Tie-out tool / Bonuses
Bonuses, the regular rate and Code TT
A bonus that must be included in the regular rate makes the half-time premium larger than half the hourly rate. Code TT then has to be built from the higher regular rate for every week the bonus covers.
The regular rate is total pay for the workweek, less certain excluded payments, divided by hours worked. (IRS FS-2026-13, Q15)
The federal example
| No bonus | With a $46 production bonus | |
|---|---|---|
| Hourly rate | $12.00 | $12.00 |
| Hours worked | 46 | 46 |
| Regular rate | $12.00 | $13.00 |
| Half-time premium per hour | $6.00 | $6.50 |
| Premium for 6 hours over 40 (Code TT) | $36.00 | $39.00 |
From 29 CFR 778.110: 46 hours at $12 is $552; adding the $46 bonus gives $598; divided by 46 hours, the regular rate is $13.
Bonuses that cover many weeks
A quarterly or annual bonus is spread back over the workweeks in which it was earned, and each overtime week gets extra half-time on the bonus share. (29 CFR 778.209) Discretionary bonuses and gifts can be left out of the regular rate. (29 CFR 778.208)
What the tool does
The tie-out tool stops when it finds a bonus or commission code for an employee and gives no number. Whether a bonus is discretionary is a judgment the file cannot answer.
Do the whole year from a file
Drop a timesheet CSV, paste the register overtime totals, and get a worksheet per employee with the reason for every difference.
Open the tie-out toolRuns in your browser. Payroll data is never uploaded.
Questions
Does a holiday gift bonus change Code TT?
Gifts and discretionary bonuses can be excluded from the regular rate under 29 CFR 778.208. A promised or formula bonus cannot.
Sources
- 29 CFR 778.110, hourly rate employee
- 29 CFR 778.208, bonuses in the regular rate
- 29 CFR 778.209, method of inclusion of bonus in regular rate
- IRS Fact Sheet FS-2026-13, qualified overtime questions and answers (August 2026)
Fetched 2026-11-10. Regulation text was checked against the federal annual edition; links open the current online version.
Updated 2026-11-10. Tickfoot is an information tool, not tax, legal or professional advice.