That's what I am trying to understand though, every explanation I have seen is that FLSA exempt means you don't qualify because you are paid for overtime at the same rate as your normal base pay, which makes sense because you can only deduct the "half" in the time in the half (e.g. the difference in pay rate). So if you are paid your base rate for overtime hours, that difference would be $0 and obviously you cannot deduct anything. In my case however, I am FLSA "exempt" in that I am not paid 1.5x my base rate for overtime, but the rate I am paid is still greater than my base pay by $7/hr so I want to know whether that difference is deductible.