Calculation of Overtime Pay in UAE - Understand Rules, Rates, and Employee Rights
11-11-2024
Introduction - Overtime Pay Calculation in UAE
In the UAE, overtime calculation is a key part of fair pay for employees who work extra hours. Whether it’s late nights, weekends, or holidays, knowing the rules around overtime calculation in UAE can make a big difference in understanding your rights and ensuring you’re paid correctly. At TimeChart, we’re here to help make this process easy, clear, and accurate.
For employees and employers, how to calculate overtime in UAE may seem complicated, but UAE Labour Law provides clear rules. Overtime calculation uses a specific formula that takes into account your basic salary and any extra hours worked. Here’s the standard formula: basic salary × 12/365/8 × total overtime hours × 1.25 = total overtime pay. This formula changes if overtime is done between 10 p.m. and 4 a.m., increasing the rate to 50%.
Why is Overtime Calculation Important?
Accurately calculating overtime pay is vital for keeping employees happy and making sure they are treated fairly under UAE law. When businesses get this right, it builds trust and boosts employee satisfaction. For example, a business using TimeChart for its payroll can easily manage overtime calculation so employees feel secure and valued. Imagine a team working on an urgent project over the weekend. With TimeChart’s overtime calculator UAE, tracking and paying for their extra work is simple and efficient.
Key Tips for Overtime Calculation in UAE
1. Know the Law: UAE Labour Law is specific about overtime calculation. Staying updated will ensure employees get the pay they deserve.
2. Use the Right Tools: With TimeChart, you can manage calculation of overtime pay in UAE accurately and effortlessly. This saves time and reduces errors.
3. Clear Communication: Make sure employees understand how their overtime calculation is done and that it's fair.
For more personalized help with tracking hours and timesheets in Dubai, Contact Our Expert today!
What is Overtime and Overtime Pay in the UAE?
In the UAE, overtime means any extra hours employees work beyond their regular schedule. According to the UAE Labour Law, overtime is paid to ensure fair compensation for this extra time and to discourage employers from overworking their employees. For most jobs, regular working hours are 8 hours a day or 48 hours a week. If someone works more than this, it counts as overtime, and they are eligible for overtime pay.
For example, if an employee works a regular 8-hour shift but stays 2 hours extra, those 2 hours are overtime. The law states that overtime pay is calculated based on the basic salary with a percentage added. This percentage can increase depending on the time of day and the number of extra hours worked. Understanding how overtime calculation in UAE works can help both employees and employers follow the law correctly.
How to Calculate Overtime in the UAE
If you’re wondering about how to calculate overtime in UAE, here’s a simple formula. The basic calculation formula for overtime is:
Basic Salary x 12 / 365 / 8 x Total Overtime Hours x 1.25 = Total Overtime Pay
So, if an employee's basic salary is AED 8,000 and they work 2 hours overtime, this formula will help the employer know how much to pay. The rate can go up to 50% more if the overtime is between 10 pm and 4 am.
UAE Labour Law for Overtime and Employee Rights
The UAE Labour Law for overtime ensures that all employees are treated fairly. Employers can ask for overtime but only for up to 2 hours extra a day. If work continues during these hours, the employees are entitled to pay at a higher rate.
Employees are also entitled to breaks if they work five hours in a row, which are not counted in working hours. During the hot summer months, workers must have a break from 12:30 pm to 3:00 pm if they’re working outside under the sun.
Use TimeChart Mobile Attendance and Payroll for Overtime Calculation in UAE
Keeping track of overtime calculation in UAE can be tricky, but TimeChart can make it easy. With TimeChart, employers can monitor each employee’s working hours, breaks, and overtime automatically. It calculates overtime following the UAE Labour Law, so there’s no need to worry about doing the math or making a mistake. This is especially helpful for businesses that have many employees or need to manage shift work, as TimeChart provides accurate and fair overtime records.
For example, a retail store in Dubai with several part-time and full-time workers uses TimeChart to track each employee’s hours. With automatic updates and precise calculations, the store easily follows the law, and employees are confident they’re getting fair pay.
Types of Overtime in the UAE
In the UAE, overtime can be broken down into two main types:
1. Force Majeure Overtime: This type happens when unexpected, urgent repairs or emergency tasks need immediate attention to avoid damage or loss. This kind of overtime is usually outside of normal working rules.
2. Structural Overtime: This applies to extra work during unexpected busy times, like work peaks or high-demand periods in a company’s operations. In the UAE, Labour Law limits how many extra hours employees can work each week, but this mainly applies to structural overtime. There is no set limit for force majeure overtime because emergencies can't be predicted.
Who is Eligible for Overtime Pay in the UAE?
Not all workers are eligible for overtime pay in the UAE. UAE Labour Law states that certain job roles, like senior managers and administrative supervisors, may not receive extra pay for overtime due to their responsibilities. Also, some industries, like marine industries, and high-level executive roles, may be excluded from overtime pay due to their nature.
Shift workers in continuous operations, like factory staff, have different rules for overtime calculation in UAE—night-time overtime may not apply to them.
The Ministry of Human Resources and Emiratisation MoHRE offers guidance on roles exempt from overtime. If your role goes beyond regular hours but is exempt, you cannot claim overtime pay for those hours.
Formula For Overtime Calculation in UAE
Calculating overtime pay in the UAE follows clear steps based on Articles 67-72 of the UAE Labour Law. Here are the main factors for overtime calculation in UAE:
Basic Salary
Number of Overtime Hours
Overtime Type: Regular, Fridays, or Public Holidays
Let's break down how to calculate overtime in UAE under different conditions.
Overtime Calculation on a Normal Working Day
For regular overtime beyond standard hours, the pay includes the regular hourly wage plus 25% extra. Here’s a simple way to calculate it:
Formula of calculation overtime pay in UAE:
Per Day Wage = Basic Salary × 12 / 365
Normal Hour Rate = Per Day Wage ÷ 8
Overtime Rate = Normal Hour Rate × 1.25
Total Overtime Pay = Overtime Hours × Overtime Rate
Example Calculation of Overtime pay:
Let’s say an employee’s monthly basic salary is AED 4,000, and they worked 50 overtime hours.
Per Day Wage = (4,000 × 12) ÷ 365 = AED 131.50
Normal Hour Rate = 131.50 ÷ 8 = AED 16.44
Overtime Rate = 16.44 × 1.25 = AED 20.55
Total Overtime Pay = 50 hours × 20.55 = AED 1,027.50
Thus, total monthly salary = Basic Salary + Total Overtime = AED 4,000 + 1,027.50 = AED 5,027.50
Overtime for Night Hours (10 PM to 4 AM)
Employees working late-night hours receive regular pay plus 50% extra for those hours, unless they’re on a shift schedule.
Formula of Calculating overtime in UAE:
Per Day Wage = Basic Salary × 12 / 365
Normal Hour Rate = Per Day Wage ÷ 8
Overtime Rate = Normal Hour Rate × 1.5
Example Overtime Calculation:
If the employee’s basic salary is AED 4,000 per month and they worked 30 night overtime hours, it would look like this:
Per Day Wage = (4,000 × 12) ÷ 365 = AED 131.50
Normal Hour Rate = 131.50 ÷ 8 = AED 16.44
Overtime Rate = 16.44 × 1.5 = AED 24.66
Total Overtime Pay = 30 hours × 24.66 = AED 739.80
Therefore, total monthly salary = Basic Salary + Total Overtime = AED 4,000 + 739.80 = AED 4,739.80
Important Note on UAE Labour Law for Overtime
UAE laws cap overtime at two hours daily unless there’s an urgent need to avoid significant loss or accidents. To stay compliant, it’s essential to track hours accurately. TimeChart’s timesheet software can make tracking overtime calculation in UAE simple, ensuring you follow all regulations without errors.
TimeChart’s tools let you input the basic salary, hours worked, and overtime hours, and then it quickly calculates the correct overtime pay, so your team is compensated fairly. Whether it’s normal, night, or holiday hours, our solution helps you with every type of overtime calculation.
Let us help you keep everything smooth and simple. Reach out to TimeChart today to ensure fair and accurate overtime pay for your team!
Overtime Pay Calculation on a Public Holiday in the UAE
In the UAE, overtime calculation on a public holiday follows specific rules set by the UAE Labour Law. Article 81 of the UAE Labour Law states that if an employee has to work on a public holiday or a rest day (for which they’re entitled to pay), the employer must provide a compensatory day off along with an extra 50% of their pay. If they don’t offer a compensatory day off, then the employee must be paid 150% of their usual rate for those hours.
Simple Overtime Formula:
Total Overtime Pay = Basic Salary × 12/365/8 × Total Overtime Hours × 1.5 (plus one compensatory day off)
Here’s an example for easy understanding. Let’s say an employee’s basic salary is AED 4,000, and they worked 10 hours on a public holiday. Here’s the overtime calculation in the UAE:
4,000 × 12/365/8 × 10 × 1.5 = AED 197.26 (for 10 hours of pay + 1 compensatory day off)
If no compensatory day off is provided, the calculation would look like this:
4,000 × 12/365/8 × 10 × 2.5 = AED 328.77
This is how UAE Labour Law protects employees by ensuring fair compensation for holiday work!
Shift Workers’ Overtime Calculation and Rules
Shift workers follow slightly different rules for overtime in the UAE. They do not receive the extra 50% pay for working between 10 pm and 4 am, but they are entitled to overtime pay for hours worked beyond their regular shift.
Shift workers can be asked to work up to two hours of overtime daily, but employers must follow UAE overtime rules when it comes to calculating additional hours, ensuring fair pay. For extra hours, shift workers are eligible to receive their basic wage plus an extra 25% or more.
Shift workers cannot exceed 144 overtime hours in a three-week period, ensuring they have proper rest and work balance.
Ramadan Working Hours and Overtime
During Ramadan, all employees in the UAE get reduced work hours. Both Muslim and non-Muslim employees work two hours less than usual. For example, in the private sector, regular hours drop from 8 to 6 per day, without affecting their salary. Any work hours beyond this reduced schedule count as overtime and must be paid with at least a 25% increase for daytime hours, or 50% for night hours (between 10 pm and 4 am).
TimeChart can help simplify these calculations and keep your company compliant, ensuring your employees are always fairly compensated. Let us help you manage your overtime calculations in the UAE, so you can focus on growing your business with peace of mind.
Common Mistakes to Avoid for Employers – Wrong Formulas for Overtime Calculation in UAE
When it comes to overtime calculation in UAE, it's really important for businesses to follow the correct formulas. While many companies make sure they do it right, some might use the wrong formulas, which can cause big problems and even legal penalties.
For example, the correct formula to find an employee's per day salary is:
Per Day Salary = Basic Salary ÷ 30 days
And if you want to find the per hour salary, you can use:
Per Hour Salary = Basic Salary ÷ 30 days ÷ 8 hours
These formulas are the right way to calculate overtime pay in UAE, ensuring that you comply with the UAE labour law for overtime.
But, some companies make the mistake of using the wrong formulas, like:
Per Day Salary = Basic Salary × 12/365
or
Per Hour Salary = Basic Salary × 12/365 ÷ 8 hours
These incorrect formulas can lead to mistakes when calculating overtime pay. That can cause a lot of trouble with employees and even with the law. It's important to get it right!
For example, if a company doesn't use the correct overtime calculation formula, employees may not get the fair overtime pay they deserve. Imagine a worker who worked 10 extra hours but wasn’t paid correctly because the formula wasn’t right. This can create frustration, damage trust, and lead to unhappy employees.
That's where TimeChart can help you! We offer an overtime calculator UAE that ensures your business follows the right calculation of overtime pay in UAE, keeping you compliant with the UAE labour law for overtime. With our simple system, you won’t have to worry about making mistakes in your overtime calculation anymore. We take the stress out of managing your employee’s overtime hours, so you can focus on running your business smoothly.
Let TimeChart make your life easier and help you stay compliant. If you're unsure about how to calculate overtime in UAE, we’re here to guide you every step of the way. Just reach out, and we’ll assist you with all your overtime needs. You can trust us to get it right!
Overtime Calculation in UAE: How Timechart Can Help You Get It Right
Understanding Overtime Calculation in UAE
If you're an employer or an employee in the UAE, it's important to know how to calculate overtime pay in UAE, because it’s a big part of your rights and responsibilities. As per the UAE Labour Law for overtime, there are clear rules on how to calculate overtime in UAE and what you're entitled to. Whether you're managing a small business or working in a large company, understanding these rules can help you avoid mistakes and ensure that you're always compliant.
With Timechart’s Overtime Calculator UAE, you can easily manage and calculate overtime, ensuring that you and your employees are paid fairly and according to the law. Timechart’s overtime calculator UAE will save you time and help you get accurate results quickly. Let’s dive into the key rules you need to know about overtime calculation.
Key Overtime Calculation Rules According to UAE Labour Law
As per the UAE Labour Law, here are the key rules for calculating overtime in UAE that every employer and employee should know:
1. Overtime Limit: Employers can ask their employees to work overtime, but the total number of overtime hours should not exceed 2 hours per day. So, it’s important to manage working hours carefully.
2. Overtime Pay: When an employee works overtime, they are entitled to receive their normal daily pay plus an additional 25% for regular overtime hours. If the overtime is done between 10 PM and 4 AM, this increases to 50%. This rule doesn’t apply to employees on shift work.
3. Working on Off Days: If you’re asked to work on your off day, the employer must give you a compensatory day off. If they can’t, they must pay an additional 50% of your usual pay for that day.
4. Breaks for Long Overtime Hours: If an employee works for 5 or more consecutive overtime hours, they must be given at least a 1-hour break. This break is not included in the overtime hours calculation.
5. Commuting Time: Time spent commuting to and from the workplace is not included in the overtime hours. So, only the actual working time matters when calculating overtime.
6. Ramadan Working Hours: During Ramadan, employees in the UAE only work 6 hours a day, instead of the usual 8 hours.
7. Exemptions: Some employees may be exempt from overtime pay. For example, senior positions or employees working in certain industries like naval ships or marine sectors are not entitled to overtime pay.
How Timechart Can Help with Overtime Calculation in UAE
Now that you know the rules, let’s talk about how Timechart’s Timesheet Software can help you manage overtime calculation in the UAE. With Timechart, you can track working hours in UAE and make sure that you’re following the UAE Labour Law for overtime.
Here’s how Timechart makes your job easier:
Easy Overtime Tracking: With Timechart, you can quickly track and calculate overtime in UAE using our overtime calculator UAE. No more guessing, no more errors.
Accurate Payroll: Timechart helps you make sure that you’re paying your employees the right amount for their overtime hours, following the rules on how to calculate overtime in UAE.
Compliant with UAE Labour Law: We ensure that your overtime calculations are always in line with the UAE Labour Law for overtime. You won’t have to worry about any legal issues or mistakes.
Saves Time and Effort: Timechart automates your overtime tracking, so you don’t have to spend time doing it manually. You can focus on growing your business instead!
Example: How Timechart Helps a Business Owner in Dubai
Imagine you run a small business in Dubai, and you have employees who occasionally work overtime. In the past, calculating overtime pay manually was time-consuming and confusing. You often worried about making mistakes, especially when it came to the extra pay for overtime hours worked late at night.
Now, with Timechart’s Timesheet Software and overtime calculator UAE, you simply enter the hours worked, and the software does the rest. It calculates the overtime pay, makes sure the calculations follow UAE Labour Law for overtime, and provides a breakdown of the pay. This saves you time, reduces stress, and ensures that your employees are always paid correctly. Plus, it helps you avoid costly mistakes!
Overtime Pay Calculation for Free Zones in UAE
Did you know that overtime calculation in UAE can vary depending on the location of your work? Employees working in free zones might have different overtime rules from those working in the mainland. It’s important to check your employment contract or consult with your free zone authority to ensure you’re getting the right pay.
At TimeChart, we help businesses manage these differences, so you never have to worry about miscalculating overtime pay again. Whether you’re in a free zone or a mainland company, we’ve got you covered!
How to File a Complaint for Overtime Pay
If you feel that your overtime pay in UAE is being wrongly calculated or not paid, you can file a complaint with the Ministry of Human Resources and Emiratisation (MoHRE). The good news is that TimeChart can help you keep accurate records of your working hours in UAE so that if you ever need to resolve a dispute, you have all the details ready.
Here’s how to file a complaint:
Submit a Complaint – Use the MoHRE website, mobile app, or visit a Tawjeeh center.
Verification – You’ll receive a one-time password (OTP) to confirm your identity.
Review – MoHRE will help mediate your dispute and resolve it within 14 days.
By using TimeChart, you’ll always have proper documentation of your overtime hours in UAE, making the complaint process much easier if needed.
Tips for Properly Documenting Overtime in UAE
Documenting your overtime hours is essential to ensure you receive the correct pay. Here’s what you need to do:
1. Record Overtime Hours Accurately: Keep track of every hour worked beyond your regular schedule, including dates, start/end times, and total hours.
2. Check Your Employment Contract: Make sure your recorded overtime follows the rules in your contract. This includes knowing the rates (such as 25% or 50% increase).
3. Take Breaks: According to the UAE labour law, you should get at least a 1-hour break after 5 consecutive hours of work.
4. Save Documents: Keep payslips, timesheets, and any communication regarding overtime. These are important for proof if a dispute arises.
TimeChart helps you automatically track all your overtime hours and keeps everything organized, so you don’t have to worry about missing records!
TimeChart – Your Overtime Helper
Whether you’re a business owner or an employee, keeping track of overtime calculation in the UAE can be tough. But with TimeChart’s overtime calculator UAE, you’ll never miss a beat! We make it easy to calculate, track, and manage your working hours in UAE, ensuring you’re always in line with UAE labour law for overtime.
If you’re managing a team or simply want to keep your overtime hours in check, TimeChart is here to help. Imagine how much easier it will be to manage your calculation of overtime pay in UAE with our simple, accurate tools.
How TimeChart Can Help Your Business
Let’s say you run a small company in Dubai, and your employees often work overtime. Without proper tools, you might struggle to calculate overtime pay in UAE accurately, leading to mistakes that could cost your business money or result in employee dissatisfaction.
With TimeChart, you can easily track overtime hours in Dubai and calculate overtime pay based on your employees’ actual hours worked. This makes payroll smoother, keeps employees happy, and ensures compliance with UAE labour law for overtime.
TimeChart Payroll – Simplified Overtime Calculation and Accurate Tracking
Calculating overtime pay correctly in the UAE can be tricky, especially with the rules around overtime calculation in UAE and how to calculate it based on the UAE Labour Law. But don’t worry—TimeChart is here to help make the whole process much easier for you and your company. Our overtime calculator UAE helps you stay on track and follow the correct procedures for calculation of overtime pay in UAE.
When you use TimeChart, you can trust that our system automatically does the hard work for you, following the UAE Labour Law for overtime and ensuring you don’t miss a thing. Whether you're a small business or a growing company, our system can easily handle all your overtime calculations as you expand.
Visit Employee Self-Service portal in Dubai UAE
Here’s how TimeChart can help with your overtime process:
1. Overtime Request Status: Employees can easily check the status of their overtime requests in the TimeChart system. This is all done under the “Attendance” section, so everyone can see if their extra hours are approved or pending.
2. Compensation Requests: Employees can ask for extra pay for overtime hours worked directly through the app, making it simple for both sides.
3. Automatic Adjustments: When employees work extra hours, TimeChart automatically tracks and adjusts their pay. These adjustments are shown for review, so there's no confusion.
4. Custom Pay Categories: Employers can set up special pay categories for things like bonuses, commissions, or overtime, adding flexibility to salary management.
5. Employee Control: Employees can view their overtime hours, accept or reject them directly through the app. This puts the control right in their hands.
6. Overtime Policy Setup: Employers can easily set up an overtime policy that fits their business, ensuring that every extra hour worked is accurately tracked and paid.
7. Scheduling Overtime: Admins can plan overtime in advance, and employees can choose to accept or reject the overtime request directly from their phone.
For example, let’s say a company has 50 employees and they’re growing. Managing overtime manually would be tough, but with TimeChart, the overtime calculation becomes automated. Employees can see their extra hours, request compensation, and it’s all calculated accurately following the UAE Labour Law for overtime. It’s a smooth process that saves time and reduces errors.
If you’re feeling unsure about how to manage overtime or need help with setting up policies, our team at TimeChart is ready to assist. With TimeChart, you can confidently manage overtime calculations without the stress. We’re here to ensure everything is done correctly, helping your company stay compliant and organized.
Let TimeChart make overtime calculation in UAE easy for you and your employees.
Reach out today to see how we can help your business run smoother and smarter.
Conclusion - Overtime Pay Calculation in UAE
When it comes to overtime calculation in UAE, it’s really important to get it right. If you don’t, it could lead to problems for both employers and employees. With the right tools like Timechart, you can easily calculate overtime pay in UAE and make sure everything follows the UAE labour law for overtime.
For example, let’s say a company has employees working beyond the regular hours. With Timechart, you can quickly calculate how to calculate overtime in UAE. This helps ensure workers are paid fairly for extra time worked, based on the correct overtime calculation formula. By using our overtime calculator UAE, you won’t miss any important details, and it will save both time and effort for employers.
It's always best to know the rules and rates set by UAE labour law for overtime so you can avoid confusion or errors when paying overtime. Timechart makes it simple and clear, helping businesses stay compliant while making sure employees get what they deserve.
So, whether you’re a business owner or an employee, Timechart can help you easily manage overtime calculations in UAE. It's the best way to make sure everything is fair and accurate.
FAQs About Overtime Calculation in UAE
What is the formula to calculate overtime pay in UAE?
The calculation of overtime pay in UAE is simple. You can use this formula:
Basic salary × 12/365/8 × total overtime hours × 1.25 = total overtime pay.
This helps you calculate how much extra you will earn for working beyond the regular hours. TimeChart’s overtime calculator UAE can do this calculation for you, making it quick and easy.
How to calculate overtime pay in UAE?
To calculate your overtime pay in UAE, you first need to know your basic salary. Then, you can use the formula mentioned above, or use TimeChart’s overtime calculator UAE. This will give you an accurate amount that you should be paid for working overtime.
What is 1.25 overtime?
1.25 overtime means you earn 25% more than your normal pay for working extra hours. So, if your regular hourly rate is $10, for overtime, you would earn $12.50 per hour (because $10 × 1.25 = $12.50). This is the typical overtime rate in the UAE unless stated otherwise by your contract.
Is overtime calculated on basic or gross salary?
In the UAE, overtime calculation is done on your basic salary, not your gross salary. Your gross salary includes things like bonuses and allowances, but overtime is only based on the basic amount.
What can an employee do if the overtime is not compensated?
If your overtime hours aren’t paid, you can file a complaint with the Ministry of Human Resources and Emiratisation (MoHRE). They will help resolve the issue and make sure your rights are protected. TimeChart can help you track all your hours, so you don’t miss any overtime.
Is forced overtime legal in the UAE?
In the UAE, unless agreed upon in your contract, employers cannot force you to work overtime. However, if your job contract includes this, you may be required to work extra hours when needed.
Is lunch break included in working hours in UAE?
No, lunch breaks are not considered working hours in the UAE. Your lunch break is separate and will not be counted towards the total hours worked for overtime calculations.
What categories are exempted from overtime payment?
Some employees, like board members or those in management roles, may not receive overtime pay under UAE labour law for overtime. However, if you're working in a regular role, overtime pay applies.
Can you refuse to work overtime?
Yes, employees can refuse overtime if it’s not part of their contract. However, employers can still ask you to work up to 2 extra hours each day as part of regular overtime hours.
What are the minimum and maximum overtime hours per day?
The maximum overtime in the UAE is 2 hours per day. The law doesn't specify a minimum, but employees should not be asked to work more than the legal overtime limits.
Who is entitled to overtime pay in the UAE?
Most employees in the UAE are entitled to overtime pay if they work beyond the standard 8 hours a day or 48 hours a week. However, senior roles or those in certain industries might be exempt.
How is overtime paid during public holidays?
Employees working on public holidays in the UAE are entitled to either a substitute day off or 150% of their basic salary as overtime pay.
What is the maximum allowable overtime?
Overtime in the UAE is capped at 2 hours per day and can’t exceed 144 hours over three weeks.
Do shift workers receive overtime pay for night-time work?
Shift workers do not get extra pay for working between 10 pm and 4 am, but they are still entitled to 25% extra for overtime hours.
What happens if employees refuse to work overtime?
Employees can refuse overtime if it's not part of their contract, but if it's part of the job, refusal may not be an option. Employers should follow legal guidelines, such as providing compensation for overtime hours.
How is overtime paid during Ramadan?
During Ramadan, working hours are reduced, and any overtime worked is still compensated. The overtime pay remains 25% extra for daytime hours and 50% extra for nighttime hours (between 10 pm and 4 am).
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