UAE labour law no longer permits indefinite (unlimited) employment contracts. Since February 2, 2022 (under Federal Decree-Law No. 33 of 2021), all private-sector contracts must be fixed-term (limited). Any legacy unlimited contract had to be converted to a limited-term contract by that deadline; there is no indefinite-contract option available today.
Fixed-term contracts may run for any duration agreed by the parties (commonly 1-3 years) and are renewable indefinitely by mutual agreement. If the contract expires and both parties continue performing without a new signed agreement, it is treated as renewed under the same terms. Non-renewal at expiry does not require 'termination' notice/gratuity treatment in the same way mid-term termination does, though gratuity for completed service is still due.
Standard maximum hours are 8 hours/day and 48 hours/week, reduced to 6 hours/day during Ramadan for all employees regardless of religion. A 5-day work week is now standard market practice. Overtime beyond standard hours is paid at 125% of the base hourly wage, rising to 150% for overtime worked between 10pm-4am, on the weekly rest day, or on a public holiday (with an alternative compensatory rest day also permitted).
Only one probationary period is allowed per employer, capped at 6 months. Either party may terminate during probation: if the employee is leaving the UAE, no notice is required; if moving to a new employer within the UAE, a minimum 14 days' written notice is required (up to 30 days if the contract specifies); if the employer terminates, at least 14 days' notice or pay in lieu is required. No End of Service Gratuity accrues for service ending during probation.
There is no statutory 13th or 14th month salary requirement under UAE labour law. Any additional annual bonus or profit share is entirely discretionary and, if offered, should be documented in the employment contract or company policy.
Job titles must align with the classification listed on the employee's UAE work permit and labour card issued via MoHRE, and should match the role registered with the employment contract. Certain senior titles (e.g., General Manager, Director, signatory roles) carry visa-sponsorship and legal-signatory implications and are not currently supported under most EOR models. Regulated professions (legal, medical, engineering, education) require additional professional licensing before the corresponding title can be used, independent of the employment contract.
For non-GCC expatriate employees — RemoFirst's primary EOR population — there is no mandatory employer pension/social-security contribution (0%). The UAE's GPSSA pension scheme (employer 15%, or an effective 12.5% for salaries under AED 20,000/month after a government subsidy) applies only to UAE nationals. GCC nationals (Saudi, Bahraini, Kuwaiti, Omani, Qatari) are covered by a separate GCC Unified Protection Extension System paid to their home country, not GPSSA. For expatriates, the employer's real recurring cost is instead the End of Service Gratuity accrual plus mandatory employee health insurance premiums.
Non-GCC expatriate employees make no mandatory pension/social-security payroll deduction (0%). UAE nationals contribute 11% of salary to GPSSA (workers enrolled before the October 2023 reform remain on a legacy 5% rate); GCC nationals contribute to their home country's scheme instead. Separately, since 2023 all private-sector employees (including expatriates) must carry Involuntary Loss of Employment (ILOE/unemployment) insurance — a small flat annual premium (AED 60/year for salaries ≤ AED 16,000/month; AED 120/year above that), not a percentage-of-salary contribution.
In addition to statutory leave, employees are entitled to the following statutory benefits:
The UAE's mandatory pension/social-security scheme (GPSSA, plus the Abu Dhabi Pension Fund for certain Abu Dhabi government-linked entities) applies only to UAE nationals and, under a separate GCC Unified Protection Extension System, to GCC nationals (Saudi, Bahraini, Kuwaiti, Omani, Qatari). It does not apply to non-GCC expatriate employees, who make up the large majority of RemoFirst's EOR placements.
The UAE does not operate a government-run workers' compensation fund. Occupational injury and disability protection is instead delivered through:
There is no separate payroll-based 'workers' compensation tax' — the employer's cost is an insurance premium that varies by industry risk and headcount rather than a fixed percentage of salary.
The UAE has no traditional severance or unemployment-pension scheme for expatriates. Instead, employees who complete at least one year of continuous service are entitled to a statutory End of Service Gratuity, calculated on the employee's last basic salary (excluding housing, transport, and other allowances):
Some free zones (e.g., DIFC) offer an optional employer-funded savings-scheme alternative (DEWS) to the accrual-based gratuity, but this is not the statutory default for mainland employment.
There is no statutory 13th or 14th month salary requirement under UAE labour law. Any additional annual bonus, profit share, or similar payment is entirely at the employer's discretion and, if offered, should be documented in the employment contract or company policy — it is not a legal entitlement.
P.S. our team speaks multiple languages and we'd love to chat in your preferred language if requested.
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), Australian Dollars (AUD), or Singapore Dollars (SGD) around the 15th of each month to make sure your employees are paid on time. 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).
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.
Whenever the employee or employer has a question about, or anything else related to international employment, they can speak with our customer support team to get answers from our team of experts.
