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Index/Topics/Nondiscretionary Bonuses

Nondiscretionary Bonuses

Bonuses that are guaranteed to employees and must be included in the calculation of the regular hourly rate for overtime pay purposes.

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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...