FLSA regular rate and overtime when pay includes bonuses, shift pay, commissions or two rates
Updated October 2026
Under the Fair Labor Standards Act the regular rate is not just the hourly rate. It includes all pay for employment in the week except the payments the law excludes: nondiscretionary bonuses (production, attendance, safety and other bonuses that were promised or announced), shift differentials, hazard pay, commissions (29 CFR 778.117) and pay at a second rate. DOL Fact Sheet 56A lists what is excluded: true discretionary bonuses, gifts not tied to hours or production, paid time off, expense reimbursements, certain show-up and call-back pay, benefit plan contributions, bona fide profit-sharing, and premiums already paid at time and a half for non-FLSA overtime such as weekend or holiday work.
Enter the hourly rate, every hour worked in the workweek (the FLSA uses a fixed 7-day week, not the pay period), and any bonus, shift premium or commission earned for that week. If part of the week was at a different rate, enter that rate and those hours. For a bonus decided later (monthly, quarterly or annual), enter it with the number of weeks it covers to see the extra overtime owed for this week. Results show the regular rate, the overtime premium, total pay due and the shortfall if overtime were paid on the base rate alone.
29 CFR 778.110: at $12 an hour for 46 hours, pay is 46 × $12 = $552 plus 6 overtime hours × $6 = $588. Add a $46 production bonus and straight-time pay becomes $598; $598 ÷ 46 hours = a $13 regular rate. Overtime is 6 × $6.50 = $39, for $637 in total, the same as 40 hours at $13 plus 6 hours at $19.50. The overtime premium is figured at half the regular rate because the straight-time pay for those hours is already in the $598.
| Situation | Regular rate | Total pay due | Base-rate-only overtime | Difference (or extra from the later bonus) |
|---|---|---|---|---|
| $20/hr, 48 hours, $100 weekly production bonus | $22.08 | $1,148.33 | $1,140.00 | $8.33 |
| $20/hr, 45 hours, $2,600 quarterly bonus spread over 13 weeks | $20.00 | $950.00 | $950.00 | $11.11 |
| Two jobs: 30 hours at $18 and 15 hours at $24 | $20.00 | $950.00 | $945.00 | $5.00 |
| $15/hr plus $300 commission, 50 hours | $21.00 | $1,155.00 | $1,125.00 | $30.00 |
A weekly bonus simply joins that week’s earnings. A bonus that can only be figured later may be left out of the regular rate until it is known; then, under 29 CFR 778.209, it must be apportioned back over the weeks it covers, and each overtime week owes one-half of the bonus’s hourly share times the overtime hours. Spreading a $2,600 quarterly bonus equally over 13 weeks puts $200 in each week; in a 45-hour week that adds $200 ÷ 45 = $4.44 an hour to the regular rate, so the employee is owed $11.11 more for that week (½ × $4.44 × 5 hours). If the bonus cannot be tied to particular weeks, the regulation allows equal-per-week or equal-per-hour allocation when that is reasonable.
When an employee works at two or more rates in one week, the regular rate is the weighted average: total earnings divided by total hours (29 CFR 778.115). Shift differentials work the same way. Commissions are included whatever the formula or payment schedule; a monthly commission is apportioned back to the weeks in which it was earned, like a deferred bonus. Piece-rate workers’ regular rate is total piece-work earnings plus any other pay, divided by hours worked (29 CFR 778.111).
The FLSA requires overtime only after 40 hours in a workweek, and only for non-exempt employees. Some states go further: California, for example, requires overtime after 8 hours in a day (Labor Code section 510), and its regular-rate rules differ in places, so state law can require more than this calculator shows. A bonus is discretionary, and excluded, only if both the fact and the amount are decided at the employer’s sole discretion near the end of the period, without any prior promise (29 CFR 778.211); announcing a bonus in advance makes it nondiscretionary.
Paying overtime on the base rate only when a bonus, shift premium or commission was earned. Calling a promised bonus discretionary. Averaging over a two-week pay period instead of each 7-day workweek. Forgetting to true up overtime when a quarterly or annual bonus is paid. Dividing by 40 instead of total hours for hourly employees.
It does not handle salaried non-exempt employees (fluctuating workweek), tipped employees, state daily overtime, public-sector compensatory time or the excludable items in Fact Sheet 56A. It is not legal advice. Employees who think they were underpaid can contact the U.S. Department of Labor’s Wage and Hour Division (1-866-487-9243) or their state labor agency; employers facing back-pay questions should talk with an employment lawyer.