How to Calculate Public Holiday Pay in the UAE
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How to Calculate Public Holiday Pay in the UAE
Adjusting to local labour laws is a vital component of the recruitment process in the UAE. For example, public holiday pay can be a deal breaker for job seekers, and employers must understand how to calculate it. This is especially true for companies hiring foreign talent, who may be familiar with different regulations. This article will help you learn how to calculate public holiday pay in the UAE as an employer to attract the best candidates for your organisation.
Cercli’s global HR system offers valuable tools and insights to help you manage your international teams. With Cerclis solutions, you can automate calculations for public holiday pay and other benefits, aiding your organisation in complying with local labour laws and seamlessly onboarding new hires.
What are the Rules for Working on Holidays in the UAE?
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The UAE's public and private sectors are governed by specific provisions under the UAE Labour Law regarding working hours, rest days, and compensation during official holidays. These rules ensure fair labour practices while maintaining workplace flexibility, reflecting the UAE's commitment to balanced employment standards.
Weekly Rest and Public Holiday Entitlement
Article 21 of the UAE Labour Law mentions that every private sector employee is entitled to at least one paid weekly rest day. In addition, employees are eligible for fully paid leave on public holidays, as declared by the UAE government.
Compensation for Working on Public Holidays
Should an employee be required to work on an official public holiday, Article 28 of the Labour Law outlines that the employee must either be:
- Given a substitute rest day.
- Paid for the day worked at their regular wage, plus an additional 50% of their basic salary, as stipulated by Article 28 of the UAE Labour Law.
This ensures fair compensation for those called to work during nationally recognised rest days.
Overtime Regulations
Employers may request employees to work overtime; nevertheless, the law limits this to two additional hours per day, ensuring employee well-being. Any overtime must be compensated as follows:
- 25% above the regular hourly wage for work outside normal hours.
- 50% above the regular hourly wage for any overtime worked on holidays or between 10 PM and 4 AM, unless the employee is on a shift schedule.
Breaks and Overtime Exclusions
Employees working five or more continuous overtime hours are entitled to a break of at least one hour, promoting health and productivity. Nevertheless, it's essential to note:
- Commuting time to and from work is not included in overtime calculations.
- Meal breaks and rest periods during overtime are also excluded from payable hours.
Special Considerations
During Ramadan, standard working hours are reduced to six hours daily, reflecting the fasting month's religious significance and physical demands. Additionally, employees are generally not required to work more than two consecutive weekends, except in specific roles such as day workers or where the nature of the job necessitates continuous operations.
Managerial and Maritime Roles
It is important to note that senior or managerial staff and those in maritime roles (such as seafarers) are generally exempt from standard overtime regulations, recognising the unique nature of their responsibilities.
These progressive provisions demonstrate the UAE's strong commitment to maintaining a world-class, balanced and equitable work environment while giving businesses the required operational flexibility.
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How to Calculate Public Holiday Pay in the UAE
Under the UAE Labour Law, public holidays are fully paid days off for employees. Even if you’re not required to work on a public holiday, you're entitled to a fully paid day off. Nevertheless, if you work on a public holiday, you must ensure you are compensated fairly for your time.
What Happens if You Work on a Public Holiday in the UAE?
Suppose an employee works on an official holiday. In that case, the employer must either grant a substitute day off or pay the employee their regular daily wage plus an additional 50% of their basic daily wage. This ensures employees are fairly rewarded for working during designated rest periods.
In the UAE, the labour law considers public holidays as fully paid days off. Nevertheless, when an employee is required to work on a public holiday, the law ensures they are compensated fairly for their time.
Formula for Overtime Pay on Public Holidays
Suppose an employee works on an official holiday. In that case, the employer must either grant a substitute day off or pay the employee their regular daily wage plus an additional 50% of their basic daily wage. This ensures employees are fairly rewarded for working during designated rest periods.
In the UAE, the labour law considers public holidays as fully paid days off. Nevertheless, when an employee is required to work on a public holiday, the law ensures they are compensated fairly for their time.
Example of Holiday Overtime Pay Calculation
For example, if an employee has a basic salary of AED 3,650 and works 8 hours on a public holiday, the calculation would be:
(AED 3,650 × 12 ÷ 365 ÷ 8) × 8 × 1.5 = AED 180.
So, the employee would receive AED 180 for that day’s work and their usual monthly salary.
Important Note: Holiday Pay is Calculated on Basic Salary Only
These calculations apply strictly to the basic salary. Public holiday pay calculations do not include allowances such as housing or transportation. Employers must adhere to this structure to ensure compliance with the UAE Labour Law. Any violations can be reported to the Ministry of Human Resources and Emiratisation (MoHRE) for guidance and resolution.
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- Payroll Process In UAE
- How To Hire Employees In Dubai
MoHRE’s Role in Enforcing Employee Rights
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This system helps the Ministry monitor whether employers pay salaries accurately and on time. When an employer fails to disburse wages within 15 days after the due date, MoHRE considers this a violation. Such delays may result in administrative measures, company downgrades, and even suspension of new work permits until the issue is resolved.
Employees can submit salary enquiries through the MoHRE smart app, call centre, or Tasheel service centres.
Overtime Pay: MoHRE’s Monitoring and Enforcement
MoHRE also protects employee rights concerning overtime compensation. The Ministry ensures compliance with the UAE Labour Law, which mandates paying employees for overtime work and working on public holidays and weekends.
MoHRE acts as a mediator and enforcer when disputes arise over unpaid overtime. If necessary, they may summon the employer for clarification, demand payment, or escalate the matter to labour courts.
Investigating Employee Complaints of Wage Theft and Unpaid Overtime
MoHRE encourages employees to report salary discrepancies, overtime compensation queries, or holiday work arrangements. These complaints are taken seriously; investigations often involve labour inspections or formal investigations. The Ministry works collaboratively with businesses to ensure compliance, with administrative measures applied only when necessary, to encourage employers to maintain timely payments to create an optimal working environment.
Public Holidays in the UAE You Need to Know
The United Arab Emirates annually observes several official public holidays, encompassing Gregorian and Islamic calendar events. These holidays apply to public and private sector employees, and several dates are based on lunar observations, meaning they may vary annually.
New Year’s Day
January 1st is a nationwide public holiday and the beginning of the Gregorian calendar year. It is celebrated across the UAE with large-scale events, concerts, and fireworks, particularly the globally renowned Burj Khalifa display in Dubai. Employees in both sectors are entitled to a day off on this occasion.
Eid Al Fitr
Eid Al Fitr marks the end of the fasting month of Ramadan. The festival is a time of celebration, charity, and communal prayer. In 2025, it is expected to fall between March 30th and April 1st, depending on the moon's sighting. It is one of the most significant religious holidays in the UAE.
Arafat Day
June 7th, 2025 (subject to moon sighting) Arafat Day takes place on the 9th day of Dhu Al-Hijjah, the Islamic month of pilgrimage. Muslims observe it through prayer and spiritual reflection, which precedes Eid Al Adha. For those undertaking the Hajj, it is considered the most essential pilgrimage day.
Eid Al Adha
8th to 10th of June, 2025 (subject to moon sighting) following Arafat Day, Eid Al Adha commemorates Prophet Ibrahim’s willingness to sacrifice his son in obedience to God. Muslims mark this event through the ritual of animal sacrifice, with a portion of the meat distributed to the less fortunate. The public holiday spans three days and is among the longest religious breaks of the year.
Islamic New Year
July 25th, 2025 (subject to moon sighting). Also known as the Hijri New Year, this occasion signifies the start of the Islamic calendar. The date shifts each year in the Gregorian calendar based on the lunar cycle. It is a quieter holiday focused on reflection, prayer, and a renewed spiritual outlook.
Prophet Muhammad’s Birthday
September 10th, 2025 (subject to moon sighting). The Prophet Muhammad’s birthday, or Milad un Nabi, is observed on the 12th of Rabi’ Al-Awwal. It is recognised as a public holiday in the UAE, marked by remembrance and reverence for the Prophet’s life and teachings.
UAE National Day
This celebration highlights the UAE's remarkable achievements and progress since its founding. Celebrated on December 2nd, this day marks the founding of the UAE in 1971 following independence from British rule. The festivities extend over two days and include parades, cultural displays, and fireworks, making it one of the year's most vibrant and patriotic holidays.
