Straight-Time Pay

Straight-Time Pay refers to the regular earnings an employee receives for working up to the standard number of hours in a workweek, typically 40 hours. It is calculated by multiplying an employee’s standard hourly rate by the number of hours worked, without including any overtime, bonuses, or additional compensation. Straight-time pay forms the foundation of most wage calculations and is distinct from premium or overtime pay.

Key Facts

• Hourly Rate Basis: Calculated using the employee’s base hourly wage, without additional pay adjustments.
• Standard Work Hours: Applies only to hours worked within the regular full-time schedule, not including overtime.
• Excludes Premiums: Does not account for shift differentials, bonuses, or overtime rates.
• Used in Payroll: Forms the basic component of most payroll systems and wage calculations.
• Impacts Budgeting: Employers use straight-time pay to forecast labor costs and manage compensation plans.

1. How is straight-time pay calculated?

It is calculated by multiplying the number of hours worked (up to 40) by the employee’s regular hourly rate. For example, 40 hours × $20/hour = $800.

2. Does straight-time pay include overtime?

No, overtime is paid separately at a higher rate - typically time and a half - and is not included in straight-time pay.

3. Who receives straight-time pay?

Hourly employees and sometimes non-exempt salaried employees who track hours worked.

4. Is straight-time pay used in salaried positions?

Generally not, unless the salaried employee is non-exempt and their pay is broken down for overtime or compliance purposes.

5. Why is understanding straight-time pay important?

It helps employers stay compliant with wage laws and assists employees in understanding their regular compensation.