What Is Regular Rate? (2026)

Key numbers at a glance

What Regular rate means

Federal overtime is one and one-half times the "regular rate" at which an employee is employed — a defined term, not whatever rate appears on a stub. For most workers it is their hourly wage plus certain additions: nondiscretionary bonuses, shift differentials and similar earned payments must be folded in before the overtime premium is computed. For tipped workers the tip credit adds a wrinkle: because the credit merely lets tips stand in for part of the minimum wage the employer owes, the wage the overtime math rides on is the full minimum — $7.25 federally — and not the cash wage of $2.13 (per the DOL tipped employee fact sheet).

The federal arithmetic works out to a number worth memorizing: 1.5 × $7.25 = $10.88, minus the $5.12 tip credit, equals $5.76 per overtime hour in cash — plus, of course, the tips you keep during those hours. An equivalent framing: cash wage $2.13 plus half the full minimum $3.63 (rounded from $3.625) also lands at $5.76. Tips never lower this figure; they are what the credit already counted. In states with their own numbers, the same structure applies — overtime on the state's full minimum minus its credit. And overtime eligibility itself is anchored to the workweek: hours beyond 40 in a defined workweek, regardless of how the pay period is cut.

How Regular rate affects your numbers

Run a 46-hour workweek under the federal numbers — a double on Friday will do it. Straight time: 40 × $2.13 = $85.20. Overtime done right: 6 × $5.76 = $34.56. Total cash wages $119.76, plus the week's tips. Overtime done wrong — time-and-a-half on the cash wage, 6 × $3.20 = $19.20 — pays $15.36 less, every single week it happens. Over a year of Saturday doubles that difference compounds into hundreds of dollars of underpaid wages, and it is invisible unless someone recomputes the regular rate the check was built on. The overtime calculator does this for your exact week.

Nebraska is the cautionary row: a $2.13 cash wage paired with a $15.00 minimum means an employer paying time-and-a-half on $2.13 shorts every overtime hour by $6.43 — the widest gap in the country, per the DOL state tipped-wage table. Washington shows the other end: with no tip credit there is no wrong shortcut, and overtime simply pays 1.5 × $17.13 = $25.70.

Common employer mistakes. Paying 1.5 × $2.13, the classic. Averaging two workweeks to keep both under 40 hours — the regular rate protects nothing if the workweek boundary is manipulated. Leaving nondiscretionary bonuses out of the base. And paying the cash overtime rate but confiscating the overtime tips — the tips belong to the employee on overtime hours exactly as on straight-time hours. Note also that a top-up week changes nothing about the overtime base: even when the employer must make up the minimum, overtime still rides on the full minimum. When does the regular rate matter most? Any week with a double, holiday pushes, short-staffed seasons — precisely the weeks tipped employees actually work the extra hours. Check yours with the tipped overtime calculator, and see the TippedPay home page for the rest of the toolkit.