under federal law (FLSA), overtime is only required for hours over 40 in a workweek. Some states, including California, require daily overtime for hours beyond 8. Check your state labor department for the rule that applies to you.
What is the federal salary threshold for overtime exemption?
The federal salary threshold is $684 per week, or $35,568 per year, in 2026. This is the 2019 level, restored after a higher 2024 figure was vacated in court; the Department of Labor reinstated it by regulation in 2026. Some states set higher minimums, so confirm the current figure.
Are bonuses included in the salary threshold calculation?
Non-discretionary bonuses and incentive payments can count toward up to 10% of the salary threshold under the FLSA. Discretionary bonuses, such as a surprise holiday gift, do not count toward it.