This Overtime Calculator UAE can do Overtime Calculation In UAE. It is a web-based tool designed to help calculate overtime pay for employees in the United Arab Emirates (UAE) based on UAE “Federal Decree-Law No. 33 of 2021 rules“. It allows users to input parameters such as basic salary and the number of overtime hours worked during specific periods and on different days.
Overtime Calculation UAE
Also Use: “UAE gratuity calculation“
How to calculate Overtime in UAE as per UAE Labour Law?
In the UAE business world, understanding the overtime calculation rules is key for employers and employees. UAE Labour Law has guidelines for overtime calculation to ensure employees are compensated fairly for the extra hours they work beyond the standard working week. In this post we will go through the rules and regulations of overtime calculation in UAE.
1. What is Overtime?
Overtime means the extra hours an employee works beyond the regular working hours mentioned in their employment contract. UAE Labour Law has the maximum number of overtime hours an employee can work in a day to protect the workers and prevent exploitation.
2. Maximum Overtime Hours
According to UAE Labour Law, an employee can work maximum 2 hours of overtime in a day. Employers cannot ask or force employees to work beyond this limit except in exceptional cases where there is an emergency like unexpected situations.
3. Overtime Pay Calculation
UAE Labour Law has a simple and uniform way of calculating overtime pay. Employees who work overtime are entitled to their regular pay for the normal working hours which is based on their basic salary. And they will get an additional 25% of their regular pay for the overtime hours worked.
| Calculation Aspect | Overtime Calculation |
|---|---|
| Basis for Calculation | Basic Salary Only |
| Normal Working Hours | 8 hours per day or 48 hours per week |
| Overtime Definition | Additional hours worked beyond the normal working hours |
| Overtime between 9.00 PM to 4.00 AM | 1.5 times the Basic Salary |
| Overtime between 4.00 AM to 9.00 PM | 1.25 times the Basic Salary |
| Non-Compensated Friday Overtimes | 1.5 times the Basic Salary |
| Holiday Overtimes with 1-day leave | 1.5 times the Basic Salary |
| Holiday Overtimes | 2.5 times the Basic Salary |
Please note that the overtime calculation is based solely on the basic salary and the rates vary depending on the overtime time and the specific circumstances.
4. Night Shift Overtime
For workers who work between 10 pm to 4 am, the overtime rate is 50% of their basic salary. This is to encourage employers to take care of workers who work night shifts.
To calculate overtime pay for workers who work between 10 pm to 4 am with a basic salary of 2500 AED in Excel for UAE, use the formula:
Overtime Pay = (Hourly Rate × Overtime Hours) + (Hourly Rate × 0.5 × Overtime Hours)
Example with 2500 AED Basic Salary:
Let’s say an employee has a basic salary of 2500 AED and hourly rate calculated based on their basic salary and total normal working hours.
The employee works 3 hours of overtime between 10 pm to 4 am:
Hourly Rate = (2500 ÷ (48 * 5)) ≈ 10.42 AED per hour
Overtime Pay = (10.42 × 3) + (10.42 × 0.5 × 3) ≈ 36.26 AED
In this example, the employee will get an additional 36.26 AED for the 3 hours of night shift overtime as per UAE Labor Law. Employers should take care of workers during night shifts by providing fair compensation as encouraged by the night rate.
5. Overtime Exemption for Shift Workers
Shift workers are exempt from overtime rules. UAE Labor Law recognizes the nature of shift work and has separate provisions for workers who work in shifts.
6. Rest Day Overtime
If an employee has to work on their rest day, they will get either a substitute rest day or pay equal to their basic salary for the working hours plus 50%. So employees who give up their days off are compensated for their sacrifice.
Overtime Pay = (Hourly Rate × Overtime Hours) + (Hourly Rate × 1.5 × Overtime Hours)
Example with 2500 AED Basic Salary:
Let’s say an employee has a basic salary of 2500 AED and an hourly rate calculated based on their basic salary and total normal working hours.
The employee works 5 hours on their rest day:
Hourly Rate = (2500 ÷ (48 * 5)) ≈ 10.42 AED per hour
Overtime Pay = (10.42 × 5) + (10.42 × 1.5 × 5) ≈ 83.36 AED
In this example, the employee will get an additional 83.36 AED for the 5 hours of overtime worked on their rest day as per UAE Labor Law.
OVERTIME UAE LABOUR LAW- WORKING HOURS AND OVERTIME RULES
Here’s the Labour LAW information presented in a table format:
| Aspect | Details |
|---|---|
| Normal Working Hours | Private sector workers: 8 hours per day or 48 hours per week, except during Ramadan when reduced by 2 hours. |
| Article 17 of UAE Labour Law | Normal working hours in the private sector are 8 hours per day or 48 hours per week. |
| Different Working Hours | Some economic sectors or worker categories may have different daily working hours as per ‘Executive Regulations.’ |
| Commuting Time | Time spent commuting to and from the workplace is not counted as working hours, except for specific worker categories. |
| Multiple Employers | Workers with multiple employers cannot be required to work more hours than agreed upon in their employment contract without written consent. |
| Remote Work | Workers who choose to work remotely must have specific working hours agreed upon with their employer. |
| Breaks | Workers have the right to breaks if they work five consecutive hours, with a minimum of one hour for breaks. Break time is not counted within working hours. |
| Overtime | Workers who exceed normal hours, not on a shift-based schedule receive normal pay + 25% (or 50% between 10 pm and 4 am). |
| Overtime Compensation | Workers who exceed normal hours, not on a shift-based schedule, receive normal pay + 25% (or 50% between 10 pm and 4 am). |
| Working on Off-Day | Workers working on their off-day receive either a substitute rest day or normal pay + 50% based on basic salary. |
| Government Entities | Government entities are not subject to the Federal Decree Law, may have different rules and regulations. |
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