UAE labour lawovertime paypayroll complianceMOHRERamadan working hours

UAE overtime pay law: rates, caps and Ramadan hours

19 October 20267 min readAxion ERP Team — GCC Finance & Compliance

How UAE overtime pay works under Article 19: the 25% and 50% uplifts on basic wage, the two hour daily cap, the 48 hour week and the Ramadan adjustment.

UAE overtime pay turns on three things: the basic hourly wage, the correct premium (25% for ordinary overtime, 50% for night hours or rest-day work), and the daily cap of two extra hours. Federal Decree-Law No. 33 of 2021 sets these rates out in Article 19, with the ordinary working week capped at eight hours a day or 48 hours a week under Article 17. This article works through the formula, a worked month of pay, and the Ramadan adjustment that changes the baseline every year.

UAE overtime pay: the legal formula behind the number

Ordinary overtime, hours worked beyond the standard eight-hour day or 48-hour week, is paid at the basic hourly wage plus a minimum uplift of 25%. The official UAE Legislation portal text of Article 19 states the worker shall be entitled to the wage for normal working hours, calculated on the basic wage, plus an increase of at least 25% of that wage.

Basic wage, not gross salary

The 25% and 50% uplifts apply to the basic wage, not the gross salary. Article 1 of the Decree-Law defines the basic wage as the contractual pay for the work itself, excluding housing allowance, transport allowance and other benefits in kind, a distinction set out clearly by payroll practitioners working through the definition. If your current system calculates overtime on the full monthly package rather than the basic component, you are almost certainly overpaying, and it is worth checking which figure your spreadsheet or software actually uses.

Night overtime and rest-day work

Two situations attract a higher 50% premium instead of 25%:

Work carried out between 10pm and 4am, unless the employee is a shift worker, in which case this specific night premium does not apply. Article 19 of the Decree-Law entitles the worker to the basic wage plus an increase of at least 50%, with shift workers excluded from this provision.
Work on the employee's contractual rest day. The employer must either grant a compensatory rest day or pay the normal day wage plus at least 50% of the basic wage for that day, under the same article.

Maximum overtime hours UAE: the daily and weekly caps

The law does not let overtime run indefinitely. Two ceilings apply together.

A daily cap of two additional hours. The Decree-Law permits employers to require extra hours provided they do not exceed two hours per day, per Article 19.
An underlying baseline of eight hours a day or 48 hours a week for ordinary working time, set out in Article 17 of the Decree-Law.

The Executive Regulation, Cabinet Resolution No. 1 of 2022, adds a rolling total on top: ordinary hours plus overtime combined must not exceed 144 hours across any three-week period. In practice this rarely binds if the two-hour daily cap is already respected, but it is the backstop figure an inspector checks first.

The Executive Regulation also exempts certain categories of worker from the standard maximum working-hours provisions, with different arrangements applying to specific types of role. Because misapplying an exemption has a real payroll cost, confirm which of your positions actually qualify with MOHRE or your legal adviser before excluding anyone from overtime pay.

Worked example: a month of overtime

Payroll guides commonly illustrate the formula with a published example rather than an arbitrary salary. Bayzat's worked example uses a basic monthly salary of AED 3,200 and arrives at a per-day wage of AED 105.20, using the divisor (basic salary multiplied by 12, divided by 365). Other sources, including web.hr's calculator, divide the monthly basic salary by 30 days instead. Neither divisor is written into the Decree-Law itself, so the mechanics are left to standard payroll practice, and your software should let you confirm which one it applies.

Taking Bayzat's published per-day wage of AED 105.20 and dividing by an eight-hour day gives an hourly basic wage of roughly AED 13.15. On that basis, ten hours of ordinary overtime at the basic wage plus 25% comes to about AED 164.38, and two hours of night overtime at the basic wage plus 50% comes to about AED 39.45, for total overtime pay of roughly AED 203.83 on top of the basic salary that month. Because this employee never exceeded two overtime hours on any single day, the calculation stays inside the legal cap without needing an exception.

The UAE overtime calculator applies the correct divisor, the correct premium window and the two hour daily cap for you, which removes the manual risk here, particularly across a workforce on mixed shift patterns.

Ramadan working hours 2027 in the UAE

Ramadan changes the baseline you apply the overtime formula to. On 12 February 2026, MOHRE announced that normal working hours for private-sector employees across the UAE would be reduced by two hours a day for the whole of Ramadan, and that employers could apply flexible or remote-working patterns within those reduced hours where the nature of the business allowed it.

The legal basis for the reduction sits in the Executive Regulation rather than the Decree-Law itself. Article 17(4) of the Decree-Law delegates the question of Ramadan hours to the Executive Regulation, and it is Article 15(2) of Cabinet Resolution No. 1 of 2022 that fixes the two-hour cut. Because this is a standing rule rather than a one-off decision, it is reasonable to expect MOHRE to repeat it for 2027, but the ministry has not yet issued that confirmation.

Ramadan 2027 (1448 AH) is currently projected to begin around 8 February 2027, subject to moon sighting, which is how the Islamic calendar works every year. Treat this as a planning estimate only. Do not fix a start date or a reduced-hours schedule for 2027 until MOHRE issues its own circular, as it did on 12 February 2026 for that year. Once the ministry confirms the 2027 dates and reduction, the same two-hour cut should flow straight into your overtime baseline for that month, and your payroll system needs to apply it automatically rather than wait on a manual adjustment.

Axion ERP's People box tracks worked hours by shift and branch, so the hourly basic wage, the night-shift window and the two-hour daily cap are calculated from the same attendance record rather than a separate spreadsheet. For related payroll deadlines, see the piece on the WPS salary deadline, and once the overtime base is confirmed, run end-of-service figures through the UAE gratuity calculator. A fuller view of how the suite handles payroll and compliance sits on the features page, and common questions are answered in the FAQ.

Frequently asked questions

Is UAE overtime calculated on basic salary or gross salary

Overtime is calculated on the basic wage only, as defined in Article 1 of Federal Decree-Law No. 33 of 2021, which excludes housing allowance, transport allowance and other benefits in kind. If your payroll uses the full gross package, the overtime figure will be too high.

What is the maximum overtime allowed per day in the UAE

The Decree-Law caps additional working hours at two hours a day under Article 19. The Executive Regulation, Cabinet Resolution No. 1 of 2022, adds a further ceiling of 144 total working hours across any three-week period.

How much extra is night overtime in the UAE

Work between 10pm and 4am is paid at the basic wage plus at least 50%, so 150% of the basic hourly rate, under Article 19 of the Decree-Law. This specific night premium does not apply to shift workers.

Will Ramadan working hours be reduced again in 2027

MOHRE has not yet announced the 2027 Ramadan reduction. In 2026 it confirmed a two-hour daily reduction for private-sector staff on 12 February, and the same mechanism under Cabinet Resolution No. 1 of 2022 is expected to apply again, but the dates and confirmation should come directly from MOHRE before you update payroll.

Does every employee in the UAE get paid overtime

No. The Executive Regulation exempts certain categories of worker from the standard maximum working-hours provisions, which affects how overtime applies to them. Confirm whether a specific role qualifies for an exemption with MOHRE or a labour lawyer rather than assuming.

Sources

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