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Determine Hourly Wage: A Complete Guide for Texas Workers and Employers

Whether you’re negotiating your first job offer, calculating unpaid overtime, or running payroll for your business, one thing is essential: understanding how to determine hourly wage.

It may seem simple, but calculating hourly pay accurately involves more than just dividing salary by hours. You need to factor in legal requirements, benefits, bonuses, deductions, and more—especially under Texas and federal wage laws.

At The Lange Firm, we help both employees and employers across Texas navigate complex wage issues, from wage theft to contract disputes and compliance. In this blog, we’ll walk you through everything you need to know to determine hourly wage with confidence.

Table of Contents

• What Is an Hourly Wage?

   

• Why Knowing Your Hourly Wage Matters

   

• How to Determine Hourly Wage from Salary

   

• How to Factor in Overtime Pay

   

• Commission, Tips, and Bonuses: How They Affect Hourly Wages

   

• Minimum Wage in Texas and the Federal Standard

   

• Deductions and Net Hourly Pay

   

• Common Wage Calculation Errors in Texas

   

• Legal Rights if You Are Underpaid

   

• How The Lange Firm Can Help

   

• Final Thoughts

   

• Related Blogs for Further Reading

   

What Is an Hourly Wage?

Your hourly wage is the amount of money you earn for each hour of work. It’s the most common form of compensation for:

• Part-time workers

   

• Hourly employees

   

• Contractors and temp workers

   

• Some non-exempt salaried employees

   

It’s also critical for calculating overtime, final paychecks, and back pay in wage disputes.

Why Knowing Your Hourly Wage Matters

Understanding your hourly wage helps you:

• Track your earnings accurately

   

• Identify wage violations or underpayment

   

• Evaluate job offers fairly

   

• Budget for taxes, savings, and expenses

   

• Determine unpaid overtime or wage theft

   

Many employees—even salaried ones—don’t realize they are entitled to additional compensation if they work over 40 hours per week. That’s why it’s crucial to know your effective hourly rate.

How to Determine Hourly Wage from Salary

If you’re paid a salary, here’s how to calculate your hourly wage:

Step 1: Find Your Annual Salary

Let’s say your salary is $52,000 per year.

Step 2: Determine the Number of Work Hours

The standard full-time schedule is 40 hours/week × 52 weeks = 2,080 hours per year.

Step 3: Divide Salary by Hours

$52,000 ÷ 2,080 = $25 per hour

✅ Your effective hourly wage is $25.00/hour

If you work more than 40 hours a week and you’re non-exempt under the Fair Labor Standards Act (FLSA), you’re likely entitled to overtime pay.

How to Factor in Overtime Pay

In Texas (and under federal law), non-exempt employees must receive:

• 1.5× their regular rate for hours worked over 40 in a week

   

Example:

• Regular rate = $20/hour

   

• Overtime rate = $20 × 1.5 = $30/hour

   

• If you work 45 hours, you earn:

   

  • $20 × 40 = $800

     

  • $30 × 5 = $150

     

  • Total = $950 for the week

     

✅ Overtime must be included in your gross wage calculation.

Commission, Tips, and Bonuses: How They Affect Hourly Wages

✅ Commission-Based Workers

If you receive a base wage plus commission, your total compensation must still average out to meet minimum wage.

✅ Tipped Employees

In Texas, employers may pay $2.13/hour to tipped workers, as long as tips bring total hourly pay up to $7.25 (federal minimum wage).

If tips fall short, the employer must make up the difference.

✅ Bonuses and Shift Differentials

Non-discretionary bonuses (e.g., based on performance) must be included when calculating your “regular rate” for overtime.

📌 If you’re not sure whether your employer is calculating your wages fairly, The Lange Firm can review your pay records.

Minimum Wage in Texas and the Federal Standard

As of now:

• Texas minimum wage = $7.25/hour

   

• Federal minimum wage = $7.25/hour

   

Texas follows the federal standard. Cities cannot set their own minimum wages (unlike in states like California or New York).

If you’re earning below minimum wage or not receiving overtime, your rights may be violated under:

• FLSA (Fair Labor Standards Act)

   

• Texas Payday Law

   

Deductions and Net Hourly Pay

To determine your net hourly wage, subtract:

• Federal income tax

   

• Social Security and Medicare

   

• State or local taxes (Texas does not have a state income tax)

   

• Benefits deductions (insurance, retirement, etc.)

   

Example:

• Gross hourly pay = $20/hour

   

• After deductions = $16/hour net pay

   

Understanding both gross and net pay is important for budgeting and wage claims.

Common Wage Calculation Errors in Texas

Many wage disputes arise from calculation mistakes or employer misconduct. Common problems include:

• Misclassifying employees as exempt

   

• Using straight-time pay instead of overtime rates

   

• Failing to count off-the-clock work (like setup, cleanup, or donning gear)

   

• Deducting time for meal breaks that are not uninterrupted

   

• Not paying for mandatory meetings or training

   

• Misusing the tip credit

   

📌 The Lange Firm helps employees file wage claims and recover unpaid earnings.

Legal Rights if You Are Underpaid

If your employer fails to pay the correct hourly wage, you can:

• File a complaint with the Texas Workforce Commission (TWC)

   

• File a federal complaint with the Department of Labor (DOL)

   

• Pursue a private lawsuit for unpaid wages

   

You may be entitled to:

• Back pay

   

• Liquidated damages (double the unpaid wages)

   

• Attorney’s fees

   

• Injunctive relief (e.g., order to change pay practices)

   

You cannot be legally fired for asserting your right to fair wages.

How The Lange Firm Can Help

We represent both workers and small business employers with wage-related matters across Texas.

For Employees:

• Review your wage and hour records

   

• File complaints with the TWC or DOL

   

• Negotiate unpaid wage settlements

   

• Sue for overtime and wage theft violations

   

For Employers:

• Audit payroll and overtime compliance

   

• Draft legal pay policies and job classifications

   

• Defend against wage claims or audits

   

• Avoid costly mistakes and penalties

   

📞 Whether you’re an employee or employer, contact The Lange Firm for a consultation on wage compliance and compensation strategy.

Final Thoughts

So, how do you determine hourly wage accurately in Texas?

✅ Start with your total pay, divide by hours worked, and factor in bonuses, tips, and overtime.
If something feels off—or your pay isn’t what it should be—you may have a legal claim.

At The Lange Firm, we make sure employees get what they’ve earned and businesses stay compliant.