Last Updated on August 30, 2024 by Vadim
In the United Arab Emirates, the concept of basic salary plays a crucial role in employment relationships. This guide aims to clarify what basic salary means under UAE labour law and its implications for both employers and employees.
What is Basic Salary in UAE?
According to UAE labour law, basic salary is defined as:
- The remuneration agreed upon in the employment contract
- The payment an employee receives for fulfilling their contractual obligations
- Excludes allowances, benefits, or expenses
Key Aspects of Basic Salary
- Stipulated in the employment contract
- Can be paid monthly, weekly, daily, hourly, or on a piecework basis
- Does not include allowances or benefits in-kind
Percentage of Total Compensation
While not legally mandated, typically:
- Basic salary constitutes about 60% of the gross salary
- Allowances make up the remaining 40%
Note: There is no fixed percentage required by law.
Minimum Wage in UAE
- No specific minimum wage is stipulated in UAE labour law
- The law mandates that wages must be adequate to meet employees’ basic needs
Importance of Basic Salary
Basic salary forms the basis for calculating various employee benefits, including:
- End of service gratuity
- Overtime compensation
- Remuneration for work during official holidays
Adjustments to Basic Salary
- Salary increases are typically considered part of the basic wage unless otherwise specified
- Employers cannot unilaterally change the basic wage value; it requires agreement from both parties
Working Hours and Overtime
Standard working hours in UAE:
- 8 hours per day or 48 hours per week over a 6-day work week
- Some sectors (e.g., hospitality) may have 9-hour workdays
Overtime regulations:
- Should not exceed 2 hours per day under normal circumstances
- Compensated at regular hourly wage plus 25% (50% for night shifts)
Special Considerations
- Reduced hours for strenuous jobs (as determined by the Ministry of Labour)
- 2-hour reduction during Ramadan
- Friday is the standard weekly rest day
Recent Changes
The 2021 amendments to UAE labour law introduced more flexible work arrangements, aiming to enhance worker protections and modernize employment practices.
Conclusion
Understanding basic salary and its implications is crucial for both employers and employees in the UAE. While these guidelines provide a general overview, it’s important to refer to the most current version of the UAE Labour Law and any applicable regulations for specific situations.
Vadim Kouznetsov is a distinguished entrepreneur and the visionary founder and CEO of JobXDubai.com, the UAE’s rapidly expanding job board. Renowned for his expertise in bridging the gap between job seekers and employment opportunities, Vadim has become a leading authority in the recruitment and job market of Dubai.
His innovative approach to matching candidates with their ideal roles has propelled JobXDubai.com to the forefront of the industry, making a significant impact on the region’s employment landscape.
Through his work, Vadim Kouznetsov has demonstrated a profound commitment to enhancing the job search experience, solidifying his status as a pivotal figure in the field of recruitment.