Overtime Calculation In UAE can be done by This Overtime Calculator 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 Do Overtime Calculation in UAE According to UAE Labor Law?
In the bustling corporate landscape of the United Arab Emirates (UAE), understanding the rules governing overtime calculation is crucial for employers and employees. The UAE Labor Law provides comprehensive guidelines on calculating overtime, ensuring fair compensation for employees who put in extra hours beyond the standard workweek. In this blog post, we will delve into the intricacies of overtime calculation in the UAE, shedding light on the rules and regulations that govern this important aspect of labour relations.
1. What is Overtime?
Overtime refers to the additional work hours an employee puts in beyond the regular working hours stipulated by their employment contract. The UAE Labor Law specifies the maximum number of overtime hours allowed in a day, ensuring the well-being of workers and preventing exploitation.
2. Maximum Overtime Hours
According to the UAE Labor Law, the maximum number of overtime hours an employee can work in a day is two. Employers cannot request or require employees to work beyond this limit, except in exceptional cases where there is a critical need, such as unforeseen emergencies.
3. Calculating Overtime Pay
The UAE Labor Law has a fair and standardized approach to calculating overtime pay. Employees who work overtime are entitled to their regular remuneration for the normal working hours, which is based on their basic salary. Additionally, they must receive an extra payment of 25% of their regular remuneration for the overtime hours worked.
Sure, here’s the information presented in a table format:
| 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 employees who work between the hours of 10 pm and 4 am, the overtime pay rate increases to 50% of their regular remuneration. This nighttime rate encourages employers to prioritize the well-being of workers who undertake late-night shifts.
To calculate overtime pay for employees working between 10 pm and 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 consider an employee with a basic salary of 2500 AED and an hourly rate calculated based on their basic salary and total normal working hours.
Assume the employee works 3 hours of overtime between 10 pm and 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 would receive an additional 36.26 AED for the 3 hours of late-night overtime, as per the UAE Labor Law guidelines. Employers should prioritize the well-being of workers during late-night shifts by providing fair compensation as encouraged by the nighttime rate.
5. Overtime Exemption for Shift Workers
It’s essential to note that shift workers are exempt from the rules governing overtime pay. The UAE Labor Law recognizes the unique nature of shift-based jobs and has separate provisions for compensating employees who work in shifts.
6. Rest Day Overtime
Suppose circumstances necessitate an employee to work on their designated rest day. In that case, they are entitled to receive either a substitute rest day or a pay equal to their regular remuneration for the working hours, along with an additional 50%. This ensures that employees who give up their days off are adequately compensated for their dedication.
Overtime Pay = (Hourly Rate × Overtime Hours) + (Hourly Rate × 1.5 × Overtime Hours)
Example with 2500 AED Basic Salary:
Let’s consider an employee with a basic salary of 2500 AED and an hourly rate calculated based on their basic salary and total normal working hours.
Assume the employee works 5 hours on their designated 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 would be entitled to receive an additional 83.36 AED for the 5 hours of overtime worked on their rest day, as per UAE Labor Law guidelines.
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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. |
Conclusion
In conclusion, understanding overtime calculation according to the UAE Labor Law is crucial for maintaining a fair and harmonious work environment. Employers must adhere to the specified rules to ensure their employees receive just compensation for their efforts. Likewise, employees should know their rights and entitlements concerning overtime pay to safeguard their well-being and ensure they are treated fairly. By following the guidelines outlined in the UAE Labor Law, businesses and workers can build a stronger, more equitable foundation for the UAE’s thriving corporate landscape.
More calculators for UAE: “UAE VAT CALCULATOR” | “UAE ZAKAT CALCULATOR” | “CALCULATE GPA“
FAQ:
What is the formula for overtime in the UAE?
Overtime Pay = (Basic Salary ÷ 48) × Overtime Hours × Overtime Rate
Example: Let’s say an employee with a basic salary of 2500 AED is asked to work 3 hours of overtime on a weekday at a rate of 1.5 times the basic salary:
Overtime Pay = (2500 ÷ 48) × 3 × 1.5 = 93.75 AED
In this example, the employee would be entitled to receive an additional 93.75 AED for the 3 hours of overtime worked.
How is overtime salary calculated in Dubai?
Overtime salary in Dubai is calculated using the formula: Overtime Pay = (Basic Salary ÷ Total Normal Working Hours) × Overtime Hours × Overtime Rate. The Overtime Rate varies based on the specific circumstances, such as the time of day and the nature of the overtime work.
What is the formula for calculating overtime?
The formula for calculating overtime is: Overtime Pay = (Hourly Rate × Overtime Hours) + (Hourly Rate × 1.5 × Overtime Hours for hours exceeding normal working hours per day/week). The overtime rate of 1.5 is applied to the additional hours beyond the standard working hours.
How to calculate overtime in Excel UAE?
To calculate overtime in Excel for UAE, use the formula: Overtime Pay = (Hourly Rate × Overtime Hours) + (Hourly Rate × 1.5 × Overtime Hours for hours exceeding normal working hours per day/week). Replace “Hourly Rate” with the employee’s hourly wage and “Overtime Hours” with the number of hours worked beyond the standard working hours.
