I get a base hourly rate plus commission. When I go over forty hours they pay me time and a half on the base rate only — the commission never gets counted. Is that legal?
Published October 22, 2026
The short answer
Where the Act’s overtime rules apply, commissions count as pay for hours worked and go into the “regular rate” that overtime pay is computed from, so a calculation built on a base hourly rate alone leaves the commission out of a rate it is meant to be part of. Whether those rules reach a particular job is a separate question: dealership mechanics and sales and parts personnel, outside sales employees, and some commissioned retail and service employees sit under exemptions. That question comes first.
Two short sections of the federal overtime regulations are specific to commissions. What follows quotes both, and one line from the Department of Labor’s overview of the regular rate, rather than summarizing them.
What does the federal regulation say about commissions and overtime?
29 CFR 778.117, “Commission payments—general,” sits under the heading “Principles for Computing Overtime Pay Based on the ‘Regular Rate’” and reads in full:
“Commissions (whether based on a percentage of total sales or of sales in excess of a specified amount, or on some other formula) are payments for hours worked and must be included in the regular rate. This is true regardless of whether the commission is the sole source of the employee's compensation or is paid in addition to a guaranteed salary or hourly rate, or on some other basis, and regardless of the method, frequency, or regularity of computing, allocating and paying the commission. It does not matter whether the commission earnings are computed daily, weekly, biweekly, semimonthly, monthly, or at some other interval. The fact that the commission is paid on a basis other than weekly, and that payment is delayed for a time past the employee's normal pay day or pay period, does not excuse the employer from including this payment in the employee's regular rate.”
What does the next section say about commission paid weekly?
The section that follows, 29 CFR 778.118, “Commission paid on a workweek basis,” is two sentences:
“When the commission is paid on a weekly basis, it is added to the employee's other earnings for that workweek (except overtime premiums and other payments excluded as provided in section 7(e) of the Act), and the total is divided by the total number of hours worked in the workweek to obtain the employee's regular hourly rate for the particular workweek. The employee must then be paid extra compensation at one-half of that rate for each hour worked in excess of the applicable maximum hours standard.”
What do those two sentences mean for the rate?
The first sentence builds the rate from the week’s whole pay and whole hours, so in a week where commission was earned it is not the base hourly rate. The second sets what is added for each overtime hour; the week’s pay has already covered straight time for every hour, so the extra is the fraction that sentence names. An extra already paid on the base rate counts toward it — the difference is that the regulation works it out on the rate with the commission in. Commissions that cannot be worked out until later are handled at 29 CFR 778.119 and 778.120.
Can a pay plan written another way change it?
The Department’s overview of the regular rate adds a line for a pay plan that says otherwise:
“The regular rate of pay is based upon actual facts and cannot be circumvented by an agreement.”
Do the federal overtime rules reach every commissioned job?
None of that answers whether federal overtime rules reach the job at all, and for commissioned work that is often the whole case. The Act exempts certain mechanics and sales and parts personnel at automobile dealerships from overtime, though minimum wage still applies to them; it exempts outside sales employees from both minimum wage and overtime; and a further overtime exemption, on conditions, covers some commissioned employees of retail and service establishments. The executive, administrative and professional exemptions generally turn on pay by salary rather than by the hour. Fact Sheets #11 (automobile dealers), #17F (outside sales), #20 (commissions paid by retail establishments) and #17A (the white-collar exemptions) cover them.
Before any of the above is worth working through, that is a call to the Wage and Hour Division on 1-866-487-9243, and a state labor department for what a state adds. A companion answer covers whether commission by itself switches overtime off.
What is worth writing down?
The hours, week by week. Each workweek’s hours actually worked, day by day, with clock-in and clock-out times from the punch record or schedule.
The pay stubs for those weeks. The base rate, the hours it paid, the commission amount, and — separately — the week each commission was earned for.
The commission arrangement as it stood then. The plan in force in those weeks, and the date of any change to it.
What can this page not tell a reader?
Whether federal overtime rules reach a particular job. The exemptions named above are where that is decided.
Whether the person doing the work counts as an employee. A legal test applied to the facts decides that, not the label in a contract.
How long there is to act, and what a state adds. Time limits apply to recovering back wages and states have their own wage rules, so the two calls named above are better made early than late. The Wage and Hour Division’s Back Pay page is at https://www.dol.gov/general/topic/wages/backpay.
What any one employer’s calculation came to. This page gives the general federal rule, not a reading of any particular job.
Where this is decided
U.S. Department of Labor, Wage and Hour Division
Ask the Wage and Hour Division whether the federal overtime rules reach the work described, and if they do, how commission is treated in the regular rate. Contacting the division does not require an attorney, and a state labor department is the place to ask what a state requires on top.
Contact detailsSources read for this answer
- 29 CFR 778.117 — Commission payments—general
U.S. Government Publishing Office / Electronic Code of Federal Regulations · Source note [36 FR 4981, Mar. 16, 1971] · read October 22, 2026
https://www.ecfr.gov/current/title-29/subtitle-B/chapter-V/subchapter-B/part-778/subpart-B/subject-group-ECFR7be43dce58760d9/section-778.117
- 29 CFR 778.118 — Commission paid on a workweek basis
Legal Information Institute, Cornell Law School (text of the Code of Federal Regulations) · read October 22, 2026
https://www.law.cornell.edu/cfr/text/29/778.118
- Fact Sheet #56A: Overview of the Regular Rate of Pay Under the Fair Labor Standards Act (FLSA)
U.S. Department of Labor, Wage and Hour Division · December 2019 · read October 22, 2026
https://www.dol.gov/agencies/whd/fact-sheets/56a-regular-rate
About this answer
What is written above is general information about a rule that exists. It is not written about anybody's particular job.
It does not say what any particular employer owes anyone. That turns on facts this page has never seen — the hours, the agreement, the state the work was done in — and on how somebody with the authority to decide reads them.
Rules differ from one state to the next, and they change. Every quotation above says what that document said on the date printed beside it, which is not the same as saying what it says today.
Where anything on this page and the official source disagree, the official source is the one that counts. The office named further up decides; this page only points at it.
Whichever way that goes, the thing an agency, a union or an attorney asks for first is a dated record of what actually happened, written down while it was happening.
Keep your own record of it
The hours, the base rate, the commission amounts, and the week each commission belonged to: those are the figures the question turns on, and they sit on the pay stubs and the punch record.
Start a record of those weeksFree to start, and no account until you choose to keep it. Private to you — nobody is contacted or notified.