How to Calculate Overtime in the UAE: Rates, Formula, and Rules

Overtime may seem like a straightforward extra-hours calculation, but HR needs to consider basic salary, normal working hours, night work, rest days, public holidays, Ramadan hours, and employee eligibility.

Incorrect overtime calculations in the UAE can lead to payroll errors, employee grievances, and compliance issues.

For most private-sector employees covered by Federal Decree Law No. 33 of 2021, normal working hours are eight hours per day or 48 hours per week.  

The UAE Government’s guidance on private-sector working hours also includes details on schedules and overtime. 

In short, UAE overtime is paid at the basic hourly wage plus at least 25%, rising to at least 50% for work between 10 PM and 4 AM, while rest day and public holiday work earns a substitute rest day or a day’s wage plus at least 50%. 

This guide covers the key UAE overtime calculation rules, formulas, examples, and payroll checks that employers need. 

Who is Covered by UAE Overtime Rules? 

The federal Labour Law generally applies to employers and employees in the UAE private sector.  

Certain groups, including government employees, armed forces, police and security personnel, and domestic workers, are governed separately under other legislation, as outlined in the UAE Federal Labour Law.  

Free zone rules also need attention. Most free zone employees are generally covered by the federal framework, while DIFC and ADGM operate under their own employment regulations.  

Therefore, employers should clarify the applicable jurisdiction before using a federal overtime formula, particularly when managing employees across different UAE entities. 

UAE Overtime Rates at a Glance 

How is Overtime Calculated in the UAE? 

The UAE overtime calculation formula begins with the employee’s basic salary. 

Basic hourly wage = Basic monthly salary ÷ 30 ÷ 8 

Then apply the applicable overtime multiplier. 

For ordinary overtime, Article 19 requires the normal hourly remuneration plus at least 25%, giving a minimum 1.25 multiplier. 

The same calculation approach is outlined in MOHRE’s Additional Working Hours, Wages and Leaves Guide. 

Example of Ordinary UAE overtime calculation 

Suppose an employee earns: 

Basic salary: AED 8,000 

Overtime: 2 hours 

Basic hourly wage: 

AED 8,000 ÷ 30 ÷ 8 = AED 33.33 

Overtime: 

AED 33.33 × 2 × 1.25 = AED 83.33 

Thus, the minimum payment for those two ordinary overtime hours is AED 83.33. The calculation uses the unrounded hourly wage, and the final amount is rounded. 

Is UAE Overtime Calculated on Basic Salary or Total Salary? 

Overtime is based on the employee’s basic wage, not the entire salary package. 

For example: 

Basic salary: AED 6,000 

Allowances: AED 4,000 

Total salary: AED 10,000 

The overtime calculation starts with AED 6,000. 

AED 6,000 ÷ 30 ÷ 8 = AED 25 basic hourly wage 

For two ordinary overtime hours: 

AED 25 × 2 × 1.25 = AED 62.50 

Article 19 of the Labour Law ties overtime pay to the basic wage. Employers can review the official UAE Labour Law text for the underlying provision. 

That’s why a payroll system should clearly separate basic salary from allowances. 

What is the UAE Night Overtime Rate? 

Overtime performed between 10 PM and 4 AM is paid at the normal hourly wage plus at least 50%, a minimum multiplier of 1.5. This provision does not apply to shift workers. 

Night overtime example 

Using a basic salary of AED 8,000: 

Basic hourly wage = AED 8,000 ÷ 30 ÷ 8 = AED 33.33 

For three qualifying night overtime hours: 

AED 33.33 × 1.50 × 3 = AED 150 

HR should therefore check the actual working time and whether the employee falls under the shift worker exception before applying the night rate. 

What Happens When Employees Work on Their Weekly Rest Day? 

When an employee works on the designated weekly rest day, the employer must generally provide either a substitute rest day or payment at the normal working day rate plus at least 50% of the basic wage for that day. 

This implies that rest day work is not automatically to be counted as normal 1.25 overtime. Payroll should define the type of working day and then use the appropriate compensation method specified in the Labour Law. 

Rest day example: With a basic salary of AED 6,000, the daily wage is AED 200. If the employer pays instead of granting a substitute rest day, the minimum payment is AED 200 plus 50% of AED 200 (AED 100), which is AED 300 for the day. 

How is Overtime Calculated for a Public Holiday in the UAE? 

Public holiday work follows a separate rule under Article 28.  

According to the UAE Government’s official leaves and vacations page, an employee required to work on an official public holiday must receive either a substitute day off or a normal day’s wage plus at least 50% of the basic wage for that day. 

Public holiday pay example: With a basic salary of AED 6,000, the daily wage is AED 6,000 ÷ 30 = AED 200. If the employer pays instead of granting a substitute day, the minimum payment is AED 200 + AED 100 (50% of AED 200) = AED 300 for the day worked. 

Employers should configure public holiday calculations separately rather than treating every additional hour as standard overtime. 

How Much Overtime Can Employees Work in the UAE? 

Generally, Article 19 permits employers to require up to two extra hours of work each day, subject to the exceptions outlined in the law. 

The MOHRE Implementing Regulation further states that employees may work no more than 144 total hours during any 3-week period (with specific exceptions).  

For HR, this means overtime should be monitored as both a payroll issue and a working-time compliance issue. 

Does Ramadan Affect UAE Overtime Calculations? 

Yes. During Ramadan, each employee works 2 hours less per day but does not lose their normal wage. 

The UAE Government’s Ramadan guidance confirms that the reduced working hours apply to Muslim and non-Muslim employees. 

Under Cabinet Resolution No. 1 of 2022, work beyond the reduced Ramadan hours is treated as overtime, and the two-hour daily overtime limit still applies.  

For example, if an employee’s Ramadan schedule is six hours, the seventh and eighth hours are paid at the applicable overtime rate, not the normal rate.  

Payroll teams should update the working schedule before Ramadan starts so the formula is applied to the correct normal hours. See this explanation of Ramadan working hours and overtime for more. 

Which Employees May Have Different Overtime Rules? 

Certain categories are excluded from some maximum working-hour provisions under the Implementing Regulation.  

These include certain senior supervisory roles, members of boards of directors, certain seafarers, some continuous technical operations, and certain preparatory or complementary work. 

HR should therefore consider the employee’s actual job and legal status, instead of assuming that a job title automatically determines overtime eligibility. 

What Should HR Check Before Approving Overtime? 

A practical UAE overtime calculation workflow can be reduced to ten checks: 

1. Confirm the employee’s applicable labour framework. 
2. Check the contractual working schedule. 
3. Confirm the current basic salary. 
4. Verify actual attendance and approved overtime. 
5. Identify ordinary, night, rest day, and public holiday work. 
6. Check whether the employee has a special working hour classification. 
7. Apply the correct legal rate. 
8. Check daily and three-week working limits. 
9. Record approval and supporting attendance data. 
10. Reconcile the amount before payroll is processed. 

For employers building a more controlled process, Ensaan’s guide to the payroll process in the UAE explains how attendance, overtime, allowances, deductions, WPS processing, and payroll reporting fit together. 

Why is Attendance Data Important for Overtime? 

An overtime calculation is only as reliable as the working-hour data behind it. 

For instance, if an employee has recorded 8 hours in attendance and a manager approves 2 hours, payroll needs a controlled way to connect the approval with the actual attendance record. 

Ensaan’s time and attendance management system allows businesses to record attendance, process timesheets, track working time and link attendance data to payroll.  

This saves the time normally spent manually comparing individual spreadsheets, timesheets, and payroll files each month. 

How Can Payroll Software Automate UAE Overtime Calculation? 

For businesses with larger teams, handling overtime becomes more difficult when attendance, approvals, employee records, and payroll are stored separately. 

PeoplesHR Payroll, implemented across the GCC by Ensaan Technologies, features automated payroll computation, HR integration, real-time payroll alerts, statutory requirements, discrepancy management and employee self-service. 

If you have multiple entities or greater payroll needs across the GCC region, Adrenalin Payroll also combines attendance, leave, employee information and statutory requirements with payroll. 

A Complete UAE Overtime Calculation Example 

Let’s take an employee making a basic salary of AED 6,000. 

Basic hourly wage 

AED 6,000 ÷ 30 ÷ 8 = AED 25 

Four ordinary overtime hours 

AED 25 × 4 × 1.25 = AED 125 

Two qualifying night overtime hours 

AED 25 × 2 × 1.50 = AED 75 

Total overtime 

AED 125 + AED 75 = AED 200 

The employee’s allowances are not included in the calculation base. 

The same logic becomes more complex when the month includes Ramadan schedules, weekly rest-day work, public holidays, shift arrangements, or different employee classifications. 

A Practical Approach to UAE Overtime Compliance 

The most effective way to calculate overtime in the UAE is to connect the legal rule with reliable employee data. 

Begin with the relevant employment structure and work schedules. Verify the basic salary, log actual working hours, identify the overtime type, and apply the applicable overtime pay rate. Then keep calculation and supporting approval records. 

Automated attendance and payroll make overtime easier to track and check for growing UAE and GCC businesses. 

Ensaan Technologies combines HR and payroll software with implementation and payroll services for organisations operating across the Middle East.  

Its HR and Payroll Software solution supports payroll, attendance integration, employee records, reporting, and statutory requirements. 

If your team is still reconciling overtime manually, the Ensaan team can walk you through how a connected setup would work on a quick call. 

Frequently Asked Questions 

1. How is overtime calculated in the UAE? 

The basic hourly wage is the basic monthly salary divided by 30 and then by 8. Multiply it by the overtime hours and the applicable rate, such as 1.25 for ordinary overtime. 

2. Is overtime based on basic salary in the UAE? 

Yes. Under Article 19, overtime pay is based on the basic wage, not the full salary package. 

3. What is the normal overtime rate in the UAE? 

Ordinary overtime is paid at the normal hourly wage plus at least 25%, with a minimum multiplier of 1.25, calculated on the basic salary. 

4. What is the UAE night overtime rate? 

Overtime worked between 10 PM and 4 AM is paid at the normal hourly wage plus at least 50%, a minimum multiplier of 1.5, except for shift workers. 

5. How is public holiday work compensated in the UAE? 

An employee working on an official public holiday generally receives either a substitute day off or the normal working day wage plus at least 50% of the basic wage. 

6. How many overtime hours are allowed for workers in the UAE? 

Overtime may not be more than 2 additional hours per day, while total working hours are subject to the 144-hour limit over a three-week period and the exceptions provided by law.