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Real Estate Agencies: Hourly vs. Salaried Employee Payroll (2026)
Hourly versus salaried in a real estate brokerage is not a preference, it is the exemption test: a salary of at least $684 a week plus a duties test, and real estate brokerages have industry-specific exemptions on top. Real estate sales agents at the national median earn $1,016 a. BEG: $45 per employee per month inside the payroll software you already use, live in 3 to 5 days.
Who in a real estate brokerage can be salaried and exempt
The outside sales exemption from minimum wage and overtime requires that the employee's primary duty be making sales or obtaining orders or contracts, and that the employee be customarily and regularly engaged away from the employer's place of business. The salary requirements of the regulation do not apply to this exemption.
Administrative and office staff who do not meet an exemption must receive overtime at one and one-half times the regular rate for hours over 40 in a workweek. The standard salary level for the executive, administrative, and professional exemptions is $684 per week ($35,568 per year).
The salary math for real estate brokerages
The standard salary level is $684 a week, $35,568 a year. BLS puts the May 2025 national median for real estate sales agents at $52,830, which is $1,016 a week, above the floor, so for that role the duties test is the whole question. Paying a salary to a non-exempt employee is legal; it just does not remove overtime, which is then computed on the salary divided by hours actually worked each week.
What changes when a role moves between the two
Moving licensed agents and administrative staff from hourly to salaried changes the pay code, the timekeeping rule and the overtime treatment at once. A salaried non-exempt employee still needs hours recorded every week, and a salaried exempt one needs the exemption documented against the rule above, because in an audit the burden of proving the exemption sits with the employer.
The rules behind this page, with sources
General information, not legal advice. Every rule below was read on the agency page linked next to it.
- The outside sales exemption from minimum wage and overtime requires that the employee's primary duty be making sales or obtaining orders or contracts, and that the employee be customarily and regularly engaged away from the employer's place of business. The salary requirements of the regulation do not apply to this exemption. [DOL Fact Sheet #17F]
- Administrative and office staff who do not meet an exemption must receive overtime at one and one-half times the regular rate for hours over 40 in a workweek. The standard salary level for the executive, administrative, and professional exemptions is $684 per week ($35,568 per year). [DOL WHD, Earnings thresholds for the EAP exemption (29 CFR 541.600)]
Read the full guide to FLSA overtime rules for employers, and the rest of the real estate brokerage payroll library.
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Frequently Asked Questions
Can a real estate brokerage pay licensed agents a salary and skip overtime?
Only if the role meets an exemption: the $684 weekly salary floor plus the duties test, or an industry-specific exemption. The outside sales exemption from minimum wage and overtime requires that the employee's primary duty be making sales or obtaining orders or contracts, and that the employee be customarily and regularly engaged away from the employer's place of business.
Does the $52,830 national median for real estate sales agents clear the salary test?
$1,016 a week is above the $684 floor, so salary is not the obstacle; the duties test is. BLS OEWS, May 2025.
What does managed payroll cost for a real estate brokerage?
$45 per employee per month, all-inclusive, inside the payroll software you already use, with no monthly minimum. Commission-only agent payroll, agent contractor vs W-2 classification and split commission processing are configured at setup, not billed as add-ons.
Related Resources
Anthony leads payroll solutions at Business Executive Group, a national managed payroll firm serving businesses across industries including Real Estate Agencies. BEG manages payroll at $45 PEPM, all-inclusive, with deep expertise in compliance, multi-state filing, and industry-specific payroll requirements. Get instant pricing at beghr.com.
Authoritative source: U.S. Department of Labor: Overtime Pay Under the FLSA
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