Regular rate of pay and overtime

Overtime is 1.5 times the regular rate, and the regular rate can be higher than your hourly wage. How bonuses and differentials change it.

Last reviewed September 23, 2026 by Time Card Calculator Tool

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Time and a half is 1.5 times the regular rate of pay, and for many hourly workers the regular rate is not the number on the offer letter. When extra pay is tied to the work itself, it raises the regular rate, and overtime has to be calculated on the higher figure. Leaving it out is one of the most common overtime errors, and it is easy to miss on a pay stub.

What goes into the regular rate

Under 29 CFR 778.108 and the sections that follow, the regular rate includes all pay for employment except a short list of exclusions. In practice, the items that usually have to be included are:

• Hourly wages for all hours worked.
• Shift differentials for nights, weekends or hazardous work.
• Non-discretionary bonuses: bonuses announced in advance or tied to attendance, production, quality, safety or retention.
• Commissions.
• Piece-rate earnings.
• On-call pay and similar payments for being available to work.

What is left out

• Truly discretionary bonuses, where both the fact and amount are decided at the employer's sole discretion near the end of the period, with no prior promise.
• Gifts, such as a holiday bonus not tied to hours or production.
• Pay for time not worked: vacation, holiday, sick leave.
• Reimbursed business expenses.
• Premium pay already paid at 1.5x or more for overtime, weekend or holiday work under certain conditions.

How to calculate it

1. Add all includable pay for the workweek: hourly wages for every hour worked at the straight rate, plus differentials and non-discretionary bonuses.
2. Divide by total hours worked that week. That is the regular rate.
3. Each overtime hour is already paid at straight time in step 1, so the extra owed is 0.5 × regular rate × overtime hours.

Example: production bonus

A worker earns $20 an hour, works 50 hours, and receives a $100 weekly production bonus. Straight time pay is 50 × $20 = $1,000, plus the $100 bonus, for $1,100. The regular rate is $1,100 ÷ 50 = $22. The overtime premium is 0.5 × $22 × 10 = $110. Total pay is $1,210. Paying overtime on the $20 wage alone would give $1,000 + $100 + $100 = $1,200, which is $10 short.

Example: night differential

A worker earns $18 an hour plus a $2 differential for night hours. In a 45 hour week, 20 hours are nights. Straight time pay is 45 × $18 + 20 × $2 = $850. The regular rate is $850 ÷ 45 = $18.89. The overtime premium is 0.5 × $18.89 × 5 = $47.22, for total pay of $897.22.

Bonuses paid monthly or quarterly

When a non-discretionary bonus covers several weeks, it has to be spread back over the workweeks it was earned in, and any week with overtime gets a retroactive overtime adjustment. Payroll systems usually show this as a separate "bonus OT" or "true-up" line on a later pay stub. If you worked overtime in a quarter and received a quarterly bonus with no such line, ask payroll how the bonus was handled.

Using the calculators with a regular rate

The overtime calculator and the time card calculator multiply a single hourly rate by 1.5. To use them when bonuses or differentials apply, work out the regular rate first with the steps above and enter it as the hourly rate. The overtime pay shown will then be correct, and the regular pay line will include the bonus spread across the hours.