The regular rate of pay is the hourly rate the FLSA uses to calculate overtime, found by dividing an employee's total pay for a workweek, minus specific exclusions, by total hours worked. It often differs from the base hourly rate because it includes shift premiums, nondiscretionary bonuses, and commissions.
Key takeaways
- Overtime is owed at 1.5 times the regular rate, not 1.5 times the base rate.
- The regular rate includes most cash pay: shift differentials, commissions, and promised bonuses.
- The FLSA lists exclusions such as discretionary bonuses, gifts, and pay for time not worked.
- When a bonus covers several weeks, it must be allocated back and overtime recalculated.
How regular rate of pay works
Start with everything paid for the workweek. Remove the statutory exclusions: discretionary bonuses, gifts, payments for vacation, holidays, or sick days not worked, expense reimbursements, contributions to benefit plans, and premium pay already at 1.5 times or more. Divide the rest by all hours actually worked in the week. The result is the regular rate (DOL Fact Sheet 56A, Regular rate under the FLSA).
Overtime is then owed at half the regular rate for each overtime hour if straight time has already been paid for all hours, or at 1.5 times the regular rate if it hasn't. When an employee works two jobs at different rates, the default is a weighted average of both. A bonus earned over a quarter must be spread across the weeks it covers, and extra overtime paid for any week where the employee worked more than 40 hours.
The DOL's 2019 rule clarified that many perks, such as wellness programs, tuition benefits, and certain sign-on bonuses, can be excluded, but promised bonuses for attendance, quality, productivity, or retention are included.
Regular rate of pay example
A medical assistant works two roles: 30 hours at the front desk at $18 and 15 hours in a clinical role at $22, for 45 hours.
| Front desk, 30 hours at $18 | $540.00 |
|---|---|
| Clinical, 15 hours at $22 | $330.00 |
| Regular rate, $870 divided by 45 | $19.33 |
| Overtime premium, 5 hours at $9.67 | $48.33 |
| Total pay for the week | $918.33 |
Paying overtime at the lower $18 rate would short the employee. Paying at $22 would overpay unless agreed in advance under a specific exception.
Why regular rate of pay matters for employers
The regular rate is where most well-intentioned employers trip on overtime. Base-rate overtime looks right on the stub, but every time a bonus, differential, or commission is left out, the employee is underpaid. Class actions over regular rate errors are common in health care, logistics, and retail because small per-check gaps add up across thousands of employees.
In fiscal year 2025, the Wage and Hour Division recovered more than $259 million for nearly 177,000 workers (US Department of Labor, Wage and Hour Division FY2025 results). Payroll and time systems that store pay codes as "include in regular rate" or "exclude" make the calculation automatic. If yours doesn't, it's worth replacing.
Common regular rate of pay mistakes to avoid
Using the base rate for overtime
Overtime must reflect all includable pay for the week.
Treating promised bonuses as discretionary
If employees know about the bonus in advance or it's tied to criteria, it isn't discretionary.
Ignoring quarterly or annual bonuses
These must be allocated to the weeks earned and overtime trued up.
Counting PTO hours as hours worked
Paid time off isn't hours worked for overtime purposes under the FLSA, though some states and contracts differ.
Regular rate of pay: questions people also ask
How is the regular rate of pay calculated?
Is the regular rate the same as the hourly rate?
Do bonuses affect overtime pay?
What payments are excluded from the regular rate?
Do states have different regular rate rules?
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HRTally glossary entries are written by people who have run US payroll, benefits, and HR operations, then checked line by line against primary sources such as the IRS, Department of Labor, EEOC, and Bureau of Labor Statistics. Dollar limits and rates are for 2026 unless stated. We review every entry at least twice a year and whenever a rule changes. This page explains general rules and isn't legal or tax advice; state law can differ. Read our editorial standards.
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<blockquote>The regular rate of pay is the hourly rate the FLSA uses to calculate overtime, found by dividing an employee's total pay for a workweek, minus specific exclusions, by total hours worked. It often differs from the base hourly rate because it includes shift premiums, nondiscretionary bonuses, and commissions.</blockquote><p>Source: <a href="https://www.hrtally.com/hr-glossary/regular-rate-of-pay/">HRTally HR Glossary, Regular rate of pay</a></p>
Written by the HRTally Research Team
Our guides are written and reviewed by people with hands-on US HR, payroll, and HR technology experience. Legal and tax facts are checked against primary sources, such as the Department of Labor, IRS, EEOC, and USCIS, and linked at the end of each guide. Vendors never review or pay for our editorial content.