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What Is the Regular Rate of Pay?

Last updated June 11, 2026

The regular rate of pay is your total non-overtime (straight-time) earnings for a workweek divided by the total hours you worked that week. Under the FLSA, overtime is paid at 1.5 times this rate — not 1.5 times your base hourly wage alone, which is often a smaller number.

Most people assume their overtime is just 1.5 times the hourly number on their offer letter. That is true only when the hourly wage is the only pay you receive. The moment a bonus, a shift differential, or a commission enters the picture, federal law requires a different — usually higher — figure called the regular rate. This page explains what that rate is, what counts toward it, and how to work it out.

Why the regular rate often exceeds the base hourly wage

The Fair Labor Standards Act (FLSA) does not define the regular rate as simply "your hourly wage." It defines it as all the pay you earn for a workweek (with a few specific exclusions), divided by the hours you worked. Because the formula folds in most forms of compensation — not just the wage — the regular rate is frequently higher than the base hourly rate. Overtime is then calculated on that higher figure, so leaving extras out of the math shortchanges the worker. The base wage and the regular rate match only when there is nothing extra to fold in.

What's included vs. excluded

The included items push the regular rate above the base wage. The excluded items can be left out of the calculation entirely.

Included in the regular rate:

Excluded from the regular rate:

How to calculate it, with a worked example

The formula is straightforward:

Say an employee earns $20 an hour, works 45 hours in the week, and also earns a $50 nondiscretionary production bonus that week. Here are the steps:

  1. Straight-time pay: (45 hours × $20) + $50 bonus = $900 + $50 = $950.
  2. Regular rate: $950 ÷ 45 hours = $21.11 an hour (note this is above the $20 base wage, because the bonus is folded in).
  3. Overtime premium: the straight-time pay above already covers all 45 hours, so you add only the half-time premium for the 5 overtime hours — 0.5 × $21.11 × 5 = $52.78.
  4. Weekly gross: $950 + $52.78 = $1,002.78.

The half-time premium method used here — straight-time pay for all hours, then add 0.5 times the regular rate for the overtime hours — is the standard FLSA approach when a bonus or other extra pay is involved. It produces the same answer as paying 1.5 times the regular rate on overtime hours, but it keeps the arithmetic clean once the regular rate already reflects the bonus. You can read the federal rules directly at the U.S. Department of Labor overtime page.

The simple case: a straight hourly worker

If you are paid by the hour with no bonuses, no shift differentials, and no commissions, there is nothing extra to fold in. Your regular rate is simply your hourly wage, and overtime is the familiar 1.5 times that wage. At $20 an hour with no extras, the regular rate is $20 and overtime is $30 an hour — no division needed.

Frequently asked questions

Is the regular rate the same as my hourly wage?

Only when the hourly wage is your sole compensation for the week. If you also earn nondiscretionary bonuses, shift differentials, or commissions, the regular rate is calculated by dividing all of that straight-time pay by your hours worked, which makes it higher than the base wage.

Does a discretionary bonus raise my regular rate?

No. A bonus that is truly at the employer's discretion — not promised or expected in advance — is excluded from the regular rate. A nondiscretionary bonus, such as a promised production or attendance bonus, must be included.

Is holiday or vacation pay part of the regular rate?

No. Paid time off, holiday, and vacation pay cover hours you did not actually work, so they are excluded from the regular rate calculation along with gifts and expense reimbursements.

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