Straight Time Pay: What It Means for Employers

What it means in practice

Straight time pay answers a simple payroll question: what would this employee have earned for the week if every hour were paid at the ordinary rate, with no overtime premium at all? The Fair Labor Standards Act (FLSA) regulations use the phrase throughout without a separate definition. The recordkeeping rule describes straight-time earnings as wages due "for hours worked during the workday or workweek, exclusive of premium overtime compensation," and says the overtime premium "excludes the straight-time earnings for overtime hours" (29 CFR 516.2(a)(8) and (9)). So straight time pay covers overtime hours too, at the plain rate; only the extra half is the premium. The count of hours below the 40-hour line is a separate idea, explained in our entry on regular time.

Where the term is defined outright. For federal employees covered by Office of Personnel Management rules, the regulation does define it: the "straight time rate of pay" is the employee's rate of pay for the position, exclusive of premiums, differentials, cash awards or bonuses, and overtime entitlement is the straight time rate times all overtime hours plus one-half the regular rate times those hours (5 CFR 551.512). Private employers follow 29 CFR Part 778, which reaches the same two-part result through the regular rate.

Straight time pay, base rate and regular rate. These are three different numbers. The base rate is the agreed hourly, piece, day or salary rate. Straight time pay is the week's total at that rate plus other non-overtime pay for hours worked. The regular rate is that total, minus statutory exclusions, divided by all hours actually worked; it is an hourly rate whatever the pay basis and cannot be set by agreement (29 CFR 778.108 and 778.109). Extra premiums such as night-shift differentials and pay for hazardous or dirty work must be included in the regular rate (29 CFR 778.207(b)), and the fluctuating workweek examples treat a night premium as part of "total straight time earnings" (29 CFR 778.114(b)(2)). See shift differential.

How the overtime premium is built on straight time. For covered, non-exempt employees, overtime must be paid at not less than one and one-half times the regular rate for hours over 40 in a workweek (29 CFR 778.107). Payroll can show this as two pieces: straight time pay for every hour worked, plus a premium of one-half the regular rate for each hour over 40. The regulations use exactly this method for hourly workers and say that for pieceworkers "only additional half-time pay is required" where straight-time compensation has already been paid for all hours (29 CFR 778.110 and 778.111). The IRS uses the same split: for most employees the premium for a workweek is FLSA hours over 40, times one-half, times the FLSA regular rate (IRS FS-2026-13, Q12).

Step by step for an employer. Confirm the employee is non-exempt (see exempt vs. non-exempt); fix the workweek; total all hours worked; add up straight time pay from every rate, differential and non-excluded bonus; divide by total hours to get the regular rate; check it is at least the minimum wage; then add one-half of it for each hour over 40. Each workweek stands alone, for pieceworkers and commission employees as well (29 CFR 778.104).

Piece rates. A pieceworker's straight time pay is the week's piece-rate earnings plus all other sources, such as production bonuses and pay for waiting time or other hours worked, and that total divided by all hours is the regular rate (29 CFR 778.111(a)). If a minimum hourly guaranty is higher than piece earnings in a week, the guaranty is the regular rate that week (29 CFR 778.111(b)). As an alternative, an employee and employer may agree in advance that pieces produced in overtime hours are paid at not less than one and one-half times a bona fide piece rate, meaning the rate actually paid in nonovertime hours and enough to yield at least the minimum wage (29 CFR 778.418).

Day rates and job rates. When an employee is paid a flat sum for a day's work or a particular job regardless of hours, and receives nothing else, the regular rate is the total of the day or job rates for the week divided by the hours actually worked, and the employee is owed "extra half-time pay at this rate" for hours over 40 (29 CFR 778.112). A flat day rate is therefore straight time pay only; it does not include any overtime.

Salaried non-exempt employees. For a weekly salary, the regular rate is the salary divided by the hours the salary is intended to compensate. The regulation's example is a $350 salary for a 35-hour week, a $10 regular rate, with $10 owed for each of the first 40 hours and $15 for each hour after; a $375 salary for 40 hours gives $9.38 (29 CFR 778.113(a)). Monthly pay is multiplied by 12 and divided by 52, and semimonthly pay by 24 and 52, so $1,560 a month or $780 semimonthly for 40 hours a week is $9 an hour (29 CFR 778.113(b)). Applying that example to a 44-hour week, straight time pay is 44 x $10 = $440 and the premium is 4 x $5 = $20, for $460. A fixed salary for a regular workweek longer than 40 hours does not cover overtime by itself (DOL Fact Sheet #23). See salaried non-exempt and salaried employee.

Fluctuating workweek. If hours vary week to week, the fixed salary does not change with hours, it covers at least the minimum wage in the longest weeks, both sides clearly understand it covers all hours worked, and overtime is paid on top, the employer may pay one-half the regular rate for overtime hours because those hours "have already been compensated at the straight time rate" by the salary and other non-excludable pay (29 CFR 778.114(a)). The method cannot be relied on where the facts show overtime hours are paid at no more than nonovertime hours (29 CFR 778.114(c)).

Two or more rates in one week. When an employee works at different nonovertime rates in one workweek, straight time pay is the total from all rates and the regular rate is the weighted average: total earnings divided by total hours at all jobs (29 CFR 778.115; DOL Fact Sheet #23). As a Remindax illustration with assumed numbers: 30 hours at $16 and 15 hours at $22 is $480 + $330 = $810 of straight time pay for 45 hours, a regular rate of $18. The 5 overtime hours add 5 x $9 = $45, for $855. Section 7(g)(2) agreements made in advance can instead base overtime on the rate for the work done in overtime hours (29 CFR 778.419).

The minimum wage floor. The federal minimum wage is $7.25 per hour, effective July 24, 2009, and where a state sets a higher rate employers must comply with both (DOL minimum wage page; see minimum wage). The regular rate may in no event be less than the statutory minimum (29 CFR 778.107), a piece rate must yield at least the minimum wage per hour, and a salary must meet the minimum wage requirement (DOL Handy Reference Guide).

Paid leave measured in straight time. Many leave policies pay "usual straight-time earnings." In the regulation's example, a $12-an-hour employee who forgoes a paid vacation worth $576 and works 50 hours is owed $600 straight time pay, the $576, and a $60 premium; the vacation pay does not raise the regular rate and cannot be credited toward overtime (29 CFR 778.219). See paid time off (PTO).

Straight time and taxes. The IRS describes the overtime deduction for tax years 2025 through 2028 as covering pay "that exceeds their regular rate of pay," such as the "half" portion of time and one-half. Its FS-2026-13 example is a $20-an-hour employee paid double time for 10 overtime hours: the FLSA required $200 of straight time compensation plus a $100 premium, so only $100 is qualified overtime compensation (Q16). The 2026 W-2 instructions say only the "half" portion is reported with code TT. For withholding, Publication 15 (2026) lists overtime pay among supplemental wages but lets employers treat it as regular wages, and overtime remains subject to Social Security and Medicare taxes.

Where states differ. State rules can change how straight time pay is computed. As one example, the California Department of Industrial Relations overtime FAQ tells employers to find a salaried non-exempt employee's regular rate by dividing the weekly salary "by the number of legal maximum regular hours (40)," rather than the federal method of dividing by the hours the salary is intended to cover. California also has a separate piece-rate rule: the DIR says Labor Code 226.2, effective January 1, 2016, set pay requirements for piece-rate workers' rest and recovery periods and other nonproductive time, with related pay stub requirements. Other states differ; DOL lists state minimum wage laws and state labor offices.

Recordkeeping. For each non-exempt employee, keep the regular hourly rate for overtime weeks and the basis of pay (per hour, day, week, piece or commission), plus any payments excluded from the regular rate; hours each workday and workweek; total straight-time earnings; and total overtime premium (29 CFR 516.2(a)(6) to (9)). Payroll records are kept at least 3 years, and time cards and the wage rate tables "used in computing straight-time earnings" at least 2 years (29 CFR 516.5 and 516.6).

Questions employers ask. Is straight time pay the same as regular time? No; regular time is hours up to 40, while straight time pay is a dollar amount at the base rate for all hours (29 CFR 516.2(a)(8)). Do we owe straight time for hours 36 to 40 on a 35-hour salary? Yes, if the salary covers only 35 hours; overtime is not paid until all straight-time compensation due is paid (29 CFR 778.315 and 778.322). Can we lower the rate for overtime hours? No; a lower rate cannot be set just because work falls in overtime hours (29 CFR 778.316). Does a disciplinary deduction lower the regular rate? No; it is computed before the deduction (29 CFR 778.307).

Why it matters and common mistakes

How Remindax helps

Related terms

See all terms in Payroll & Compensation Basics or browse the full HR Glossary.