# Highly compensated employee — FLSA overtime exemption duties tests by category (29 CFR Part 541)

For Highly compensated employee, cfr section is § 541.601; duties test is an employee with total annual compensation of at least $107,432 is deemed exempt under section 13(a)(1) of the Act if the employee customarily and regularly performs any one or more of the exempt duties or responsibilities of an executive, administrative or professional employee; salary or compensation requirement is an employee with total annual compensation of at least $107,432 is deemed exempt under section 13(a)(1) of the Act; how it must be paid is “Total annual compensation” must include at least $684 per week paid on a salary or fee basis; cfr citation is 29 CFR Part 541, recorded from its source on 2026-08-19; source re-checked 2026-09-16.

- **Exemption category:** Highly compensated employee _(verified: appears in the quote below)_
- **CFR section:** § 541.601 _(verified: appears in the quote below)_
- **Duties test:** an employee with total annual compensation of at least $107,432 is deemed exempt under section 13(a)(1) of the Act if the employee customarily and regularly performs any one or more of the exempt duties or responsibilities of an executive, administrative or professional employee _(verified: appears in the quote below)_
- **Salary or compensation requirement:** an employee with total annual compensation of at least $107,432 is deemed exempt under section 13(a)(1) of the Act _(verified: appears in the quote below)_
- **How it must be paid:** “Total annual compensation” must include at least $684 per week paid on a salary or fee basis _(verified: appears in the quote below)_
- **CFR citation:** 29 CFR Part 541 _(our reading, not quoted from the source)_

## What the source says

> § 541.601 Highly compensated employees. (a) (1) Beginning on January 1, 2020, an employee with total annual compensation of at least $107,432 is deemed exempt under section 13(a)(1) of the Act if the employee customarily and regularly performs any one or more of the exempt duties or responsibilities of an executive, administrative or professional employee as identified in <https://www.ecfr.gov/current/title-29/part-541/subpart-B> subparts B , <https://www.ecfr.gov/current/title-29/part-541/subpart-C> C or <https://www.ecfr.gov/current/title-29/part-541/subpart-D> D of this part . (2) Where the annual period covers periods both prior to and after January 1, 2020, the amount of total annual compensation due will be determined on a proportional basis. (b) (1) “Total annual compensation” must include at least $684 per week paid on a salary or fee basis as set forth in <https://www.ecfr.gov/current/title-29/section-541.602> §§ 541.602 and <https://www.ecfr.gov/current/title-29/section-541.605> 541.605 , except that <https://www.ecfr.gov/current/title-29/section-541.602#p-541.602(a)(3)> § 541.602(a)(3) shall not apply to highly compensated employees. Total annual compensation may also include commissions, nondiscretionary bonuses and other nondiscretionary compensation earned during a 52-week period. Total annual compensation does not include board, lodging and other facilities as defined in <https://www.ecfr.gov/current/title-29/section-541.606> § 541.606 , and does not include payments for medical insurance, payments for life insurance, contributions to retirement plans and the cost of other fringe benefits.

## Source

- https://www.ecfr.gov/current/title-29/subtitle-B/chapter-V/subchapter-A/part-541

Last verified: 2026-09-16. Review by: 2027-02-15.
Part of [FLSA overtime exemption duties tests by category (29 CFR Part 541)](https://referencesource.org/flsa-overtime-exemption-duties-tests/).