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Overtime Calculation in the UAE: A Complete Guide

Zakia Baniabbassian
July 9, 2025

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Overtime is a common part of workforce operations, especially in industries with fluctuating workloads and tight deadlines.

Employees across the globe rely on fair compensation for extra hours, and the UAE has clear labour laws in place to regulate this. As an organization, you need to ensure accurate overtime calculations and compliance to avoid legal issues and maintain employee trust.

In this article, we have covered how overtime works in the UAE, key labour law provisions, calculation methods, special cases, and best practices to manage it efficiently.

Yomly helps automate and simplify compliance with UAE labour laws, including overtime management. Get a free trial today to check out how it works.

What Is Overtime as per UAE Labour Law?

Overtime refers to any work done beyond the standard working hours defined by UAE Labour Law. As per Federal Decree Law No. 33 of 2021, the normal working hours in the UAE are 8 hours per day or 48 hours per week.

Any work beyond this limit is considered overtime and must be compensated accordingly.

Overtime is typically paid at a higher rate than regular wages. If an employee works extra hours on a regular working day, they are entitled to their basic salary plus at least 25% extra.

If the overtime is done between 10 PM and 4 AM, the extra pay must be at least 50% of the basic wage.

Exceptions to Overtime Rules:

Senior positions such as managers or supervisors may be excluded.
Certain sectors like hospitality, healthcare, and security services operate under shift systems and may have different conditions.
Roles where the nature of work demands flexibility may also be excluded, based on Cabinet Resolution No. 1 of 2022.

As an employer, it’s your responsibility to determine whether a specific role qualifies for overtime under UAE labour law.

To stay compliant, ensure overtime is properly approved, documented, and calculated. Clear internal policies and reliable payroll software like Yomly help reduce errors and prevent disputes.

When Is Overtime Applicable?

Overtime in the UAE is governed by clear rules based on when and how extra hours are worked. As an employer, understanding the scenarios where overtime is applicable helps you stay compliant and build trust with your workforce.

The UAE Labour Law defines specific conditions for regular days, weekends, public holidays, and night-time work.

Here’s how it works:

1. Regular Workdays

If employees work more than 8 hours a day or 48 hours a week, the extra time is counted as overtime. You are required to pay 125% of the employee’s basic hourly wage for these additional hours.

It’s important to track start and end times accurately and make sure overtime is pre-approved. Some roles may be exempt from this rule, so always cross-check with the contract type and labour law exemptions.

2. Weekends and Public Holidays

When employees are asked to work on a weekly rest day or a public holiday, they are entitled to additional compensation. As per UAE law, you must either provide a compensatory day off or pay 150% of the basic wage for the hours worked.

This ensures fair treatment and motivates employees when work schedules extend beyond standard off days. Keep clear records to avoid legal risks during audits or employee disputes.

3. Night-Time Work

Night work refers to hours between 10 PM and 4 AM. If an employee works overtime during this period, you must pay at least 150% of their basic hourly wage, unless they fall under exempt categories.

This rule excludes roles that are based on shift schedules like security or hospitality. Night work can affect employee health and productivity, so tracking and limiting excessive night shifts is good HR practice along with legal compliance.

Overtime Pay Calculation Formula for UAE

As an employer, it’s important to calculate overtime pay accurately to comply with UAE labour laws and maintain trust with your employees. The law clearly outlines how to compute overtime based on the employee’s basic salary and the type of day or time the overtime is performed.

Here’s how you can calculate it:

Basic Formula for Overtime Pay

Overtime Pay = (Basic Monthly Salary ÷ 30 ÷ 8) × Total Overtime Hours × Overtime Rate

Where:

Basic Monthly Salary: Salary excluding allowances
30: Average number of days in a month
8: Standard working hours per day
Overtime Rate:
- 1.25 for regular days
- 1.5 for weekends, public holidays, or night-time

Example 1 – Overtime on a Regular Workday

Basic salary: AED 6,000
Overtime hours: 3

Step-by-step:

Hourly rate = 6,000 ÷ 30 ÷ 8 = AED 25
Overtime pay = 25 × 3 × 1.25 = AED 93.75

So, the employee should receive AED 93.75 for 3 extra hours on a regular day.

Example 2 – Overtime on a Public Holiday

Basic salary: AED 6,000
Overtime hours: 4

Step-by-step:

Hourly rate = 6,000 ÷ 30 ÷ 8 = AED 25
Overtime pay = 25 × 4 × 1.5 = AED 150

So, for 4 hours of overtime on a public holiday, the employee must be paid AED 150.

By following this formula, you ensure fair payouts and avoid disputes. At scale, manual calculations can be time-consuming. Platforms like Yomly help you automate overtime tracking and calculation to stay compliant with UAE labour law.

Employer Obligations and Limits

Overtime comes with specific legal obligations that employers in the UAE must follow. The UAE Labour Law outlines clear rules on how much overtime is allowed, how it should be documented, and how to ensure fair treatment of employees.

Here are key responsibilities you need to be aware of:

1. Maximum Overtime Limit

According to UAE Labour Law, employees should not work more than 2 hours of overtime per day. If the nature of work requires extended hours, it must be justified as necessary for business operations.

Even in urgent situations, exceeding the daily limit can result in penalties if not properly documented. Employers must plan workloads efficiently and avoid relying on excessive overtime as a long-term strategy.

2. Documentation and Recordkeeping

You are required to maintain accurate records of all overtime hours worked by your employees. These records should include clock-in and clock-out times, overtime approvals, and calculations for each payment cycle.

Proper documentation is essential not just for compliance, but also to resolve any disputes. Using digital HR systems like Yomly helps simplify this process and ensures records are always accessible and audit-ready.

3. Employee Consent and Awareness

Overtime must be communicated clearly and agreed upon by the employee. While some roles may require flexibility, forcing overtime without consent can lead to legal issues.

Make sure your HR policies define how overtime will be assigned, how compensation will be handled, and how employees can raise concerns. Transparent communication builds trust and keeps teams engaged.

4. Fair Compensation and Timely Payment

It is your duty to ensure overtime is paid fairly and within the usual payroll cycle. Delays or incorrect payments can cause dissatisfaction and lead to penalties.

You should calculate overtime based on the basic salary and follow the legal rate depending on the day or time of work. And, consider using an automated payroll system to reduce manual errors and maintain compliance.

Common Mistakes in Overtime Calculation

Even with the best intentions, many employers in the UAE make errors when calculating overtime, which can lead to compliance issues, employee disputes, and financial penalties.

Here are some of the most common issues we’ve seen in both small and big enterprises:

Not applying the correct overtime rate for night shifts, weekends, or holidays
Exceeding the daily overtime limit without proper justification
Missing proper documentation or approval for extra hours worked
Delaying overtime payouts or missing them in payroll cycles
Applying overtime rules to roles that are legally exempt
Failing to update policies when labour law changes occur
Relying on manual tracking without system-based accuracy
Not providing compensatory leave for work done on weekly rest days
Misclassifying regular shift variations as overtime hours, and more.

Yomly helps reduce these errors by automating overtime tracking, calculations, and compliance checks. With Yomly, you stay accurate, transparent, and aligned with UAE labour laws.

👉🏽 Give it a try today.

How to Automate Overtime Tracking and Payroll With Yomly

Yomly is one of the best automated payroll and HR software solutions for SMBs and enterprises across the GCC and MENA regions. It helps employers simplify complex payroll processes, stay compliant with local labour laws, and manage overtime with complete accuracy.

With built-in tools for tracking, approvals, and calculations, Yomly makes payroll faster, error-free, and fully transparent.

Here’s how Yomly helps:

Automatically tracks overtime hours based on attendance data
Applies correct overtime rates based on UAE labour law
Enables approval workflows for overtime requests
Integrates directly with payroll for accurate monthly payouts
Generates audit-ready reports for compliance and reviews

👉 Related guides and resources:

Frequently Asked Questions

1. How much is the overtime rate in UAE?

The standard overtime pay rate in the UAE depends on when the extra hours are worked:

Regular workdays: 125% of the employee’s basic hourly wage
Between 10 PM and 4 AM: 150% of the basic hourly wage
Weekends and public holidays: Either 150% of the basic wage or a compensatory day off

These rates are as per Federal Decree Law No. 33 of 2021 and apply to full-time employees unless exempted under specific job categories.

2. Can employees refuse to work overtime?

Yes, employees can refuse to work overtime if it is not part of their contractual agreement or if they have valid personal reasons. Overtime should be assigned with proper notice and consent, except in cases of emergency or urgent business needs. Employers are encouraged to maintain clear overtime policies and ensure that employees understand their rights and obligations.

3. Is overtime calculated on gross or basic salary?

Overtime in the UAE is calculated only on the basic salary, not on the gross salary. The basic salary excludes any allowances such as housing, transportation, or food. Employers must use the correct base amount to ensure legal compliance and fair compensation.

4. Is there a maximum number of overtime hours per month?

While UAE law limits overtime to 2 hours per day, there is no specific monthly cap mentioned. However, excessive overtime can raise concerns during labour inspections or audits.

Employers must justify any extended overtime and ensure that it is not used as a regular practice. Keeping work hours within a reasonable range also supports employee well-being and productivity.

5. What is the overtime rate in UAE as per the new labour law?

Under the new UAE Labour Law (Federal Decree Law No. 33 of 2021) and its supporting Cabinet Resolution No. 1 of 2022, the overtime rates are:

125% of basic hourly wage for extra hours on regular days
150% of basic hourly wage for overtime between 10 PM and 4 AM
150% of basic hourly wage or a compensatory day off for work on rest days or official holidays

These rates apply unless the employee is in a role exempted from overtime entitlements, such as managerial or supervisory positions.

6. Do part-time employees get paid for overtime in the UAE?

Part-time employees in the UAE are generally not entitled to overtime pay unless their contract specifically includes such terms. Since their work hours are already reduced by nature, any additional hours are typically treated as additional hours at standard pay, unless stated otherwise in the employment contract. Employers should clearly define work limits and payment structures in all part-time agreements to avoid confusion.

Zakia Baniabbassian

Zakia is the Marketing Manager at Yomly, where she leads the company’s brand and content strategy across the MENA region. With a strong focus on purposeful storytelling and strategic growth, she works closely with cross-functional teams to elevate Yomly’s presence.