Exempt Salary Threshold 2026: Federal and State Minimums

The federal exempt salary threshold in 2026 is $684 a week ($35,568 a year). The highly compensated employee (HCE) threshold is $107,432 in total annual pay. These are the 2019 figures. The 2024 increases to $844 and $1,128 a week were struck down in court, and DOL put the 2019 text back into the regulations on May 15, 2026. Several states set a higher minimum, so check yours first. In 2026 California requires $70,304 a year, Washington $80,168.40 and New York City $66,300. Whichever rule protects the employee more is the one that applies.

2026 exempt salary thresholds: federal and state

Sources: federal levels from DOL, earnings thresholds and the Federal Register, May 15, 2026; California from California DIR, 2026 minimum wage and Cal. Labor Code §515; New York from NY Minimum Wage Order, Part 142 and the Proskauer summary of the NY 2026 rates; Washington from Washington L&I; Colorado from Colorado CDLE, INFO #1; Alaska from Alaska DOLWD; Maine from Maine DOL. Colorado's weekly figure is the annual amount divided by 52.

A few cities and counties set their own minimum wages, but the exempt salary tests above are state-level. California's threshold is based on the state minimum wage, not a higher local one.

What the salary threshold is, and what it is not

Exempt salary threshold: the minimum salary an employee must be paid, on a salary basis, before an employer can treat them as exempt from overtime under the executive, administrative or professional ("white-collar") exemptions.

Clearing the threshold is one of three tests, and all three must pass (DOL Fact Sheet #17A):

1. 1Salary level. At least the amount in the table above.
2. 2Salary basis. A fixed amount each pay period that is not cut because of the quality or quantity of work. An exempt employee who does any work in a week gets the full week's salary, with limited exceptions such as full-day absences for personal reasons (29 CFR 541.602).
3. 3Duties. The job's primary duty must match the executive, administrative, professional, computer or outside sales definition. A job title does not decide this.

Paying someone $90,000 does not make them exempt. A $90,000 payroll clerk who processes entries without exercising independent judgment on significant matters is still non-exempt and owed overtime. Only the HCE route relaxes the duties test, and even then the employee must regularly perform at least one exempt duty.

Some jobs have no salary test at all under federal law: outside sales employees, teachers, and licensed doctors and lawyers practicing their profession. Computer employees can also qualify on an hourly rate of at least $27.63 instead of a salary.

What happened to the 2024 overtime rule

Sources: DOL rulemaking page and the Federal Register, May 15, 2026. Employers who raised salaries to $844 in mid-2024 were not required to keep them there once the rule was vacated. Cutting them back is legal, but it has a morale cost and may still leave the employee exempt only if state law agrees.

When federal and state thresholds differ

The FLSA sets a floor. A state law that gives employees more protection still applies (29 U.S.C. 218(a)). In practice, you apply the higher salary test and the stricter duties test for each employee's work location.

Example. An office manager in Sacramento earns $65,000 a year and meets the federal administrative duties test. Federally she is exempt, since $65,000 is above $35,568. In California she is non-exempt, because $65,000 is below $70,304. She must track hours and receive overtime, including California's daily overtime after 8 hours. The employer's choices are to raise her salary to at least $70,304 or to reclassify her as non-exempt.

Remote employees count where they work, not where the company is headquartered. A Texas company with a remote coordinator in Seattle applies Washington's $80,168.40 threshold to that person.

Can bonuses count toward the threshold?

Under the federal rule, nondiscretionary bonuses and commissions paid at least once a year can make up to 10% of the $684 standard salary level. If the year-end total falls short, the employer has one pay period to make up the difference (29 CFR 541.602). Colorado also allows up to 10% of its EAP salary to come from nondiscretionary bonuses and commissions (Colorado CDLE, INFO #1). Don't assume other states allow this. Check the state's rule before counting bonus pay toward it.

Exempt vs non-exempt at a glance

See our FLSA glossary entry for the underlying law and gross pay vs net pay for how overtime flows into a paycheck.

What to check before the next increase

• List every exempt employee with salary, work state and exemption type
• Flag anyone within 10% of their state threshold, since California, Washington, New York, Colorado, Alaska and Maine rise almost every year. California goes to $72,384 in 2027, when its minimum wage reaches $17.40
• Re-test duties for anyone near the line; salary increases don't cure a duties problem
• For employees you reclassify as non-exempt, set up time tracking and decide whether to convert salary to an hourly rate that keeps total pay steady
• Update offer letter templates and job postings in states that require pay ranges
• Configure state thresholds in your payroll software so new hires are checked automatically

The California 2027 figure uses the $17.40 minimum wage announced by the DIR, 2027 minimum wage. Our HR compliance guide covers the rest of the annual compliance calendar.

Frequently asked questions