Lesson 2 — The seven settings, and which of them are law
This is the lesson that decides whether you can defend the numbers in the rest of the course.
The obligation. Federal Decree-Law 33/2021 and Cabinet Resolution 1/2022 fix two things that matter to overtime arithmetic: the base it is computed on, which is the basic salary, and the uplift percentages applied to that base. What neither instrument contains is a rule for turning a monthly salary into a daily or an hourly figure. There is no division by 30 in the law and no division by 8. Those two divisors are MOHRE and judicial practice. Source: Federal Decree-Law 33/2021 and Cabinet Resolution 1/2022.
The mental model. This is the honest core of the module's design, and it is worth stating as a principle: what the law fixes is a constant, and what practice supplies is a setting. A figure written into the statute has no business being editable by a payroll administrator. A figure that comes from ministerial and judicial practice has no business being welded into a rule where nobody can see it or argue with it. So the uplift percentages are enforced — they are minimums, and the system refuses a value below the statutory floor — while the two divisors sit in Settings, where you can change them and be accountable for having changed them.
The click path. Settings › Payroll, UAE section. Seven settings, and their shipped defaults.
| Setting | Default | What it decides |
|---|---|---|
| Payroll days per month | 30 | The divisor turning a monthly wage into a daily rate |
| Payroll hours per day | 8 | The divisor turning a daily rate into an hourly rate |
| Ordinary / night / rest-day uplift | 25% / 50% / 50% | The overtime uplifts |
| ILOE premium includes VAT | On | Adds 5% VAT to the ILOE deduction |
| GPSSA government subsidy | On | Applies the 2.5-point subsidy for the new cohort under AED 20,000 |
| GCC employer share cap | 15% | The ceiling on your contribution for a GCC national |
| Article 25 deduction cap | Warn | Warn or block when deductions exceed 50% of remuneration |
Four of the seven are not this lesson's subject. ILOE premium includes VAT, GPSSA government subsidy and GCC employer share cap are social-insurance settings, and course 4.2 explains what each of them does and when to change it. The Article 25 deduction cap is Lesson 6. What is left here is the two divisors and the three uplifts.
The worked example. Our technician earns AED 12,000 a month: basic AED 7,200, housing allowance AED 3,300, transport allowance AED 1,500. On the shipped divisors, four rates fall out, and every other figure in this course descends from them.
| Rate | Arithmetic | Result |
|---|---|---|
| Daily rate on full remuneration | AED 12,000 ÷ 30 | AED 400 |
| Hourly rate on full remuneration | AED 400 ÷ 8 | AED 50 |
| Daily rate on basic | AED 7,200 ÷ 30 | AED 240 |
| Hourly rate on basic | AED 240 ÷ 8 | AED 30 |
Change payroll days per month from 30 to 26 and the daily rate on full remuneration becomes AED 461.54 instead of AED 400. Every overtime line, every absence line and every leave encashment moves with it. That is the weight the setting carries, which is exactly why it is a setting rather than a constant — and exactly why you should not change it casually.
The floor is enforced, the ceiling is not. Try to set the ordinary uplift to 20% and the system refuses the value, because 25% is the statutory minimum. Set it to 30% and it accepts, because paying more than the minimum is lawful and always has been. That asymmetry is the entire rule in one field: a floor, not a target. If your employment contracts promise more than the statute, put the promised figure in the setting and the payslips will honour it.
The failure mode. Copying a divisor from another country's payroll, or inheriting one from a legacy system, and never writing down why. The setting exists because the law does not supply a number, which means your choice needs a reason you can state out loud — the employment contract, MOHRE practice, or written legal advice. Record that reason somewhere a successor will find it. The one thing you cannot do is treat 30 and 8 as though they were statute: a court that disagreed with your divisor would be disagreeing with a practice, and practices are argued about.