Overtime Exemption Calculator
Exemption Status
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Weekly Salary
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OT Hours (if non-exempt)
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Weekly OT Pay (if non-exempt)
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How FLSA Overtime Exemption Works
Overtime exemption determines whether an employee is entitled to overtime pay (1.5x their regular rate for hours over 40 per week) under the Fair Labor Standards Act (FLSA). According to the U.S. Department of Labor, the FLSA requires that most employees receive overtime pay, but certain categories of workers are "exempt" from this requirement. The exemption is not based on job title alone; it requires passing both a salary test and a duties test.
The Wage and Hour Division enforces these rules and recovered over $274 million in back wages for workers in fiscal year 2023, with overtime violations among the most frequent findings. An estimated 4.2 million workers were affected by the 2024-2025 salary threshold increase from $35,568 to $58,656 per year. Misclassification lawsuits are among the most common employment litigation categories, with average settlements ranging from $50,000 to several million dollars for class actions. This calculator helps both employees and employers assess whether a position likely qualifies for exemption based on salary level and duties category.
How Exemption Status Is Determined
The FLSA overtime exemption analysis follows a two-part test:
Salary Test: Annual salary >= $58,656 ($1,128/week) as of 2025
Duties Test: Primary duties must fall under a recognized exemption category
Both tests must be met for exemption (except Outside Sales, which has no salary test)
If the employee is non-exempt, the overtime owed per week is calculated as: OT Pay = (Annual Salary / 2,080) x 0.5 x Overtime Hours. The 0.5 multiplier represents the overtime premium, since the salary already compensates for all hours worked at the straight-time rate.
Worked example: An office manager earns $52,000/year and works 45 hours per week. Salary test: $52,000 < $58,656, so fails regardless of duties. Hourly rate: $52,000/2,080 = $25.00. Weekly OT premium: $25 x 0.5 x 5 = $62.50. Annual OT owed: $62.50 x 52 = $3,250. Use our overtime calculator to compute the full pay breakdown.
Key Terms You Should Know
Salary Basis Test: The employee must receive a predetermined, fixed amount of pay each pay period that is not subject to reduction based on the quality or quantity of work. Deductions for partial-day absences generally violate the salary basis test.
Primary Duty: The principal, main, or most important duty of the position. An employee who spends 60% of their time on exempt duties and 40% on non-exempt duties may still qualify if the exempt duties are the primary duty. The federal test does not require a strict percentage threshold.
Discretion and Independent Judgment: A key element of the administrative exemption. The employee must have authority to make decisions of significance regarding matters that affect the business, not merely following established procedures or making routine choices.
Highly Compensated Employee (HCE): Workers earning $151,164 or more per year who perform at least one exempt duty qualify for a streamlined exemption test. The full duties test is relaxed for highly compensated workers.
White-Collar Exemptions: The collective term for the executive, administrative, professional, computer, and outside sales exemptions, which are the most commonly applied FLSA overtime exemptions.
State Overtime Exemption Thresholds (2025)
Several states set higher salary thresholds than the federal level. Employers must comply with whichever threshold is higher. Source: state labor department websites as of early 2025.
| Jurisdiction | Annual Salary Threshold | Weekly Threshold | Notes |
|---|---|---|---|
| Federal (FLSA) | $58,656 | $1,128 | Phased increase effective 2025 |
| California | ~$66,560 | ~$1,280 | 2x minimum wage; varies by employer size |
| New York City | $62,400 | $1,200 | Higher than rest of NY state |
| Washington | ~$67,725 | ~$1,302 | 2x minimum wage |
| Colorado | $55,000 | $1,057 | Lower than federal; federal applies |
| Most other states | $58,656 (federal) | $1,128 | Follow federal threshold |
Practical Examples
Example 1 -- Marketing coordinator at $50,000: Salary: $50,000 (below $58,656 threshold). Even though the role involves administrative duties, the employee fails the salary test and is non-exempt. Working 45 hours/week, the OT premium owed is ($50,000/2,080) x 0.5 x 5 = $60.10/week, or $3,125 per year. Use the salary calculator to convert between annual and hourly rates.
Example 2 -- IT manager at $75,000: Salary: $75,000 (above threshold). Duties: manages a team of 4 developers, has authority to hire and fire. Passes both salary and executive duties tests. Likely exempt from overtime. However, if the "manager" title is nominal and the person spends 80% of time coding, the duties test may fail. The overtime calculator shows what OT would be owed if non-exempt.
Example 3 -- Outside sales representative at $45,000: Even though the salary is well below the threshold, outside sales employees are exempt regardless of salary. The key requirement is that the employee's primary duty is making sales or obtaining orders while regularly working away from the employer's place of business. No salary test applies.
Tips and Strategies
- Do not rely on job titles: A "Manager" who does not supervise employees or a "Director" without decision-making authority may not meet the duties test. The Department of Labor evaluates actual job duties, not titles. Check the workers' comp calculator for related employment calculations.
- Document your actual duties: Keep a log of your daily tasks and the percentage of time spent on each. If your employer claims you are exempt based on your job description but your actual duties differ, your real-world tasks determine your status.
- Check state thresholds annually: State salary thresholds often change with minimum wage increases. California and Washington tie their thresholds to twice the state minimum wage, so they increase automatically each year.
- Understand the salary basis requirement: If your employer docks your pay for partial-day absences or reduces your salary based on work quantity, you may not be on a true salary basis, which could invalidate the exemption.
- File a complaint within the statute of limitations: The FLSA allows recovery of back overtime for 2 years (3 years for willful violations). Do not wait to raise concerns. The Department of Labor and most employment attorneys handle initial consultations confidentially.
- Consider the total compensation picture: If you are borderline exempt/non-exempt, factor in benefits, job stability, and advancement opportunities alongside overtime eligibility when evaluating job offers. The budget calculator can help plan around variable income.
Frequently Asked Questions
What is the current FLSA salary threshold for overtime exemption?
As of 2025, employees must earn at least $58,656 per year ($1,128 per week) on a salary basis to potentially qualify for the white-collar overtime exemptions under federal law. This threshold was raised from the previous $35,568 level through a phased increase by the Department of Labor. The threshold for Highly Compensated Employees (HCE) is $151,164 per year. These thresholds are reviewed and updated periodically. Meeting the salary threshold alone does not make an employee exempt; they must also pass the applicable duties test for their exemption category.
Can salaried employees receive overtime pay?
Yes, being paid a salary does not automatically mean an employee is exempt from overtime. To be classified as exempt, the employee must meet three requirements: be paid on a salary basis (not subject to reduction based on quality or quantity of work), earn at least the FLSA salary threshold of $58,656 per year, and perform duties that qualify under one of the recognized exemption categories. The Department of Labor estimates that millions of salaried workers are non-exempt and entitled to overtime pay. Common examples include salaried administrative assistants, bookkeepers, and team leads who earn below the threshold or whose duties do not meet the exemption tests.
What happens if my employer misclassifies me as exempt?
If you are misclassified as exempt from overtime, you may be entitled to recover back overtime pay for up to two years (three years for willful violations). Under the FLSA, employers who misclassify workers may also owe liquidated damages equal to the amount of unpaid overtime (effectively doubling the back pay), plus the employee's attorney fees and court costs. The Department of Labor recovered over $274 million in back wages for workers in fiscal year 2023, with overtime violations being one of the most common findings. You can file a complaint with the Wage and Hour Division of the Department of Labor or pursue a private lawsuit.
Do state laws affect overtime exemption status?
Yes, many states have overtime exemption rules that are stricter than federal law, and employers must follow whichever standard is more favorable to the employee. California requires exempt employees to earn at least twice the state minimum wage for full-time work, which in 2025 equates to approximately $66,560 per year. New York City's threshold is $62,400. Washington state sets its threshold at 2 times the minimum wage, and Colorado has its own salary tests. Some states like California also apply stricter duties tests, requiring that the employee spend more than 50% of their work time on exempt duties. Always check your specific state's labor department for the applicable thresholds.
What are the different types of FLSA overtime exemptions?
The FLSA recognizes several white-collar exemption categories. The Executive exemption requires managing a department or subdivision, regularly directing the work of at least two full-time employees, and having authority to hire or fire. The Administrative exemption requires office or non-manual work directly related to management or business operations, with the exercise of independent judgment on significant matters. The Professional exemption covers work requiring advanced knowledge in a field of science or learning, typically requiring a specialized degree. The Computer Professional exemption applies to systems analysts, programmers, and software engineers earning at least $27.63 per hour. The Outside Sales exemption covers employees who regularly work away from the employer's premises making sales, with no salary threshold requirement.
How much overtime pay could I be owed if misclassified?
The amount of overtime pay owed depends on your hourly equivalent rate, the number of overtime hours worked each week, and how long the misclassification has been in effect. To calculate: divide your annual salary by 2,080 (52 weeks x 40 hours) to find your hourly rate. Multiply that rate by 0.5 (the overtime premium) and then by your weekly overtime hours. For example, an employee earning $55,000 annually who works 45 hours per week has an hourly rate of $26.44. The overtime premium owed is $26.44 x 0.5 x 5 hours = $66.10 per week, or $3,437 per year. Over a two-year lookback period, that totals $6,874, potentially doubled to $13,748 with liquidated damages.