Every employee should understand how Overtime Calculates in UAE? so that they can figure out whether their employer is paying them fairly for performing extra duties.
Overtime is an extra payment to the employees for working additional hours over the normal working hours.
It is the normal practice in many countries, employees work for 8hrs a day and 48hr a week.
If an employer requests that an employee work an additional hour beyond the standard 48 hours per week, this is considered overtime.
Every nation has a labor law, the purpose of it is to prevent the employee from being exploited by their respective employers.
The overtime law also comes into the labor law which is designed to prevent employers from forcing employees to work excessively long hours.
In this post, I want to discuss the employees’ rights and privileges which has granted by UAE Labour Law in terms of working hours and provision of overtime.
I found many people who are working in the UAE majority of unskilled workers, don’t know how the company calculates their overtime and other compensations.
Not only the unskilled workers but also many professionals give their different views on overtime calculation in UAE.
Although the labor law has elaborated on how to calculate overtime in UAE many companies do not comply with it.
According to the labor law of the UAE. The company can not force you to perform overtime. If an organization wants you to go for overtime, your permission is required.
There are good and bad companies in the UAE, some good companies that pay according to labor laws, but some bad companies pay less than labor law.
If you want to just do overtime calculations in UAE, don’t worry because we have the overtime calculator in UAE, just input your data and get the results.
The calculator has been developed according to the UAE labor law, so, the calculation is accurate and reliable.
Overtime Calculates in UAE (Good company )
Per day salary = basic salary/30days
Per hour salary = basic salary/30days/8hrs
Overtime Calculates in UAE (Bad company )
Per day salary = basic salary×12/365
Per hour salary = basic salary×12/365/8hrs
3. Download UAE Gratuity and overtime calculator on your phone click download
The above difference has shown that all the companies in the UAE have not followed the UAE labor law. You may find the variation in the overtime paid from the company to the company.
Another disgusting thing is that even if you and your friend work for different companies with the same basic salary and have done equal hours of OT, your pay will not be similar at the end of the month.
Let’s take a look at the provisions of UAE labor law to see how your company should calculate overtime for employees.
Your company may pay you, higher than regular hours of work, but you should be aware of this. Is it in accordance with the law or not?
Most jobs in the UAE require an additional hour of work from employees. The overtime law states that only certain level employees are eligible for overtime, therefore, you must know whether you are eligible or not.
As per the labor law of the United Arab Emirates, the following position are not applicable for overtime.
They may receive huge bonuses in terms of contributing to the company’s growth by working extra hours.
Overtime is not applicable
- Senior positions.
- Administrative supervisors.
- The crew of naval ships and marine employees.
- 8 hours a day or 48 hours a week unless an employee works in a trade, hotel, and security guard the working hours can be increased to 9 hours a day maximum.
- Traveling between work and accommodation and the 1-hour break is not included in overtime.
- 8 hours a day is reduced to 6 hours during Ramadan.
- If an employer wants an employee to work overtime, he should seek the employee’s consent. The employer cannot force you to work overtime.
- The extra overtime hours shall not exceed 2hrs per day meaning the maximum of 11 hrs.
- If the nature of a job requires overtime the employer should pay overtime to the employees, adding 25% to the normal working hours.
- If you work between 9 pm-4 am then the pay rate is plus 50% on the normal working hrs.
How do the UAE companies calculate the Overtime on a normal day?
Basic salary×12/365days/8hrs = 1hrs payment.
supposed your basic salary is 2600 AED and you did overtime 120 hours in a month your salary will be. (Normal 1 hour pay + 25% = 1hrs over-time)
2600×12/365/8 = 10.68 normal hour pay
10.68+10.68 X 25% =13.35 per hour over-time.
Now total overtime hrs X per hrs over-time pay
120 X 13.35 = 1602 total overtime pay
Now basic salary + total overtime pay
2600+ 1602 = AED 4202 monthly payment.
short formula:– Basic salary+ basic salary ×12/365/8 × total hrs overtime ×1.25 = Monthly salary.
2600+2600×12/365/8 ×120 X1.25 = 4202
Calculation overtime from 9 pm to 4 am
Although it is a normal day, your overtime falls from 9 pm to 4 am the employer has to pay 50% more than the normal working hours.
Short formula:- basic salary ×12/365/8 X total overtime hrs X 1.5 = overtime pay.
An employee Works on Friday or off-day
If circumstances require the employee to work on Friday or his off day. The company should grant either another day off or pays a basic salary plus 50% over normal working hrs.
Short formula:– Basic salary ×12/365/8 X total overtime hrs X 1.5 = off day paid.
If you did 12hrs OT on your off day then the company will pay according to this formula.
2600 X12/365/8 X 12 X 1.5 = 192 (12hrs OT payment).
An employee Works on a public holiday.
Where the circumstances of the work make it necessary for a worker to work on public holidays or rest days.
He/she is entitled to full or partial payment, the company either compensates leave on another day.
If he is not compensated for such days by leave, his employer shall pay him a bonus equal to 150% of his basic payment in respect of the days worked.
2600X12/365/8 X total overtime hrs X 1.5 = total over-time pay. In addition one day off. If the employer does not want another day off needs to pay 150%
Supposed you did 8hrs overtime in the public holiday let’s see how to calculate.
2600X12/365/8 X OT 8hrs X 1.5 = 128 (8hrs pay +1day off)
If the company did not give you off so you may receive 150% compensation
2600X12/365/8X OT 8hrs X 2.5 = 213 (8 hrs over-time)