Overtime Calculation in UAE As per UAE Labour Law-Complete Guide

How to Calculate Overtime as per UAE Labour Law

Working hours in UAEOpens in a new tab. is governed by UAE LABOUR LAWOpens in a new tab.. Overtime Calculation in UAE is calculated on the basis of Basic Salary. There are many jobs which often require an employee to work overtime whether an employee is entitled to overtime or not. 

It always depends on the role of the employee and the working hours of the company has in place. Each employee should be aware of the normal working hours and how many additional hours an employee asked to work.

overtime in dubai

The overtime provision will not be applicable to the following positions:

  • Senior Positions;
  • Administrative Supervisory Roles;
  • Crews of naval ships and Marine employees.

As per UAE Labour LawOpens in a new tab. an employee’s normal working day should not exceed 8 hours [update] OR 48 hours per per  week.  An employer is also able to request an employee to perform up to 2 hours of additional work, which will be treated as overtime. However, the working hours may be increased to nine hours per day in case of persons employed in trade, hotels , cafeterias guards.

Following hours are not included in computing over time:

  • The time travelling to and from work.
  • Resting and food break.

How is Overtime Calculated in UAE?

Computation/Calculation of Overtime:

Under UAE Labour LawOpens in a new tab., Article 67, Article 68, Article 68, Article 69, Article 70, Article 71 and Article 72 cover how to calculate overtime. Overtime in all cases is calculated based on Basic Salary. 

 

Computation of Normal Overtime:

  • If the nature of the job requires overtime, the employees shall be paid overtime and the payment shall be equivalent to the wage paid for the ordinary working hours plus and increase of not less than 25% of his wage for the overtime period.

Example:

  1. Basic Salary X 12/365= per day salary
  2. Per day Salary/8=Per hour salary
  3. Overtime amount is =Number of overtime hours X Per hour salary X 1.25
  • However, if the employee’s overtime fall between the hours  9.00 PM to 4.00 AM the employee will be entitled to an overtime equivalent to the normal working hours plus an increase of not less than 50% of his wage for the overtime  period.

Example:

  1. Basic Salary X 12/365= per day salary
  2. Per day Salary/8=Per hour salary
  3. Overtime amount is =Number of overtime hours X Per hour salary X 1.5

Computation of Friday Overtime:

  • If the circumstances require the employee to work on a Friday, he must be granted either another day off (compensatory off) or receive his basic salary plus an additional 50 % of his remuneration (i.e, basic salary). However, employee cannot be asked to work more than two consecutive Friday unless they are employed on a daily wage basis.

Example:

  1. Basic Salary X 12/365= per day salary
  2. Per day Salary/8=Per hour salary
  3. Overtime amount is =No of overtime hours X Per hour salary X 1.5 or An additional day off.

Computation of overtime during Public holiday:

As per the Article 81 of UAE Labour LawOpens in a new tab., where the circumstances of the work make it necessary for  a worker to work on public holidays or rest day in respect of which he/she is entitled to full or partial pay, he shall be granted compensatory leave in respect of such days, together with a bonus equal to 50 per cent of his remuneration. If he is not compensated for such days by leave, his employer shall pay him a bonus equal to 150 percent of his basic remuneration in respect of the days worked.
 
Example:
  1. Basic Salary X 12/365= per day salary
  2. Per day Salary/8=per hour salary
  3. Overtime= Number of overtime hours X Per hour salary X 1.5 in addition to one day compensatory off
  • 100 percent of normal daily remuneration basic salary plus allowances plus 150 per cent of basic salary.

OR

Example:

  • Basic Salary X 12/365= per day salary
  • Per day Salary/8=per hour salary
    Overtime= Number of overtime hours X Per hour salary X 2.5

Calculation of overtime is very easy and is clearly provided in UAE Labour law.Opens in a new tab.

You may also refer to the below link on the overtime calculation in UAE as per New UAE Labour Law effective from February 2022.

https://emiratesdiary.com/uae-labour-law-2/overtime-calculation-new-uae-labour-law

 


FAQ-Frequently Asked Questions on Overtime Calculation in UAE

What is normal overtime rate in UAE?

If the work circumstances require that the worker be employed for hours exceeding the ordinary working hours, such extended time shall be deemed overtime for which the Worker shall be paid his basic wage for his normal hours of work plus a supplement of at least 25 per cent of that wage.

For example:
Basic Salary X 12/365= per day salary
Per day Salary/8=Per hour salary
Overtime amount is =Number of overtime hours X Per hour salary X 1.25

It could increase to 50 per cent if overtime is done between 10 pm and 4 am. This rule does not apply on workers who work on basis of shifts.
For example:
Basic Salary X 12/365= per day salary
Per day Salary/8=Per hour salary
Overtime amount is =Number of overtime hours X Per hour salary X 1.5

Is overtime calculated on basic or gross salary?

The overtime is calculated based on basic salary.

Can the commuting time be counted as part of working hours?

The time spent by the worker in commuting from his place of residence to his workplace is not included in the working hours, except for certain categories of workers as specified by the ‘Executive Regulations of the Labour Law’.

What can I do if I am not paid overtime compensation?

In case you are not paid your overtime due in accordance with the Labour Law and its executive regulations, you can address your issue to the MOHRE advisory centre on 04 665 9999.

What are the normal working hours for private sector?

Article 17 of the Federal Decree Law No. 33 of 2021 on the Regulation of Labour Relations in the Private Sector, the ‘UAE Labour Law’ identifies the normal working hours for the private sector as 8 hours per day, or 48 hours per week. However, The daily working hours may increase or decrease for certain economic sectors or certain categories of workers, as specified by the ‘Executive Regulations of the Labour Law’.

How is overtime calculated on Off-Day?

If the circumstances require the worker to work on his off-day, as specified in the labour contract, or work regulations, then the worker will be entitled to a substitute rest day, or to a pay equal to normal working hours’ remuneration (which is based on basic salary) plus 50 per cent of that pay.

Basic Salary X 12/365= per day salary
Per day Salary/8=Per hour salary
Overtime amount is =No of overtime hours X Per hour salary X 1.5 or An additional day off.

Is forced overtime legal in UAE?

Employer should not force any of its employees to work for overtime unless it is agreed on the employment contract. However, it is common for a contract of employment to include a clause with wording to the effect that if the employer requests it, the employee will be expected to work additional hours owing to the demands of a business.

Is lunch break included in working hours in UAE?

The worker has the right to have one or more breaks, if he works five consecutive hours. These breaks must not be less than one hour. Breaks are not calculated within the working hours.

How is overtime calculated on Public Holiday?

where the circumstances of the work make it necessary for  a worker to work on public holidays or rest day in respect of which he/she is entitled to full or partial pay, he shall be granted compensatory leave in respect of such days, together with a bonus equal to 50 per cent of his remuneration. If he is not compensated for such days by leave, his employer shall pay him a bonus equal to 150 percent of his basic remuneration in respect of the days worked.

For example:

Basic Salary X 12/365= per day salary
Per day Salary/8=per hour salary
Overtime= Number of overtime hours X Per hour salary X 1.5 in addition to one day compensatory off
 
Or
Basic Salary X 12/365= per day salary
Per day Salary/8=per hour salary
Overtime= Number of overtime hours X Per hour salary X 2.5

How do you calculate hours worked?

1. Determine the start and the end time
2. Convert the time to military time (24 hours)
3. Transform the minutes in decimals
4. Subtract the start time from the end time
4. Subtract the start time from the end time

Is it legal to work 12 hours a day in UAE?

Article 65 of the UAE Labor Law states that maximum normal working hours for employees is 8 hours per day or 48 hours per week. However, for employees of establishments such as hotels and restaurants, there are exceptions. They may be required to work for up to 9 hours per day.

What are the categories exempted from Overtime payment?

As per Clause 4 of Article 15, the following categories shall be exempted from the provisions relating to the maximum working hours:
a. The chairpersons and members of the boards of directors.
b. The persons occupying supervisory positions if such positions vest in them the powers of the employer.

Occupation type:

c. The crews of naval vessels and the seafarers who enjoy special service conditions due to the nature of their work.
d. Those engaged in work which is required by reasons of technical nature
to be carried on continuously by a succession shift, subject to the condition that the average working hours do not exceed (56) hours per week.
e. The preparatory or complementary works that should necessarily be carried out beyond the time limits laid down for the general working of the establishment.

Can you refuse to work overtime?

You cannot say that i dont want to work overtime. An employer is also able to request an employee to perform up to 2 hours of additional work, which will be treated as overtime.

How does the overtime applicable on remote workin agreement?

In case an employee requests to perform their work remotely, the employer must specify their working hours.

What is minimum and maximum overtime hours per day?

There are no such rule on minimum OT hours . I guess the minimum OT hour should at least be 1 hour. However, Employers may ask their employees to work overtime, but the number of extra hours must not exceed 2 hours per day.

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Deepak

Deepak is a passionate blogger with interests in bitcoin, online marketing, and writing.

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