If you’ve recently arrived to work in the United Arab Emirates (UAE), you may be wondering about overtime pay. This topic is important to understand if you’re budgeting for your new life in a city like Dubai. Put simply, if you work longer than the typical hours, you’re entitled to extra compensation. However, as clear-cut as the idea is, actually calculating what you’re owed may not always be so straightforward.
At Remitly, we’re committed to providing immigrants with the information they need as they transition to life in a new country. This article will show newly-arrived workers in the United Arab Emirates everything that they should know when it comes to their legal rights to overtime compensation and how to calculate it.
Overtime in the UAE
As in most other countries, employers in the UAE may ask you to work beyond the normal hours of a typical full-time job. This may be due to staffing shortages, deadlines, or abnormally high volumes of work.
While this may be more common in some fields than others, it’s important to remember that, as in most other countries, all workers are entitled to extra pay during these extended hours. Labour law in the UAE makes this very clear and provides specific methods for calculating exactly how much you are owed for your time.
Why accurately calculating overtime is so important
Knowing how to accurately compute your overtime compensation is incredibly important for a few reasons:
- Employer-employee trust: Knowing that your employer is accurately calculating your pay is an important piece of the worker-company relationship. If you know that your company is calculating your wage correctly and consistently, this builds trust between both parties.
- Knowing your own worth: As a worker, it’s imperative that you know you are being fairly compensated for your time and efforts. Being able to calculate your overtime pay for yourself means that you will know for yourself the value of your work and what to expect on your next pay cheque.
- Labour law compliance: Finally, being sure of how to compute the amount of overtime pay that you’re owed is crucial if something has happened with your pay. This is especially important if the expected payment numbers continually fail to match what you have been paid. In that case, you will feel more empowered to take your data to the Ministry of Human Resources and Emiratisation to file a complaint.
Overtime in the labour laws of the UAE
The Ministry of Human Resources and Emiratisation (MoHRE) is the government body responsible for labour law and workers’ rights. It is in charge of handling and mediating any complaints filed by workers against their employers, including overtime. The labour laws of the UAE, specifically Article 17 of the Federal Decree Law No. 33 of 2021, state that 48 hours per week (8 hours per day) is the standard working schedule in the country.
Overtime comes into effect when the worker is asked to work more than 48 hours, and the amount paid to the employee can change according to the nature of the request. It also changes depending on the time of day that you are asked to do overtime work, as well as if it occurs on a contracted break day or holiday.
As an example of how holidays can affect overtime expectations, the normal working time is reduced by two hours per day during the month of Ramadan.
Understanding overtime pay
Having discussed overtime in the UAE and its importance, learning how to compute overtime pay in the UAE is the next step. We’ll also take a look at some factors which can change how overtime is paid out.
What exactly is overtime pay?
“Overtime pay” is defined as the extra money paid to a worker who has worked more than their normal working hours. As mentioned before, “normal working hours” in the UAE are 48 hours per week or 8 hours per day. If you are asked by your employers to work more than this, you’re entitled to a pay increase of at least 25% or 50% for the extra hours. While this seems pretty straightforward, there are a few factors to consider when calculating your expected overtime pay.
“Planned” vs “emergency” overtime pay
When it comes to overtime, an important distinction between “planned” and “emergency” overtime has to be made in order to properly calculate the necessary payment.
- Planned: “Planned” overtime refers to hours that are able to be scheduled and foreseen. “Planned” overtime may also be referred to as “regular” overtime. These extended hours may be due to being in a particularly busy time of the year, or planning for a project which needs to run longer than would be normal. Planned overtime is compensated with an additional 25% of the worker’s pay for the hours worked.
- Emergency: On the other hand, so-called “emergency” overtime happens when a need for more hours is not foreseen. In particular, this unexpected overtime will usually require employees to work between the hours of 10:00 PM and 4:00 AM, on contracted days off, or on holidays. This kind of overtime is paid out at an extra 50% of the worker’s typical pay for the overtime hours.
The rules behind calculating overtime pay
Though it can seem a bit daunting, you can actually calculate the overtime pay you are entitled to in a few easy steps. After doing it a few times, performing overtime calculations in the UAE as per the labour laws will come quickly and easily.
Steps for calculating overtime in the UAE
- Calculate your daily wage. In order to calculate your daily wage you’ll first need to know your exact monthly payment. We then multiply your monthly payment by 12 to get the yearly salary. Once we know the yearly salary, you’ll need to then divide this figure by 365 to know your daily earnings.
- Determine the hourly wage. When you know your daily earnings, this can then be divided by eight to calculate your hourly wage.
- Compute your overtime pay. Once you have your hourly wage, you’ll need to calculate how much money you are owed for your overtime hours. To do this, multiply your hourly wage by the applicable overtime rate (1.25 for planned overtime or 1.50 for emergency overtime) and multiply the resulting figure by the number of overtime hours worked.
Example overtime calculation
To see how the calculation works in practice, let’s look at an example. Imagine a worker who typically makes 3600 AED per month, who has worked 50 hours of planned overtime for this month.
Calculate their daily wage. Multiply the monthly salary (3600 AED) by 12 for the yearly salary, divided by 365.
3600 x 12 = 43,200 AED per year
43,200 / 365 = 118.36 AED per day
Calculate their hourly wage. Divide the daily wage by eight, the maximum hours worked.
118.36 / 8 = 14.80 AED per hour
Calculate their overtime pay. Start by multiplying their hourly wage by 1.25, the overtime rate for regular or planned overtime, to get the overtime wage. After that, multiply the overtime wage by 50, the number of overtime hours worked, to get the worker’s overtime pay.
14.80 x 1.25 = 18.5 AED
18.5 x 50 = 925 AED
So, we now know that our worker’s 50 hours of planned overtime should be compensated with 925 AED. If we add that to their normal monthly salary of 3600 AED, then we know that the worker’s next payment should be 4525 AED.
Considerations for public holidays
It’s important to note that the emergency overtime rate also applies to public holidays, weekends, or any other days which you may have listed as days off in your contract. If your employer is able to give you another day off in order to make up for this missed rest day, they may do so. If not, you will also need to be compensated for the missed day off. This means that your overtime rate for the hours worked on that day will need to be 2.5 rather than 1.5.
Another consideration to keep in mind is the month of Ramadan. The Ministry of Human Resources and Emiratisation has decreed that the normal working hours during the month of Ramadan should be six hours per day. As such, when calculating your hourly wage for any overtime worked during this month, the daily wage should be divided by six rather than eight.
What the UAE’s labour laws actually say about overtime
While performing these calculations may be simple, it’s important to know your rights as a worker in the UAE when it comes to overtime. As mentioned before, the Ministry of Human Resources and Emiratisation (MoHRE) is charged with handling any disputes between workers and their employers, but they must follow and uphold any Federal Decrees made by the government of the United Arab Emirates.
Staying on top of the rules and regulations
The MoHRE website contains all rules and regulations regarding work and employment in the UAE. Separate tabs allow workers and employers to understand their rights and obligations, and the full text of all labour laws can be found on the Laws & Regulations page. Updates and explanations can also be found there. Some cities, such as Abu Dhabi, also explain workers’ rights on the website of their Residents Office.
Understanding MoHRE Guidelines
The MoHRE should be your go-to source for all topics related to labour and employment rights in the UAE. Their website features a helpful list of guidelines and important topics for workers. Regarding overtime, here are a few more in-depth points that should not be overlooked:
- Overtime limits: In total, working hours should never exceed 144 hours in a given three-week period.
- The two-hour rule: Though it does depend on the work you do, most people should not be asked to work for more than two extra hours per day. The exception to this is in cases in which the extra work is necessary to prevent or lessen the impact of serious loss or accidents.
- Worker exceptions: Some workers, such as the members of boards of directors, people with the power of the employer, and those with preparatory or complementary jobs that are necessary for the general function of a business, are examples of some of these roles. More information about them can be found in Article 15 of the Implementing Regulation of Federal Decree Law No. 33 of 2021.
- Weekends: Employers should not ask you to work more than two weekend days in a row. Day workers are an exception to this rule.
- Ramadan: The two-hour reduction in normal working hours for Ramadan applies to those people who are fasting as well as those who are not observing the fast.
Knowing your rights as an employee will help you have a smooth and enjoyable transition to life and work in the UAE. Other topics you might be interested in include how to calculate your leave pay, understanding the UAE’s salary payment system, and understanding the UAE’s labour laws.
FAQs
How do I calculate the pay for five hours of overtime?
Calculating 5 hours of overtime will depend on how much you make each month. The quick and simple way to calculate 5 hours of regular/planned overtime would be as follows:
(Monthly salary x 12) / 365 = daily wage
(Daily wage / 8) x 1.25 x 5 = overtime pay
What is the percentage overtime calculation?
The overtime pay rates, as laid out in the labour laws of the UAE, are often expressed in percentages. Specifically, they refer to increases of “not more than” 25% or 50%. This means that you will be paid your normal salary for the overtime hours that you worked as well as an extra 25% or 50% of your salary during that time.
In the formula shown above, these percentages are most easily calculated by multiplying the number of overtime hours that you worked by the overtime rate of 1.25 or 1.50.
Who should I speak with if my overtime pay was not applied properly?
Payroll specialists and human resources professionals at your company should be your first point of contact to discuss any discrepancies regarding payroll. If you believe you are owed more money than you were paid and your employer does not pay out, you should file a complaint with the MoHRE. They will help to mediate the dispute between you and your employer.