The formulas
- Weekly equivalent = annual salary / 52
- Standard test: weekly salary plus up to 10% of $684 per week in annual nondiscretionary bonuses >= $684, and an executive, administrative or professional duties test
- HCE test: total annual compensation >= $107,432, including at least $684 per week in salary, and one exempt duty
How it works
29 CFR 541.600 requires an employee in the executive, administrative or professional exemption to be paid on a salary basis at not less than $684 per week. The rule translates that to $1,368 biweekly, $1,482 semi-monthly and $2,964 monthly. The shortest period that can meet the test is one week.
29 CFR 541.601 deems an employee exempt if total annual compensation is at least $107,432, including at least $684 per week paid on a salary or fee basis, and the employee customarily performs any one exempt duty. Under 29 CFR 541.602(a)(3), up to 10 percent of the $684 level can be met with nondiscretionary bonuses, incentives and commissions paid annually or more often; this tool applies that credit to the standard test. For the highly compensated test, the $684 per week must be paid on a salary or fee basis, and commissions and nondiscretionary bonuses count only toward the $107,432 total. Salary alone does not make a job exempt: the duties tests still apply. Several states set higher minimums, which you should check separately. Other rules in the part, such as the lower rates for U.S. territories, are not modeled.
Illustrative figures only. Check the result against your firm's methodology before relying on it.
Common questions
Does a high salary make someone exempt?
Not by itself. Outside the HCE rule the duties tests must also be met.
Can a bonus meet the weekly minimum?
For the standard test, up to 10 percent of the $684 level can come from nondiscretionary bonuses paid at least annually (29 CFR 541.602(a)(3)). For the HCE test the $684 per week must be paid on a salary or fee basis, and the $107,432 total can include commissions and nondiscretionary bonuses.
Are state thresholds different?
Some states set higher thresholds. Use the higher of the federal and state test.
Sources
- 29 CFR 541.600 Amount of salary required, Cornell LII
- 29 CFR 541.601 Highly compensated employees, Cornell LII
- 29 CFR 541.602 Salary basis, Cornell LII
Runs in your browser. The figures you type are not sent to CORAA or stored. Check the result against your firm's methodology before relying on it.