What is Overtime Pay?
The premium rate - usually time-and-a-half - for hours worked beyond the standard workweek.
Overtime Pay: definition
The Fair Labor Standards Act (FLSA) requires overtime at one and a half times the regular rate for non-exempt employees who work more than 40 hours in a workweek. Whether an employee is exempt depends on their salary level and duties, not just their title. Some states have stricter rules, such as daily overtime after 8 hours. The regular rate used for overtime includes not just base pay but certain bonuses and commissions.
- Federal overtime: 1.5x the regular rate for hours over 40 per week
- Applies to non-exempt employees; exemption depends on salary and duties
- Some states add daily overtime or double-time rules
- The regular rate can include non-discretionary bonuses and commissions
How Fintra handles it
Fintra payroll calculates overtime at the correct premium based on hours and the regular rate, applies the applicable federal or state rules, and posts the resulting wages to the ledger. Because time and pay run on one model, overtime is computed on the true regular rate - including qualifying bonuses - rather than base pay alone.
- Overtime computed at the correct premium on the true regular rate
- Federal and state overtime rules applied by employee location
- Overtime wages posted to the ledger with regular pay
Worked example
Frequently asked questions
Who is entitled to overtime pay?
Non-exempt employees are entitled to overtime under the FLSA. Whether someone is exempt depends on meeting salary and duties tests - for example, certain executive, administrative, and professional roles paid above a threshold. Job title alone does not determine exemption; the actual duties and pay do.
How is overtime pay calculated?
At a minimum, 1.5 times the regular rate for hours worked over 40 in a workweek. The regular rate is not just base hourly pay - it can include non-discretionary bonuses and commissions, which raise the overtime rate. Some states require daily overtime or double time.
What is the difference between exempt and non-exempt employees?
Non-exempt employees must receive overtime for hours over 40 a week; exempt employees do not. Exemption requires meeting both a salary threshold and specific duties tests. Misclassifying non-exempt workers as exempt to avoid overtime is a common and costly compliance error.
Do salaried employees get overtime?
Some do. Being salaried does not automatically make someone exempt - a salaried employee who does not meet the duties and salary-level tests is non-exempt and owed overtime. Exemption depends on the FLSA criteria, not on whether pay is salaried or hourly.
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