Overtime math when you're salaried but not exempt

"Salaried" is how you are paid. "Exempt" is whether the overtime rules apply. They are not the same thing.

The two tests, and why both matter

Under the federal Fair Labor Standards Act (FLSA), an employee is exempt from overtime only if the job passes both of these:

1. The salary-level test. The federal floor is $684 per week ($35,568 a year). The Department of Labor raised it in 2024, but a federal court vacated that rule in November 2024, so $684 is the figure in force. States can set a higher floor.
2. The duties test. The work itself has to be executive, administrative, professional or another listed category, as the regulations define them.

Pass the salary test and fail the duties test, and you are non-exempt. Your salary is still a salary, but every hour you work past 40 in a workweek earns overtime at one and a half times your regular rate.

Step one: find the regular rate

Payroll cannot pay "time and a half" until it knows what "time" is. For a salaried non-exempt employee, the regular rate comes from dividing the weekly salary by the hours the salary is meant to cover.

Take the Example Co. stub. The salary is $1,120 a week and the offer letter says it covers a 40-hour week:

• $1,120.00 ÷ 40 hours = $28.00 regular rate
• $28.00 × 1.5 = $42.00 per overtime hour

A semimonthly salary is converted to weekly by multiplying by 24 and dividing by 52; a monthly one by 12 and 52.

Nondiscretionary bonuses also count toward the regular rate, which is why a bonus can trigger a later overtime adjustment.

Step two: count by workweek, not by pay period

This is where most stub errors live. Overtime under the FLSA is measured over a fixed workweek of seven consecutive days. It is not averaged across a two-week pay period.

Week	Hours worked	Regular hours	Overtime hours
Week 1	44	40	4
Week 2	36	36	0
Pay period	80	76 + salary	4

Eighty hours looks like a normal period. The 4 hours over 40 in week 1 are owed at $42.00, which is the $168.00 overtime line on the stub. A short week 2 does not cancel a long week 1.

Daily overtime

Federal law has no daily overtime. Some states do. California, for one, requires overtime for hours worked past 8 in a workday, in addition to the weekly rule. If your state has a daily rule, a 10-hour Tuesday produces overtime even in a 40-hour week.

Step three: the fluctuating-workweek exception

There is a second, lawful way to pay a salaried non-exempt employee, and it produces a much smaller overtime line. Under the federal fluctuating-workweek method, the salary is understood to cover all hours worked in the week, whatever that number turns out to be. Because the salary already paid straight time for every hour, overtime is only the half-time premium.

Using the same $1,120 salary and a 44-hour week:

• Regular rate: $1,120.00 ÷ 44 = $25.45
• Half-time premium: $25.45 × 0.5 = $12.73 per overtime hour
• Overtime owed: 4 × $12.73 = $50.91

Conditions apply: hours must genuinely fluctuate, the full salary is paid even in short weeks, the regular rate never falls below minimum wage, and both sides understand the arrangement up front. Several states restrict it. If your stub shows a half-time overtime rate, ask HR which method is in use and where it is written down.

What to check on your own stub

• Is there an overtime line at all? If you are non-exempt, routinely work past 40 and the line never appears, ask why.
• Does the rate match? Divide your weekly salary by the hours it covers, multiply by 1.5. Compare to the rate printed.
• Are hours split by week? A stub that shows only a pay-period total hides which week the overtime belongs to. Your timesheet should show it.

Tax on the overtime line

Overtime is ordinary wages. It is subject to Social Security at 6.2% and Medicare at 1.45%, and federal income tax is withheld on it the same way as regular pay, using the tables in IRS Publication 15-T. A separate federal income-tax deduction for part of qualified overtime pay was created for tax years 2025 through 2028; it is claimed on your return, not taken out of withholding, and it does not reduce Social Security or Medicare. Check current IRS guidance for whether and how it applies to you.

For the full map of where this line sits, see every line on a pay stub, and for what a pay change does after tax, raise math.