What is “Basic Salary” According to UAE Federal Labor Law?

Our aim as a law firm and profusions lawyer and legal consultants is to enrich public legal knowledge to minimize disputes and increase legal awareness of your rights. Before proceeding with article or video please read our legal disclaimer. This video and article is about all aspects related to basic salary for the employees under UAE Federal labor law in Dubai and United Arab Emirates.

The Content of the video is as below:

1- What is the Definition of Basic Salary as per UAE Federal Labor Law No. 8 of 1980 and its amendments?

As per the Article 1 of the same law, the definition is as below: Basic Salary : Added by Federal Law no . 12 dated 29/10/1986 :The wage stipulated in the employment contract during the term thereof between the parties , exclusive of any allowances whatsoever .

2- What does “exclusive of any allowances whatsoever” mean?

It means the wage mentioned on your contract as a “Salary” or “Basic Salary” excluding the following as part of the salary or as a separate allowance :- 1- House Allowance                                      2-Transportation Allowance 3- Phone Allowance                                      4-Communication Allowance 5- Travel Allowance                                       6- Any other allowance

3- What can be inclusive to my “Basic Salary”?

Any Payments can be inclusive to the basic salary, if the following terms has been meet:- (Example: Commission) 1- It is a part of the labor contract or internal regulations of the establishment or be customarily granted And/or It has been paid regularly by the employer and the employees deem such commissions as part of the wage and not a donation

4- How do I know my “Basic Salary”?

•1- Check Your Ministry of Labor Contract signed to issue your visa, searching for Wage or Basic Salary defined on the contract, also you can exclude/deduct allowance from the Wage/Gross Salary to know the Basic Salary. The same apply to contracts signed before Free zone Authorities and Private Contracts. • •2- Check the Salary receipt/Pay Slip submitted by Employer to you every month by email, if the Employer is send such Receipts/Pay Slips.

5- I get a raise, how does that affect my \”Basic Salary”?

•If you get a raise, where the employer did not classify/distrbuate such raise to one of the allowances, than such raise is add to your basic salary. •In case your employers has agreed on the contract with you or in the internal rules define that the raises shall be distributed between the Basic Salary and other allowances, than such rule shall apply to the raise.

6- Why Shall I know my \”Basic Salary”?

You shall know your basic salary because your entitlements are affected by that, the calculations of your end of services, vacation allowances, depend on that.

7- Can my employer reduce my \”Basic Salary” or transfer it to allowance?

No, any solo decision by the employer cannot reduce your Basic Salary, employer cannot transfer your Basic Salary to Allowance

8- Can other payments considered as a part of my \”Basic Salary”?

Yes, it is possible, but you shall have the following condition\’s meet:- 1- You have received the other payments as part of your salary for long time enough for you to consider it as a part of the salary. For Example: Commissions, Salary Raises, Bonus. 2- It is not an allowances or named as an allowance according to Article 134 of the Labor Law below:

Article 134 – As amended by Federal Law no . 12 dated 29/10/1986 : Without prejudice to the provisions of certain laws on the pensions and retirement benefits granted to workers in certain establishments , end of service gratuity shall be calculated on the basis of the last wage due to monthly , weekly and daily – paid workers , and on the basis of the average daily wage set forth in Article 57 hereof for the workers getting paid by piece . The wage used as a basis for calculating the end of service gratuity shall not include payments made to the worker in rem , housing , transport and travel allowance , overtime pay , representation allowance , cashier’s allowances , children education allowance , allowances for recreational and social services , and any other bonuses or allowances .

9- What is the minimum or maximum amount of \”Basic Salary”?

•As per the law it is subject to the mutual agreement between the employer and employee, also the future raises distribution of raises between Basic Salary and allowances as well. •The practices in UAE, that most of the companies are paying 60% of the salary as Basic Salary and 40% as allowances. Some companies are paying the full amount as a Basic salary. Thank You Nour Attorneys & Legal Consultants Lawyer & Legal Consultants Mohamed Noureldin Follow Us on social media For More Videos Contacts to help you: Ministry of Labor