Working extra hours is common in the UAE, but getting paid correctly for that time isn’t always straightforward. Whether you’re an employee wondering if your overtime pay is correct or an employer trying to stay compliant with labor laws, understanding overtime calculation is essential.

Overtime refers to any work done beyond your regular working hours as defined by UAE labor law or your employment contract. In the UAE, this typically means anything over 8 hours per day or 48 hours per week. The country’s labor law ensures employees get compensated fairly for putting in extra time, with rates ranging from 25% to 150% above normal pay depending on when you work.

The rules changed significantly with the new UAE Labor Law (Federal Decree-Law No. 33 of 2021) that took effect in February 2022. While the basic overtime rates stayed mostly the same, there were updates to maximum limits, eligibility criteria, and calculation methods. Getting these calculations wrong can lead to disputes, fines for employers, and financial losses for employees.

Overtime Rates and Calculation Formula

The UAE mandates specific rates for different types of overtime work. These aren’t suggestions – they’re legal minimums that every employer must follow.

Standard Overtime Rates:

Type of Overtime	Additional Payment	Total Payment	When It Applies
Regular Overtime	25% extra	125% of hourly rate	Work beyond 8 hours on normal working days
Night Work Overtime	50% extra	150% of hourly rate	Work between 9 PM and 4 AM
Rest Day/Friday Work	50% extra	150% of hourly rate	Work on weekly rest day
Public Holiday Work	150% extra	250% of hourly rate	Work on official public holidays

Basic Calculation Formula:

First, you need to find your hourly rate:

• Hourly Rate = Basic Monthly Salary ÷ 30 ÷ 8

Then apply the overtime multiplier:

• Overtime Pay = Hourly Rate × Overtime Hours × Applicable Rate (1.25, 1.50, or 2.50)

Important note: Only basic salary is used for overtime calculation. Housing allowance, transportation, and other benefits aren’t included. If your salary is AED 6,000 (AED 4,000 basic + AED 2,000 allowances), overtime is calculated on AED 4,000 only.

UAE Labor Law on Overtime

The current overtime regulations come from Federal Decree-Law No. 33 of 2021, specifically Articles 19 through 21. Here’s what the law actually says:

Article 19 establishes that normal working hours cannot exceed 8 hours daily or 48 hours weekly. During Ramadan, working hours are reduced by 2 hours daily for all employees. The employer can choose to implement a 5-day or 6-day work week, as long as total hours don’t exceed 48.

Article 20 covers overtime payment. Any work beyond normal hours qualifies for overtime pay at 125% of normal wage (25% extra). If overtime happens between 9 PM and 4 AM, the rate increases to 150% (50% extra). The law also sets limits – overtime cannot exceed 2 hours per day unless absolutely necessary for preventing loss or damage.

Article 21 addresses work on rest days and holidays. If you work on your designated weekly rest day (usually Friday), you either get another day off or receive 150% pay. For public holidays, you get your regular pay plus an additional 150%, totaling 250% for that day.

The law requires employer and employee agreement for overtime work – your boss cannot force you to work overtime regularly. However, in emergencies or unusual circumstances, refusal might have consequences. The annual overtime limit is 144 hours, though this can be exceeded with MOHRE approval for specific projects or seasonal work.

Standard Working Hours in UAE

Understanding standard hours is crucial because overtime only kicks in once you exceed these limits.

Regular Working Hours:
The standard is 8 hours per day and 48 hours per week. This can be distributed as:

• 6 days × 8 hours = 48 hours
• 5 days × 9.6 hours = 48 hours (many companies do 9 hours for 5 days, slightly under the limit)

Employers can increase daily hours to 9 for certain jobs (hotels, cafeterias, security), but must ensure weekly hours don’t exceed 48 on average over 3 weeks.

Ramadan Hours:
During Ramadan, working hours reduce to 6 hours daily (or 36 hours weekly). This applies to all employees regardless of religion. Overtime during Ramadan starts after 6 hours, not 8. Some companies maintain regular hours but compensate with overtime pay for the extra 2 hours.

Break Time Rules:
Employees cannot work more than 5 consecutive hours without a break. Break time isn’t counted as working hours. Meal breaks, prayer breaks, and rest periods don’t count toward your 8-hour day. If your company gives a 1-hour lunch break, you’re at work for 9 hours but working for 8.

Shift Work Considerations:
Shift workers follow the same total hours but distributed differently. Night shift workers (majority of work between 9 PM and 4 AM) already get compensated through shift allowances, but overtime beyond regular shift hours still applies.

Who is Eligible for Overtime Pay?

Not everyone who works extra hours gets overtime pay. The law covers most employees but has specific exceptions.

Eligible Employees Include:

General workers and staff in private sector companies form the bulk of eligible employees. This covers everyone from office clerks to factory workers, salespeople to technicians. If you’re on a standard employment contract and don’t fall into exempt categories, you’re entitled to overtime pay.

Contract workers and temporary staff also qualify if they’re working under standard employment terms. Part-time employees get overtime once they exceed their contracted hours, though the calculation might differ based on their base hours.

Supervisors and team leaders typically qualify unless they have significant managerial authority. The key test is whether you have power to hire, fire, or make major decisions. Leading a small team while doing regular work doesn’t disqualify you from overtime.

Free zone employees depend on their specific free zone regulations. Most free zones mirror mainland UAE rules, but DIFC and ADGM have their own employment laws with different overtime provisions. Check your free zone’s specific regulations.

Government employees follow different rules under their respective human resources laws. Federal and local government workers often have different overtime structures, sometimes involving time off instead of extra pay.

Who is NOT Entitled to Overtime?

The law specifically excludes certain categories from overtime provisions.

Senior Executive Positions:
Board members, CEOs, and senior executives who have authority over company operations don’t get overtime. This typically means C-suite positions (CEO, CFO, CTO) and others with comparable authority. The test is actual authority, not just title – calling someone “Vice President” doesn’t automatically exempt them.

Managerial Staff with Special Authority:
Department heads and senior managers who can make significant decisions about hiring, budgets, and operations usually don’t qualify. However, the exemption requires genuine managerial authority. A “manager” title alone doesn’t disqualify you if you don’t have real decision-making power.

Special Categories:

Domestic workers follow separate regulations under the Domestic Workers Law. While they have protection for excessive hours, standard overtime calculations don’t apply.

Maritime crew and aviation staff operate under international conventions and separate regulations due to the nature of their work. Their compensation structures are different from standard employment.

Family business employees working for first-degree relatives (parents, children, siblings) aren’t covered by overtime rules, assuming genuine family relationship and business structure.

Traveling salespeople and employees paid purely on commission basis might be excluded if their contracts specify different compensation structures. However, if they receive a base salary plus commission, overtime rules typically apply to the base salary portion.

Step-by-Step Overtime Calculation

Let’s walk through actual calculations to make this clear.

Example 1: Regular Overtime

Ahmed works as an accountant with a total salary of AED 9,000 (Basic: AED 6,000, Allowances: AED 3,000). He worked 3 extra hours on Tuesday.

Step 1: Calculate hourly rate

• Use only basic salary: AED 6,000
• Daily rate: 6,000 ÷ 30 = AED 200
• Hourly rate: 200 ÷ 8 = AED 25

Step 2: Apply overtime rate

• Regular overtime = 125% of normal rate
• Overtime hourly rate: 25 × 1.25 = AED 31.25

Step 3: Calculate total overtime pay

• 3 hours × 31.25 = AED 93.75

Example 2: Friday Work

Sarah, a retail supervisor, has a basic salary of AED 4,500. She worked 8 hours on Friday (her rest day).

Step 1: Calculate hourly rate

• Daily rate: 4,500 ÷ 30 = AED 150
• Hourly rate: 150 ÷ 8 = AED 18.75

Step 2: Apply Friday rate

• Friday work = 150% of normal rate
• Friday hourly rate: 18.75 × 1.50 = AED 28.125

Step 3: Calculate total pay

• 8 hours × 28.125 = AED 225

Example 3: Public Holiday Work

Mohammed, a hotel receptionist with AED 3,500 basic salary, worked on UAE National Day.

Step 1: Calculate daily rate

• Daily rate: 3,500 ÷ 30 = AED 116.67

Step 2: Apply holiday rate

• Public holiday = 250% of normal rate
• Holiday daily rate: 116.67 × 2.50 = AED 291.67

This means Mohammed gets his regular daily pay plus an additional 150% for working the holiday.

Example 4: Combined Overtime (Night + Extra Hours)

Fatima, a nurse with AED 8,000 basic salary, worked from 8 PM to 6 AM (10 hours, with 9 PM-4 AM being night hours).

Step 1: Calculate hourly rate

• Hourly rate: (8,000 ÷ 30) ÷ 8 = AED 33.33

Step 2: Break down the hours

• 8 PM to 9 PM: 1 hour regular overtime (125%)
• 9 PM to 4 AM: 7 hours night overtime (150%)
• 4 AM to 6 AM: 2 hours regular overtime (125%)

Step 3: Calculate each component

• 1 hour × 33.33 × 1.25 = AED 41.66
• 7 hours × 33.33 × 1.50 = AED 349.97
• 2 hours × 33.33 × 1.25 = AED 83.33

Total overtime pay: AED 474.96

Example 5: Ramadan Overtime

During Ramadan, Ali (basic salary AED 5,000) worked 8 hours instead of the required 6.

Step 1: Calculate hourly rate

• Hourly rate: (5,000 ÷ 30) ÷ 8 = AED 20.83

Step 2: Identify overtime hours

• Ramadan working hours: 6 hours
• Actual worked: 8 hours
• Overtime: 2 hours

Step 3: Calculate overtime

• 2 hours × 20.83 × 1.25 = AED 52.08

Common Calculation Mistakes to Avoid:

Many employees include their full salary package when calculating overtime, but only basic salary counts. If your total package is AED 12,000 with AED 7,000 basic, calculate using AED 7,000 only.

Using 30 days for monthly calculation is standard regardless of the actual days in the month. Don’t use 31 for January or 28 for February – always divide by 30.

Rounding should be done at the final step, not intermediate calculations. Keep decimals throughout and round the final amount to nearest fils.

Conclusion

Overtime calculation in the UAE follows clear legal guidelines designed to protect employee rights while allowing business flexibility. The key points to remember: only basic salary counts for calculations, different rates apply for different situations, and there are maximum limits to prevent exploitation.

For employees, keeping track of your overtime hours and understanding these calculations helps ensure you’re paid correctly. Document your extra hours, get approvals in writing when possible, and check your salary slips against these formulas. If discrepancies arise, raise them with HR first, then MOHRE if necessary.

For employers, proper overtime management isn’t just about legal compliance – it’s about maintaining workforce morale and productivity. Clear policies, accurate tracking systems, and timely payment build trust and avoid disputes that can damage your business reputation.

The UAE continues updating its labor laws to balance worker protection with economic growth. While overtime rates have remained stable, enforcement has strengthened, and digital systems make tracking easier. Whether you’re working extra hours or managing those who do, understanding these rules helps everyone get what they’re entitled to under the law.

Remember that while this guide covers standard situations, specific industries or employment types might have variations. When in doubt, consult your employment contract, company HR policies, or seek clarification from MOHRE through their hotline (600665) or website (mohre.gov.ae).