What the two words mean
The Fair Labor Standards Act (FLSA) requires covered employers to pay overtime. The US Department of Labor's Fact Sheet #23 states the rule: employees who are not exempt must be paid for hours worked in excess of 40 in a workweek at a rate not less than time and one-half their regular rates of pay. Those employees are non-exempt. Employees who meet every test for one of the law's exemptions are exempt: the overtime rule does not apply to them, and they are paid the same salary whatever the hours.
The workweek in that rule is a fixed and regularly recurring period of 168 hours, seven consecutive 24-hour periods. It does not have to match the calendar week, but it cannot be averaged across weeks: 30 hours one week and 50 the next means 10 hours of overtime. The Act sets no limit on how many hours an employee aged 16 or older may work in a week; it only sets the price of the hours beyond 40.
The three tests for the common exemptions
The exemptions most people mean when they say "exempt" are the executive, administrative and professional ones in Fact Sheet #17A. Each has three parts, and all three must be met:
- Salary basis. The employee is paid a predetermined salary that does not go up and down with the quantity or quality of work.
- Salary level. The salary is at least $684 per week, which the Department's salary levels page gives as equivalent to $35,568 a year.
- Duties. The employee's primary duty matches the exemption. For the executive exemption, managing the enterprise or a recognised department and customarily directing the work of at least two full-time employees. For the administrative exemption, office or non-manual work directly related to the management or general business operations of the employer or its customers, exercising discretion and independent judgment on significant matters. For the professional exemption, work requiring advanced knowledge; for the creative professional, work requiring invention, imagination, originality or talent.
Fact Sheet #17A is blunt on the point people most often get wrong: job titles do not determine exempt status. A "manager" who manages nobody and an "analyst" who follows a script are tested on what they do, not on the badge. Computer employees and outside sales employees have their own tests in the same fact sheet.
Highly compensated employees
For employees with total annual compensation of $107,432 or more, including at least $684 a week on a salary or fee basis, the duties test is shorter: the employee must customarily and regularly perform at least one of the duties of an exempt executive, administrative or professional employee. High pay alone is still not enough.
Salaried does not mean exempt
The most common misunderstanding is that a salary ends the question. It does not. A salaried employee who earns less than $684 a week, or whose duties fail the test, is non-exempt and is owed overtime, and the salary has to be turned into an hourly regular rate to compute it. Fact Sheet #23 shows the method with its example of a $405 weekly salary for a 45-hour week: the regular rate is the total pay divided by the total hours actually worked, $9.00, and because the salary already covers straight time for all 45 hours, each of the 5 overtime hours earns an additional half of that rate, $4.50, for a total of $427.50.
The table applies that method to several weekly salaries and workweeks. The $684 row is the salary level itself: at that pay an employee can be exempt only if the duties test is also met, and if it is not, the overtime in the table is owed. The arrangement in the example is one where the salary is understood to cover all hours worked; where a salary is agreed for 40 hours only, the overtime hours are paid at the full one and one-half rate instead, and the amounts are higher.
| Weekly salary | 45 hours: regular rate | 50 hours: regular rate | 55 hours: regular rate | 45 hours: total pay | 50 hours: total pay | 55 hours: total pay |
|---|---|---|---|---|---|---|
| $405 (DOL example) | $9.00 | $8.10 | $7.36 | $427.50 | $445.50 | $460.23 |
| $600 | $13.33 | $12.00 | $10.91 | $633.33 | $660.00 | $681.82 |
| $684 (salary level) | $15.20 | $13.68 | $12.44 | $722.00 | $752.40 | $777.27 |
| $800 | $17.78 | $16.00 | $14.55 | $844.44 | $880.00 | $909.09 |
| $1,000 | $22.22 | $20.00 | $18.18 | $1,055.56 | $1,100.00 | $1,136.36 |
| $1,200 | $26.67 | $24.00 | $21.82 | $1,266.67 | $1,320.00 | $1,363.64 |
For hourly employees the arithmetic is direct: 40 hours at the wage, the rest at one and one-half times it. The overtime pay calculator handles both cases, including bonuses and shift differentials that raise the regular rate.
| Hourly wage | 45-hour week | 50-hour week |
|---|---|---|
| $15.00 | $712.50 | $825.00 |
| $20.00 | $950.00 | $1,100.00 |
| $25.00 | $1,187.50 | $1,375.00 |
| $30.00 | $1,425.00 | $1,650.00 |
What the federal rule does not do
- No premium for weekends or holidays as such. Fact Sheet #23: the Act does not require overtime pay for work on Saturdays, Sundays, holidays or regular days of rest, unless those hours push the week past 40.
- No daily overtime. The federal threshold is 40 hours in the workweek; a 12-hour day in a 36-hour week earns no federal overtime.
- No cap on hours for employees 16 and older.
States can go further, and some do. California's Labor Commissioner lists overtime at one and one-half times the regular rate for hours over eight in a workday and over 40 in a workweek, and for the first eight hours on the seventh consecutive day of work, with double time beyond twelve hours in a day. Where state and federal rules differ, the employee gets the more protective one.
What it means on the paycheck
For an exempt employee, the salary is the pay: a 55-hour week and a 38-hour week produce the same gross, and the salary converter turns that salary into an hourly figure only in the loose sense of salary divided by hours. For a non-exempt employee, the hours drive the gross, which is why a time card matters; the hours calculator adds up a week from clock-in and clock-out times. Either way the paycheck calculator takes the gross for the period to the take-home amount after withholding.
If you think you are misclassified
Start with the three tests: is the pay a true salary, is it at least $684 a week, and does the actual work match one of the duties descriptions? If any answer is no, the overtime rule applies. The Department of Labor's Wage and Hour Division handles questions and complaints about unpaid overtime; the Department's fact sheets are the documents it applies. This guide explains the federal rules as the Department publishes them and is not legal advice; state law, union contracts and specific industries can change the answer.
Frequently asked questions
What is the difference between exempt and non-exempt?
Non-exempt employees are covered by the overtime rule of the Fair Labor Standards Act: they must be paid at least one and one-half times their regular rate for hours over 40 in a workweek. Exempt employees are excluded from that rule because they meet all of the Department of Labor's tests for one of the exemptions, most commonly the executive, administrative and professional ones, which combine a salary basis, a salary level and a duties test.
What is the salary threshold for exempt employees in 2026?
The Department of Labor's salary levels page lists the standard salary level as $684 per week, equivalent to $35,568 a year, paid on a salary or fee basis. Highly compensated employees are tested at $107,432 a year, including at least $684 a week on a salary basis. Earning at least that much does not by itself make someone exempt; the duties test must be met as well.
Can a salaried employee get overtime?
Yes. Salary is only one of the tests. A salaried employee whose pay is under $684 a week, or whose duties do not meet an exemption, is non-exempt and is owed overtime. The Department of Labor's Fact Sheet #23 shows how to compute it: the regular rate is the week's total pay divided by the hours actually worked, and each hour over 40 earns an additional half of that rate, because the salary already paid straight time for all hours in its example.
Does my job title make me exempt?
No. The Department of Labor states that job titles do not determine exempt status. What counts is the actual work: for the executive exemption, managing the enterprise or a department and directing at least two full-time employees; for the administrative exemption, office or non-manual work directly related to management or general business operations that involves discretion and independent judgment; for the professional exemption, work requiring advanced knowledge, or invention, imagination, originality or talent in a creative field.
Do I get overtime for working on a weekend or a holiday?
Not under federal law by itself. Fact Sheet #23 says the FLSA does not require overtime pay for work on Saturdays, Sundays, holidays or regular days of rest as such; overtime is owed only for hours over 40 in the workweek, whichever days they fall on. State law can add to this. California, for example, requires overtime after eight hours in a day.
Sources
- US Department of Labor, Wage and Hour Division: Earnings thresholds for the executive, administrative and professional exemption ($684 per week, equivalent to $35,568 a year; $107,432 for highly compensated employees)
- US Department of Labor, Fact Sheet #17A: Exemption for executive, administrative, professional, computer and outside sales employees under the FLSA (the salary and duties tests, job titles do not determine exempt status)
- US Department of Labor, Fact Sheet #23: Overtime pay requirements of the FLSA (time and one-half over 40 hours, the 168-hour workweek, no overtime for weekends or holidays as such, no limit on hours for employees 16 and older, the $405 salary example)
- US Department of Labor, Wage and Hour Division: Overtime pay (overview page)
- State of California, Labor Commissioner's Office: Overtime FAQ (daily overtime after eight hours, double time after twelve)