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Overtime (UAE)
Definition
UAE overtime is typically calculated at 125% of hourly rate for excess hours per labour law.
UAE overtime rules under labour law
Federal Decree-Law No. 33/2021 and its executive regulations define standard working hours and overtime premiums. Hours beyond the normal daily or weekly limit qualify as overtime, compensated at 125% of the hourly rate based on basic salary. Work on official rest days or holidays typically attracts 150% or compensatory leave plus premium, depending on circumstances.
Calculating the hourly rate
Overtime hourly rate derives from basic salary divided by applicable working days and hours per month — not from total package including allowances. SMEs that calculate overtime on gross pay overstate costs; those using incorrect divisors underpay and expose themselves to MOHRE complaints. Overtime must flow through WPS when paid, appearing in SIF files matching payslip breakdowns.
Overtime governance
Operational teams often approve overtime informally — WhatsApp requests, paper sign-off — without HR recording hours before payroll. This disconnect produces the pattern MOHRE sees in inspections: employees claim unpaid overtime with timesheet evidence while SIF records show base pay only. Documented approval workflows before payroll close eliminate this gap.
Example
FastFreight Couriers, a 44-employee Sharjah logistics SME, paid drivers a flat monthly amount regardless of overtime hours logged on delivery apps. Three drivers filed MOHRE complaints with GPS-backed timesheets showing 20+ unpaid overtime hours monthly. The company back-paid AED 31,000 and implemented mobile attendance integrated with payroll overtime calculation at Article 65 rates.
Compliance risks
Unpaid or incorrectly calculated overtime leads to MOHRE fines, mandatory back-payment with potential interest, and labour complaint escalation. WPS records showing no overtime payment despite documented extra hours are a primary inspection trigger. Repeat violations affect company classification and employee trust in high-overtime sectors like logistics and F&B.
Related terms
· by ArcHR Compliance Team
Frequently asked questions
What is Overtime (UAE)?
UAE overtime is typically calculated at 125% of hourly rate for excess hours per labour law.
Does UAE overtime apply to managers and supervisors?
Certain managerial and supervisory roles may be exempt from overtime provisions under Federal Decree-Law No. 33/2021 executive regulations if they hold specified authority levels. Misclassifying employees to avoid overtime payment is a common MOHRE finding — job titles alone do not determine exemption.
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