How do I Calculate My Hourly Rate of Pay if I am Paid a Salary?

This question arises in the context of a salaried employee who is not paid overtime wages or is not allowed to take 30-minute, off-duty meal periods.

Many California employees have been mis-classified as exempt from overtime, when in reality they are non-exempt by law and should be receiving overtime wages and lunch breaks. Contact us for a free evaluation of whether you are non-exempt or exempt.

The fact is that many employers (not to mention employees) believe that if they are paid a salary, they are “exempt” from the overtime and meal period rules. This is not necessarily the case. Only a few types of salaried employees are indeed exempt.

As for the question above, the most straightforward way to do so (and the way that is supported by California law) is to take your yearly salary and divide it by 2080. So, if you are paid $55,000 per year, then you divide $55,000 by 2080 to get your hourly rate of $26.44.

However, there may be some additional factors that could increase your hourly rate. The most common is if you are to receive performance-based bonuses. Say, for example, that you are paid $55,000 per year, but you are set to receive a bonus of $10,000 if you meet a performance goal. If you meet that goal and are paid the $10,000, then your yearly salary for the purposes of calculating your regular rate of pay is $65,000. Now, divide that by 2080 and you get a regular rate of $31.25.

For an exact calculation of your hourly rate, contact us now for a free evaluation.

Back to FAQs