California Exempt Employee Salary Threshold
To be exempt from overtime in California, a salaried employee has to clear a pay floor tied to the state minimum wage and spend most of their time on exempt work.
For 2026, California's minimum salary for exempt executive, administrative and professional employees is $70,304 a year ($1,352.00 a week): twice the $16.90 state minimum wage for 2,080 hours. On January 1, 2027 it rises to $72,384. The salary alone isn't enough: the employee must also spend more than half of their time on exempt duties.
How the threshold is set
Labor Code 515 ties the exempt salary to the state minimum wage: at least two times the minimum wage for full-time employment, which the Labor Commissioner applies as 2,080 hours a year. Because the minimum wage adjusts each January for inflation, so does the threshold.
| Year | State minimum wage | Annual threshold | Monthly | Weekly |
|---|---|---|---|---|
| 2026 | $16.90 | $70,304 | $5,858.67 | $1,352.00 |
| 2027 | $17.40 | $72,384 | $6,032.00 | $1,392.00 |
The threshold is far above the federal one, which is $684 a week. When the two differ, California employers have to meet the higher state figure. A city's higher minimum wage doesn't change it: the state figure applies everywhere. Two industries have their own floor: exempt managers at covered fast food restaurants must earn twice the fast food minimum wage, and covered health care facilities follow a separate threshold set by SB 525.
The duties tests
An employee has to meet one of the duties tests and be primarily engaged in exempt work, which in California means more than half of their working time. That's stricter than the federal "primary duty" standard. Courts look at what the person actually does, not the job title.
- Executive: manages the business or a department, regularly directs two or more full-time employees, and has authority to hire and fire or whose recommendations carry real weight.
- Administrative: office or non-manual work directly related to management policies or business operations, regularly using discretion and independent judgment.
- Professional: licensed or certified in law, medicine, dentistry, pharmacy, optometry, architecture, engineering, teaching or accounting, or work in a learned or artistic profession.
Special thresholds
| Employee type | 2026 requirement |
|---|---|
| Executive, administrative, professional | $70,304 a year salary |
| Computer software professionals | $122,573.13 a year (set annually by DIR) |
| Licensed physicians and surgeons paid hourly | $107.17 an hour |
| Inside commissioned salespeople | More than 1.5 times the minimum wage, with over half of pay from commissions |
The Department of Industrial Relations adjusts the computer professional and physician rates each year by the change in the California Consumer Price Index. Next year's figures usually come out in the fall.
Salary basis rules
- Full-time only. The threshold assumes full-time work, and California doesn't prorate it for part-time employees.
- Fixed salary. The employee must get a predetermined salary that isn't cut for the quality or quantity of work. Deductions for partial-day absences are generally not allowed.
- Bonuses don't count toward the floor the way they can under federal rules.
What happens if an employee doesn't qualify
A salaried employee who falls below the threshold or fails the duties test is non-exempt. They're owed overtime at 1.5 times their regular rate after 8 hours in a day or 40 in a week, double time after 12 hours in a day, and meal and rest breaks with premium pay when missed. Misclassification claims typically go back three years, four with an unfair competition claim, so a raise in January that the employer overlooks can add up quickly.
Employers should check every exempt salary against the new figure before January 1 each year.
Run your numbers
Our Exempt Salary Threshold Calculator checks a salary against this year's and next year's thresholds, including the computer professional and commissioned sales rules. If you're non-exempt, the daily overtime calculator shows what you're owed.
Frequently Asked Questions
What is the exempt salary threshold in California for 2026?
$70,304 a year, or $1,352.00 a week. It equals two times the $16.90 state minimum wage for 2,080 hours of full-time work.
Will the California exempt salary go up next year?
Yes. The state minimum wage rises to $17.40 on January 1, 2027, which raises the threshold to $72,384 a year.
Does a city minimum wage raise the exempt salary threshold?
No. The threshold is based on the state minimum wage, even in cities with a higher local minimum. Two industries work differently: exempt fast food managers must earn twice the fast food minimum wage, and covered health care facilities have their own, higher exempt threshold under SB 525.
Is paying a salary enough to make an employee exempt?
No. The employee must also meet a duties test and spend more than half of their working time on exempt duties. A salaried employee who mostly does non-exempt work is owed overtime.
What is the salary threshold for software engineers in California?
Computer software professionals can be exempt if they meet the duties test and earn at least the pay the Department of Industrial Relations sets each year: for 2026, a salary of $122,573.13 a year or the equivalent hourly rate DIR publishes.
This article is for general information only and is not legal advice. Exemption depends on the actual work performed; talk to an employment attorney about a specific role.