Middle East

United Arab Emirates (UAE)

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Employer of Record (EOR) in United Arab Emirates (UAE)

What you'll learn

  • Country Introduction
  • Employment Terms
  • Minimum Wage and Working Hours
  • Statutory Leave Laws
  • Termination Process
  • Additional Information
United Arab Emirates (UAE) Introduction

United Arab Emirates (UAE) is a country in the Middle East region bordered by Oman and Saudi Arabia. Dubai is the country’s most populous city and is considered a major international hub with many digital nomads choosing to work in Dubai. Ever since oil was discovered in the area in 1958, the country has had rapid growth in infrastructure, healthcare, and technology, and a tourism industry that sees over 20 million tourists visiting Dubai and Abu Dhabi.

Employment Terms

Types of Contracts

Only fixed term contracts are available in UAE - with a maximum duration of 5 years.

Job Title Restrictions

No “C-level” titles (CEO, CFO etc.)

Working Hours

The maximum amount of working hours is 8 hours per day, 48 hours per week. Work hours are reduced to 6 hours per day during Ramadan. If an employee works beyond the maximum of 48 hours, they will be paid overtime as follows:

  • Normal work hours: Basic salary plus an additional 25%
  • Off days and Public Holidays: Basic salary plus an additional 50%

Minimum Wage

There is no minimum salary stipulated in the UAE Labour Law, but salaries must cover the basic needs of the employees.  The average is around AED 5,000 per month.

Wage Deductions

Employers cannot deduct any fees associated with relocation (visa/repatriation expenses, etc). Any deductions due to employee misconduct should not exceed 5 days’ wages.

Probation Period

Probation can be a maximum of 6 months. The typical probation period lasts 3 months. During probation, notice for both the employer and employee is 14 days, unless specified.

Taxes & Local Employment Costs

Employee Taxes

There are no taxes applicable to the employee's salary.

However, employees are required to sign up for Unemployment Insurance (approximately 60 AED). They must organize and pay for this fee directly through a government portal.

Employer Taxes & Contributions

There are no taxes applicable for the employer to contribute to.

However, employers must provide mandatory medical insurance; costs for these vary according to the plan chosen and the employee’s age and gender.

Types of Leave

Annual Leave

Employees are entitled to 30 days of leave (minimum 22 working days). The employee is entitled to this once they have completed probation (though this is at the discretion of the employer and 99% of the time employees take annual leave during this time).

At the end of the year, unused leave can be paid out in salary. Alternatively, 5 days of annual leave can be carried over to the next calendar year, but needs to be used before March 31st. By mutual agreement, more days can be rolled over, though the government will only guarantee 5 days.

Sick Leave

Employees are entitled to 15 days of sick leave with full pay, 30 days with half pay, and 45 days unpaid.

Maternity Leave

Female employees are entitled to 45 days of paid maternity leave and 15 days with half pay.

Paternity Leave

New fathers in the UAE are entitled to five working days of paternity leave with full pay, which they can choose to take consecutively or at any time during the first six months after the birth of the child.

Public Holidays

There are 13 public holidays in 2023 (some days are dependent on the moon). If an employee needs to work on a holiday, they should be paid 1.5X their hourly rate.

See this list for public holidays in UAE.

Benefits

Companies typically provide the following benefits in UAE:

  • Life Insurance
  • Education allowance (families)
  • Food Allowance
  • Expat Air Fare (for expats)

Medical Insurance

As the employer, it is mandatory to provide medical insurance in the UAE. Medical insurance costs vary according to the plan chosen and the employee’s age and gender.

Termination Process

Notice Period

The minimum notice period after probation is 30 days which can be extended up to 3 months. Extensions are typically given to employees in senior level roles.

Payment in lieu of notice is possible. During probation, the notice is 14 days.

Statutory Payments

Gratuity: A mandatory gratuity must be paid to employees when they are offboarded, if they have been employed for 12 months or longer.

The gratuity amount varies according to the years of service:

  • 1-5 years: 21 days basic salary per year
  • 5+ years: 30 days basic salary per year

Severance: If an employee is terminated unlawfully, they may raise a case and be entitled to 3 months' salary by the courts.

Leave: Any unused leave should be paid out to the employee in their final salary.

Additional Information

N/A

OVERVIEW
Language(s):
Arabic
Currency:
United Arab Emirates Dirham (AED)
Capital City:
Abu Dhabi
Population:
10.2 Million
Cost of Living Rank:
35th
VAT (Valued Added Tax):
5%
Employer TaxES
12.5%
(estimated)

★  12.5% - Social Security

Get Started in 3 Steps

1

Remote candidate

You've sourced a full-time employee or contractor located in a country where your company is not incorporated.

2

Cost Calculation

Pass us the details of your candidate and we will let you know exactly what it costs to employ your candidate in that country.

3

Onboarding & Admin

Sit back and relax as we onboard your new team member and take care of all the local compliances and admin work.

Same-day onboarding
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Available in 180+ countries
How Remofirst employs in United Arab Emirates (UAE)

It can be prohibitively expensive to establish an entity in every country you want to hire talent in, so Remofirst will hire and pay your employee on your behalf while you manage their daily duties. Remofirst will handle formal HR procedures and employment contracts that adhere to local laws, so that you can simply approve invoices via our platform. When you work with an Employer of Record (EOR) you can compliantly hire the best employees around the world.

How employees in United Arab Emirates (UAE) get paid
Your employee's hours, time off, holidays, bonuses, and commissions are automatically calculated into payroll. Remofirst will invoice you in either US Dollars (USD), Euros (EUR), British Pounds (GBP), Canadian Dollars (CAD), or Singapore Dollars (SGD) around the 15th of each month to make sure your employees in United Arab Emirates (UAE) are paid on time in United Arab Emirates Dirham (AED). To make it even easier, you can summarize your entire global team's salaries to aggregate them into one payment (instead of many individual payments).
Full-time Employees vs Global Contractors

Unlike full-time employees, contractors work on projects with multiple companies at a given time and are technically self-employed. Full-time employees are solely focused on their employer and usually receive benefits (such as health insurance, equity or stock options, and time off) as an additional form of compensation. While it can be cheaper to work with international contractors instead of paying benefits to a full-time employee, you run the risk of misclassification. It's recommended to work with an EOR for contractor onboarding and payments, so you can know that your international contractors are paid compliantly and on time.

Dependable support for employees
Whenever the employee or employer has a question about benefits, Visas, or anything else related to international employment in United Arab Emirates (UAE), they can use our platform's chat function to get answers from our team of experts. Every client of Remofirst also receives a dedicated account manager that will serve as a point of contact for global HR support.