On this page
- Current Federal Overtime Salary Threshold for 2026
- The Three Exemption Tests Under Federal Labor Law
- Federal Salary Threshold Timeline From 2004 to 2026
- The 2016 Rule That Never Took Effect
- The 2019 Rule: The Threshold in Effect Today
- The 2024 Rule and the Court Rulings
- Special Salary Rules for Certain Jobs and US Territories
- How to Handle Employees Paid Near the Threshold
- States With Higher Exempt Salary Thresholds in 2026
- What Employers Should Check Now
- Federal Overtime Salary Threshold FAQ
- Sources
Updated October 2026. Checked against the U.S. Department of Labor, the Federal Register and state labor departments. The sources are listed at the end.
Under federal labor law, most salaried employees who are exempt from overtime must earn at least $684 per week ($35,568 a year). The federal overtime salary threshold for highly compensated employees is $107,432 a year. Both levels are in effect as of October 2026.
This page started in 2016 as news about a rule that never took effect. It's now a guide to the threshold you follow today, how it got here, and what to do with employees paid close to it.
Key Takeaways
- The federal exempt salary threshold is $684 per week ($35,568 a year), and the highly compensated employee threshold is $107,432 a year.
- The 2024 rule that would have raised the threshold to $1,128 per week was vacated by a federal court on November 15, 2024, and the Department of Labor formally removed it on May 15, 2026.
- An employee is exempt from overtime only if they pass all three tests: salary basis, salary level and duties.
- Nondiscretionary bonuses and commissions paid at least once a year can cover up to 10% of the $684 level.
- California, Colorado, New York, Washington, Alaska and Maine set higher salary levels, and you must pay the higher one.
What's New for 2026
On May 15, 2026, the Department of Labor published a technical amendment in the Federal Register. It took the vacated 2024 rule out of the regulations and put the 2019 text back. The $684 and $107,432 levels stay the same, and no automatic increases are scheduled.
Current Federal Overtime Salary Threshold for 2026
These are the levels on the Department of Labor's earnings thresholds page:
| Threshold | Amount |
|---|---|
| Standard salary level (executive, administrative and professional employees) | $684 per week ($35,568 a year) |
| Highly compensated employees | $107,432 a year in total pay, including at least $684 per week as salary or fee |
| Computer employees paid by the hour | $27.63 per hour |
| Bonuses and commissions | Nondiscretionary bonuses and commissions paid at least once a year can cover up to 10% of the standard level |
The weekly amount works on any pay schedule: $1,368 every two weeks, $1,482 twice a month, or $2,964 a month.
Some states set a higher salary level. When your state's level is higher, you pay the higher amount. The state table further down lists six of them.
The Three Exemption Tests Under Federal Labor Law
Under the Fair Labor Standards Act (FLSA), nonexempt employees earn overtime at 1.5 times their regular rate for hours over 40 in a workweek. Federal law counts overtime by the workweek, so there's no federal daily overtime rule.
A salaried employee is exempt from overtime only if they pass all three of these tests:
- Salary basis: they get a set amount each pay period, paid weekly or less often, and it isn't cut because of the quality or quantity of their work.
- Salary level: that amount is at least $684 per week, or your state's higher level.
- Duties: their primary duty is exempt work, as described in the table below.
| Exemption | Primary duty in plain words |
|---|---|
| Executive | Manages the business or a department, regularly directs at least two full-time employees (or the equivalent), and has real say in hiring and firing |
| Administrative | Does office or non-manual work tied to running the business and uses discretion and independent judgment on important matters |
| Learned professional | Does work that needs advanced knowledge in a field of science or learning, usually gained through long specialized study |
| Creative professional | Does work that needs invention, imagination, originality or talent in an artistic or creative field |
| Computer employee | Works as a systems analyst, programmer, software engineer or similar, designing, building, testing or changing computer systems or programs |
The duties test is lighter for a highly compensated employee. They must earn at least $107,432 a year, mainly do office or non-manual work, and regularly perform at least one exempt duty.
WATCH OUT
"Job titles do not determine exempt status," as the Department of Labor puts it. Calling someone a manager doesn't make them exempt, and neither does paying a salary. If any one of the three tests fails, that employee is owed overtime.
Federal Salary Threshold Timeline From 2004 to 2026
| Year | Rule | Salary level | What happened |
|---|---|---|---|
| 2004 | 2004 rule | $455 per week ($23,660 a year) | Took effect August 23, 2004. Enforced until the 2019 rule replaced it on January 1, 2020. |
| 2016 | 2016 rule | $913 per week ($47,476 a year), due December 1, 2016 | Blocked by a federal court on November 22, 2016 and struck down on August 31, 2017. Never took effect. |
| 2019 | 2019 rule | $684 per week ($35,568 a year), from January 1, 2020 | In effect today |
| 2024 | 2024 rule | $844 per week from July 1, 2024, then $1,128 per week ($58,656 a year) planned for January 1, 2025 | The $844 level applied from July 1, 2024 until a federal court vacated the rule on November 15, 2024. The $1,128 level never took effect. |
| 2026 | Technical amendment | $684 per week (restored) | Published May 15, 2026. Removed the 2024 text from the regulations and restored the 2019 text. |
The 2016 Rule That Never Took Effect
The Department of Labor published the 2016 rule on May 23, 2016, with a start date of December 1, 2016. It would have raised the standard salary level from $455 to $913 per week ($47,476 a year) and updated the levels automatically every three years.
On November 22, 2016, nine days before the start date, the U.S. District Court for the Eastern District of Texas blocked it. On August 31, 2017, the same court held the rule invalid in Nevada v. U.S. Department of Labor. The Department kept enforcing the $455 level until the 2019 rule replaced it.
The 2019 Rule: The Threshold in Effect Today
The Department announced the 2019 rule on September 24, 2019 and published it on September 27, 2019. It took effect on January 1, 2020. Here's what it changed:
- The standard salary level went from $455 to $684 per week ($35,568 a year).
- The highly compensated employee level went from $100,000 to $107,432 a year.
- Employers could count nondiscretionary bonuses and commissions, paid at least once a year, toward up to 10% of the standard level.
- The 2016 rule was formally withdrawn.
The restored 2019 rule has no automatic updates. The levels change only if the Department writes a new rule.
The 2024 Rule and the Court Rulings
The Department published the 2024 rule on April 26, 2024. It had two steps, plus automatic updates every three years starting July 1, 2027:
- July 1, 2024: $844 per week ($43,888 a year), with a highly compensated employee level of $132,964.
- January 1, 2025: $1,128 per week ($58,656 a year), with a highly compensated employee level of $151,164.
Here's how the courts stopped it:
- June 28, 2024: a federal court in Texas blocked the rule for the State of Texas as an employer. Other employers had to follow the $844 level starting July 1, 2024.
- November 15, 2024: the U.S. District Court for the Eastern District of Texas vacated the 2024 rule in Texas v. U.S. Department of Labor. The Department went back to enforcing the 2019 levels, and the January 2025 step never took effect.
- December 30, 2024: the U.S. District Court for the Northern District of Texas also vacated the rule, in Flint Avenue, LLC v. U.S. Department of Labor.
- May 5 and May 7, 2026: the Fifth Circuit Court of Appeals dismissed the appeals in both cases, so both rulings are final.
- May 15, 2026: the Department published a technical amendment in the Federal Register that removed the 2024 text from the regulations and put the 2019 text back.
As of October 2026, the Federal Register shows no newer proposed or final salary level rule. The May 2026 amendment notes that the Department could still update the rules through notice and comment rulemaking in the future.
Special Salary Rules for Certain Jobs and US Territories
A few groups have their own salary rules under the federal regulations (29 CFR 541.600 and 29 CFR 541.709):
| Group | Federal salary rule |
|---|---|
| Puerto Rico, the U.S. Virgin Islands, Guam and the Northern Mariana Islands | $455 per week ($23,660 a year) for employers other than the federal government |
| American Samoa | $380 per week ($19,760 a year) for employers other than the federal government |
| Motion picture producing industry | A base rate of at least $1,043 per week, or a proportionate amount for the days worked |
| Academic administrative employees at schools | At least $684 per week, or at least the entrance salary for teachers at the same school |
| Doctors, lawyers, teachers and outside sales employees | No salary level applies |
For most small businesses in the 50 states, the $684 level (or the state's higher level) is the one that applies.
How to Handle Employees Paid Near the Threshold
If a salaried employee earns less than $684 per week, or less than your state's level, you can't treat them as exempt. You have three main options:
- Raise the salary to the threshold and keep the employee exempt, as long as their job also passes the duties test.
- Reclassify the employee as nonexempt and pay overtime for hours over 40. You can still pay a salary, but you'll need to track their hours.
- Use bonuses to close a small gap. Nondiscretionary bonuses and commissions can make up to 10% of the $684 level.
The 10% Bonus Rule Under the 2019 Rule
Under 29 CFR 541.602, you can count nondiscretionary bonuses, incentive payments and commissions toward up to 10% of the standard salary level. Here's how it works:
- The payments must be made at least once a year. You can use any 52-week period as the year, and if you don't pick one ahead of time, it's the calendar year.
- The base salary still has to be at least $615.60 per week, which is 90% of $684.
- If the employee comes up short at the end of the year, you can make one catch-up payment no later than the next pay period after the year ends. That payment counts only toward the prior year.
- Discretionary bonuses, such as a surprise holiday bonus you decide on at the last minute, don't count.
- The 10% rule doesn't apply to highly compensated employees, who must get at least $684 per week as salary or fee.
Base salary: $620 per week × 52 weeks = $32,240
Quarterly sales bonuses paid during the year: $2,800
Total counted toward the threshold: $32,240 + $2,800 = $35,040
Annual threshold: $684 × 52 = $35,568
Shortfall: $35,568 minus $35,040 = $528
Catch-up payment due by the first pay period after year end: $528
Check your state's rules before you rely on bonuses. A state with a higher threshold may not let bonuses count toward it.
Paying a Salary Plus Overtime
Here's what it looks like if you keep a salary below the threshold and pay overtime instead. Say an office manager earns $640 per week for a 40-hour week and works 45 hours one week.
Regular rate: $640 ÷ 40 hours = $16 per hour
Overtime rate: $16 × 1.5 = $24 per hour
Overtime pay: 5 hours × $24 = $120
Total pay for the week: $640 + $120 = $760
Raising that salary to $684 would cost $44 more per week, or $2,288 a year. If the manager rarely works over 40 hours, paying overtime may cost less. If they often do, raising the salary may be simpler.
Our guide on how to calculate overtime pay covers other pay setups. If you're not sure a role is exempt at all, see how to classify employees.
States With Higher Exempt Salary Thresholds in 2026
Federal law sets the floor. These six states set a higher salary level for exempt employees, and employers there must pay the higher amount:
| State | 2026 exempt salary level | How it's set |
|---|---|---|
| California | $70,304 a year ($1,352 a week) | 2 times the state minimum wage ($16.90 an hour) for full-time work |
| Colorado | $57,784 a year ($1,111.23 a week) | Adjusted each year for inflation by the state's PAY CALC Order |
| New York | $1,275 a week ($66,300 a year) in New York City, Long Island and Westchester, and $1,199.10 a week ($62,353.20 a year) in the rest of the state | Applies to executive and administrative employees |
| Washington | $1,541.70 a week ($80,168.40 a year) | 2.25 times the state minimum wage ($17.13 an hour) for 40 hours |
| Alaska | $1,120 a week since July 1, 2026 ($1,040 a week before that) | 2 times the state minimum wage ($14 an hour) for the first 40 hours |
| Maine | $871.16 a week ($45,300.32 a year) | Set from the state minimum wage ($15.10 an hour) |
Coming in 2027
California: the state minimum wage rises to $17.40 an hour on January 1, 2027, so the exempt salary level rises to $72,384 a year.
Washington: starting January 1, 2027, the level is $1,773 a week ($92,196 a year) for employers with 51 or more employees, and $1,595.70 a week ($82,976.40 a year) for employers with 50 or fewer.
Maine: the level rises to $905.79 a week ($47,101.08 a year) on January 1, 2027.
Alaska: the state minimum wage rises to $15 an hour on July 1, 2027, which puts the exempt salary at $1,200 a week.
Colorado: the 2027 level has been proposed but isn't final yet.
California also has its own pay rule for computer software employees: $58.85 an hour ($122,573.13 a year) in 2026, rising to $61.03 an hour ($127,108.34 a year) on January 1, 2027. Our guide to California overtime laws explains the state's rules in detail.
What Employers Should Check Now
- Pay: every exempt employee earns at least $684 per week, or your state's higher level.
- Duties: each exempt employee's main job really is exempt work. A title alone isn't enough.
- Deductions: you don't cut an exempt employee's salary for partial-day absences or for weeks when there's less work.
- Hours: you track hours for every nonexempt employee, including salaried nonexempt staff, so weekly overtime is paid correctly.
- 2027 increases: if you have exempt staff in California, Washington, Maine, Alaska or Colorado, you've budgeted for next year's higher level.
- Old guidance: pages that still mention $913, $844 or $1,128 per week describe rules that are no longer in effect.
A time clock makes the hours part simple. TimeClick employee time tracking records each punch and totals weekly overtime, and the free time card calculator checks a single week.
Federal Overtime Salary Threshold FAQ
Short answers to the questions employers ask most about the salary threshold.
What is the federal overtime salary threshold in 2026?
$684 per week, or $35,568 a year, for most exempt executive, administrative and professional employees. The highly compensated employee threshold is $107,432 a year.
Did the $1,128 per week threshold take effect?
No. A federal court vacated the 2024 rule on November 15, 2024, before the January 1, 2025 increase. The first step, $844 per week, did apply from July 1, 2024 until that ruling. The appeals were dismissed in May 2026, and the Department of Labor removed the rule from the regulations on May 15, 2026.
What happened to the December 1, 2016 overtime rule?
A federal court blocked it on November 22, 2016 and struck it down on August 31, 2017. It never took effect, and the 2019 rule formally withdrew it.
Is a new federal salary threshold coming?
Not as of October 2026. No new salary level rule has been proposed, although the Department of Labor has said it could update the rules in the future.
Can a state require a higher salary than the federal threshold?
Yes. California, Colorado, New York, Washington, Alaska and Maine all set higher levels for 2026. California, for example, requires at least $70,304 a year. When the state level is higher, you pay the state level.
Can bonuses count toward the $684 salary level?
Yes, up to 10% of it. Nondiscretionary bonuses, incentive payments and commissions paid at least once a year can count, so the base salary must be at least $615.60 per week. This doesn't apply to the weekly salary for highly compensated employees.
Can I cut an exempt employee's pay for missing part of a day?
Generally, no. An exempt employee who does any work in a week must get the full salary for that week. The Department of Labor's Fact Sheet #17G lists the few deductions allowed, such as full-day absences for personal reasons.
Can exempt employees use the "no tax on overtime" deduction?
No. The federal income tax deduction for overtime covers only overtime pay the FLSA requires. The IRS says an employee who isn't eligible for FLSA overtime "does not receive qualified overtime compensation regardless of other laws or circumstances." For nonexempt employees, you report qualified overtime on 2026 Forms W-2 in Box 12, code TT (IRS FS-2026-13).
Sources
All checked in October 2026.
- Department of Labor: Earnings thresholds
- Department of Labor news release, May 14, 2026
- Federal Register, May 15, 2026: technical amendment (91 FR 27833)
- 29 CFR 541.600 (current text)
- 29 CFR 541.602: salary basis and the 10% bonus rule
- Federal Register, April 26, 2024: the 2024 rule
- Federal Register, September 27, 2019: the 2019 rule
- Department of Labor news release, September 24, 2019
- Federal Register, May 23, 2016: the 2016 rule
- Department of Labor Fact Sheet #17A: exemptions
- Department of Labor Fact Sheet #17G: salary basis
- Department of Labor Fact Sheet #17H: highly compensated employees
- Department of Labor: Overtime pay
- IRS FS-2026-13: qualified overtime deduction FAQs
- California DIR: 2026 minimum wage and exempt salary
- California DIR: 2027 minimum wage and exempt salary
- California DIR: computer software employee exemption
- Colorado CDLE: INFO #1, 2026 COMPS and PAY CALC Orders
- Washington L&I: 2026 minimum wage and exempt salary
- Washington L&I: 2027 minimum wage and exempt salary
- Alaska Department of Labor: minimum wage and exempt salary
- Maine Department of Labor: 2027 minimum wage and exempt salary
This guide is general information and isn't legal advice. For help with a specific employee, contact your state labor department or an employment attorney.
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