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Fluctuating Workweek Method

A method of calculating overtime pay for salaried nonexempt employees who work fluctuating hours, which involves treating the salary as straight time for all hours worked and paying an additional half of the employee's average hourly rate for overtime hours.

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Jan 6, 2026
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How do payroll systems calculate overtime for salaried nonexempt employees versus hourly workers?

Payroll systems compute overtime for nonexempt employees by first establishing a regular hourly rate and then applying the statutory premium—typically time-and-one-half—to any hours over 40 in a workw...