Overtime Calculation in UAE: Overtime Calculator

Wondering how to handle overtime calculation in UAE in 2025? Whether you're an HR professional, business owner, or an employee trying to understand your rights, this guide breaks down everything you need to know.

We’ll walk through the updated UAE Labour Law, calculation methods, examples, FAQs, and even a few mistakes to avoid. Let’s get started.

What is Overtime According to UAE Labour Law?

Overtime refers to any additional hours worked by an employee beyond the legally prescribed limit — which is 8 hours a day or 48 hours a week, as per Federal Decree Law No. 33 of 2021 (and its latest updates).

But here’s the catch — not all extra hours qualify as overtime. There are rules on who is eligible, what hours count, and how much should be paid. So let’s clarify the basics before diving into the calculations.

Who Is Eligible for Overtime in the UAE?

Here’s a quick checklist:

Exemptions apply to professionals in strategic roles or those directly responsible for decision-making. Always check employment contracts and labor classification.

When Is Overtime Applicable?

Employees may be entitled to overtime pay under the following scenarios:

1. Work beyond 8 hours/day or 48 hours/week
   
   
2. Night shifts (9 PM to 4 AM)
   
   
3. Public holidays or rest days
   
   
4. Emergency or urgent tasks outside regular hours
   
   

Now, let’s decode how these hours turn into dirhams.

How to Calculate Overtime in UAE (With Formula)

Formula for Overtime Pay (Normal Days)

Overtime Pay = Hourly Wage × Overtime Hours × 1.25 (25% extra)

Let’s say your monthly salary is AED 6,000.

Step 1: Calculate hourly wage
AED 6,000 ÷ 30 ÷ 8 = AED 25/hour

Step 2: Multiply by overtime hours and 1.25
AED 25 × 2 hours × 1.25 = AED 62.50

Overtime on Night Shift (9 PM to 4 AM)

Overtime Pay = Hourly Wage × Overtime Hours × 1.5 (50% extra)

For the same AED 25/hour:
AED 25 × 2 hours × 1.5 = AED 75

Overtime on Public Holidays or Weekly Day Off

You either get:

• A compensatory rest day or
  
• Overtime pay at 1.5x the regular wage

Overtime Calculator

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Real-Life Example: Overtime Calculation in UAE

Imagine an employee earning AED 8,000/month works 3 extra hours on a Friday (a rest day). Here's how you calculate:

1. Hourly wage = AED 8,000 ÷ 30 ÷ 8 = AED 33.33
   
   
2. Overtime Pay = AED 33.33 × 3 hours × 1.5 = AED 149.99
   
   

That’s nearly AED 150 for just one day of extra work.

Why Is Overtime Calculation Important for Employers?

Here’s why you should care (a lot):

• Compliance: Violating UAE Labour Law can result in penalties or lawsuits.
  
  
• Employee Trust: Fair compensation boosts morale and retention.
  
  
• Payroll Accuracy: Manual errors can cost companies both money and reputation.
  
  

Still relying on spreadsheets? Time to consider automation.

Can Overtime Be Compensated with Time Off?

Yes — but only if it’s mutually agreed between employer and employee. If not, monetary compensation is mandatory.

So if you worked on a public holiday and didn’t get a compensatory day, you’re entitled to overtime pay.

Common Overtime Calculation Mistakes to Avoid

1. Using basic salary instead of gross salary
   Overtime should be calculated using basic salary + allowances unless otherwise stated.
   
   
2. Misclassifying exempt employees
   Just because someone is on a fixed salary doesn’t always mean they’re exempt.
   
   
3. Forgetting to apply night shift multipliers
   Night shifts (9 PM to 4 AM) require 50% extra pay — not just regular overtime.
   
   
4. Skipping overtime on rest days
   Rest day work = 1.5x pay or compensatory leave. Ignoring this is a legal risk.
   
   

Overtime Calculator for UAE: Do You Need One?

Let’s be honest — manually calculating overtime for every employee across multiple departments, shifts, and pay grades is a nightmare.

That’s where an overtime calculator or HR software with automated payroll becomes a game changer. A good system can:

If you’re still asking “How do I calculate overtime for employees on shifts and different pay structures?” — the answer is: You shouldn’t. Your HR software should.

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Integration with Payroll Software: Why It’s a Game Changer

Still managing overtime manually? That’s not just inefficient—it’s risky.

Here’s how integrating overtime calculation with payroll software solves the problem:

Real-Time Data Sync

When your attendance and timesheets are linked to payroll, overtime hours are captured instantly. No duplicate entries, no missed shifts.

Error-Free Calculations

Advanced HR software applies the correct multipliers (1.25x, 1.5x, 2x) based on the time, shift, and holiday. Human error is eliminated.

Country-Specific Compliance

Payroll systems like peopleHum are pre-programmed with UAE Labor Law logic, keeping your calculations legally sound.

Custom Rules

Do your weekend shifts differ for remote teams? Do some roles have exemptions? Modern payroll systems let you set custom overtime rules per employee type.

Audit Trails and Reports

Need to show labor inspectors a history of overtime pay? A few clicks and you’ve got detailed logs—automated, timestamped, and backed by data.

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What Does the UAE Labour Law Say About Overtime Caps?

The law is clear: Overtime should not exceed two hours per day, unless the work is necessary to prevent a serious loss or accident.

In other words, overworking your team to meet deadlines can legally backfire.

What Happens If You Don’t Pay Overtime?

Here’s what could happen if you skip or underpay overtime:

Your team may not say it — but they’re watching.

Overtime Calculation FAQs (2025 Edition)

1. What is the current UAE law on overtime pay?

The UAE Labour Law mandates that employees who work beyond regular hours are entitled to 25% to 50% additional pay, depending on the time and nature of overtime.

2. Is overtime mandatory for all employees?

No. It’s mandatory for eligible employees, but some roles (e.g., managerial) may be exempt.

3. Can I be forced to work overtime?

Only in emergencies or critical situations. Otherwise, overtime work must be within legal limits and with employee consent.

4. Should bonuses be included in overtime pay?

No. Bonuses are typically excluded. Overtime is calculated on basic salary + fixed allowances.

5. How do I verify if I’ve been paid overtime correctly?

Use the formula:
Overtime Pay = Hourly Wage × Overtime Hours × 1.25 or 1.5
Cross-check with your payslip and time logs.

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Pro Tip: Automate to Avoid Errors

Manual overtime calculations can slow down your HR team, increase mistakes, and even lead to payroll fraud.

That’s why more UAE companies are switching to platforms like peopleHum. Our system is designed to:

• Automatically apply UAE labor law formulas
  
  
• Track employee work hours and breaks
  
  
• Calculate payroll and overtime without error
  
  
• Provide full transparency for both HR and employees
  
  

Conclusion: Fair Pay, Happy Teams, and No Legal Headaches

Whether you're a growing startup or an established company in the UAE, now’s the time to:

Ready to simplify overtime calculation in UAE?

Try peopleHum – your all-in-one HR software that calculates overtime accurately, saves time, and keeps your team happy.
👉 Book a free demo

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