Key Takeaways for Hiring in the United Arab Emirates (UAE)
- Employment contracts — Must be in Arabic and English, include notice periods, job title, and working hours. Both fixed-term and open-ended contracts are allowed.
- Payroll compliance — Monthly payments in AED (or USD). No minimum wage. Employers must comply with WPS in mainland UAE. Social security contributions vary by nationality (Emiratis vs expats).
- Employee benefits — Mandatory health insurance (Dubai & Abu Dhabi), social security for Emiratis (GPSSA), and end-of-service gratuity (EOSB) for employees with 1+ year of service.
- Leave entitlements — 20 working days annual leave after 3 months, 8 paid public holidays, generous parental benefits. ADGM allows 5-day carry forward.
- Remote hiring / EOR — You can hire in the UAE without a local entity by using an Employer of Record (EOR) like RemotePass.
- Offboarding process — Final payments must be made within 21 days. Visa cancellation required. Employer must arrange repatriation flight. Employee has 30 days to secure new sponsorship or leave the country.
Continent
Asia
Capital
Abu Dhabi
Currency
UAE Dirham (AED)
Language
Arabic
Payroll Cycle
Monthly
Pay Date
End of the month
VAT
5%
What Should You Know Before Hiring in the UAE?
The UAE has established itself as one of the most attractive business destinations in the Middle East, offering a strategic location, world-class infrastructure, and a diverse talent pool. However, hiring in the UAE requires navigating a complex regulatory landscape that varies depending on the jurisdiction where your company operates.
The UAE operates under a dual-jurisdiction system. Mainland companies fall under the Ministry of Human Resources and Emiratisation (MOHRE) and the recently enacted Federal Decree-Law No. 33 of 2021, which modernized UAE labour law effective February 2022. Free zone entities, on the other hand, follow their own zone-specific regulations — for example, the Dubai International Financial Centre (DIFC) has its own employment law (DIFC Law No. 2 of 2019), and the Abu Dhabi Global Market (ADGM) follows its Employment Regulations 2019.
Understanding which regulatory framework applies to your business is the first step in compliant hiring. Key differences include contract types, notice periods, end-of-service calculations, and dispute resolution mechanisms.
How Do Employment Contracts Work in the UAE?
Employment contracts in the UAE are the cornerstone of the employer-employee relationship. Under the new labour law (Federal Decree-Law No. 33/2021), all mainland employment contracts must be fixed-term, with a maximum duration of three years. Contracts are renewable, but the era of unlimited/open-ended contracts for mainland entities has ended.
Free zone entities may still offer different contract types depending on their specific regulations. For example, ADGM permits both fixed-term and indefinite contracts under its Employment Regulations 2019.
All employment contracts in the UAE must be in writing and registered with the relevant authority (MOHRE for mainland, or the applicable free zone authority). Contracts should be bilingual — Arabic and English — with Arabic being the legally prevailing language in the event of disputes for mainland entities.
Key contract provisions must include: job title and description, salary and allowances, working hours, probation period (maximum 6 months), notice period, and leave entitlements. Probation terms must be explicitly stated; during probation, either party may terminate with a 14-day written notice (mainland) or as specified by the relevant free zone authority.
What Do You Need to Include in a UAE Employment Contract?
| Element | Description |
|---|---|
| Employee Information | Full legal name and government-issued ID or passport number |
| Job Title & Role Description | Clearly defined role and responsibilities |
| Start Date | When employment begins |
| Contract Type & Duration | Fixed-term or open-ended, with specified length if applicable |
| Working Hours | Standard weekly hours, including any variations (e.g., Ramadan adjustments) |
| Probation Period | Length of probation and terms for early termination during this phase |
| Notice Periods | Required notice for resignation or termination by either party |
| Termination Clauses | Conditions for dismissal, resignation, or end of fixed-term agreements |
| Compensation & Benefits | Salary breakdown, allowances, and mandatory benefits like health insurance or end-of-service gratuity |
| Confidentiality & Non-Compete | Post-employment restrictions if applicable (limited to 2 years under new law) |
Note: ADGM or DIFC entities often require bilingual contracts (Arabic and English). Additional terms may apply based on zone-specific laws.
How Does Payroll Work in the UAE?
Understanding payroll in the UAE helps you stay compliant and plan salaries accurately. Especially since rules differ for UAE Nationals (Emiratis) and expatriate employees. The UAE’s Wage Protection System (WPS) requires all mainland employers to transfer salaries through approved banks or exchange houses, ensuring timely payment and transparency.
UAE Payroll Basics
| Field | Value |
|---|---|
| Salary Currency | AED (UAE Dirham, Dh), USD (US Dollars) |
| Minimum Wage | There is no minimum wage for Abu Dhabi or the ADGM |
| Hours per Week | Regular: 48 hours/week (8 hours/day); Ramadan: 36 hours/week (6 hours/day) |
| Payroll Frequency | Monthly |
| Pay Date | End of the month |
| Weekdays | Monday through Friday |
| Mandatory Bonuses | Not required |
Gross Salary Structure in the UAE
There is no standardized salary structure mandated by UAE law. Employers set salaries based on role, experience, industry, and market conditions. However, it is common practice to break compensation into a basic salary component plus allowances (housing, transport, education) — particularly relevant because end-of-service gratuity (EOSB) is typically calculated on basic salary only.
For ADGM and DIFC entities, compensation structures may follow international norms more closely, with total compensation packages often including performance bonuses, equity, and relocation allowances in addition to the base salary.
What Payroll Taxes Do Employers Pay in the UAE?
The UAE does not levy personal income tax on wages. However, employers are responsible for several mandatory contributions that vary based on the employee’s nationality.
UAE Nationals (Emiratis)
12.5%
In Abu Dhabi
15%
Expatriates
0%
| Contribution | UAE Nationals (Emiratis) | Expatriates |
|---|---|---|
| Social Security / Pension (GPSSA) | 12.5% of salary (employer share) | Not required |
| Health Insurance | Mandatory in Abu Dhabi & Dubai (employer-funded) | Mandatory in Abu Dhabi & Dubai (employer-funded) |
| Unemployment Insurance | Small annual premium (~AED 5–10/month) | Small annual premium (~AED 5–10/month) |
For Emirati employees, the employer must register with GPSSA (General Pension and Social Security Authority) and contribute 12.5% of the employee’s salary. The employee contributes an additional 5%. For expatriate employees, there are no mandatory pension or social security contributions.
What Payroll Deductions Are Taken From Employees?
Individual Income Tax
No individual income tax. The UAE does not impose personal income tax on wages, salaries, or employment income. Employees receive their full gross salary without any income tax deductions. This applies to all employees regardless of nationality.
Social Contributions
UAE Nationals (Emiratis): Employees contribute 5% of their salary to GPSSA. Employees who joined the pension scheme before a certain date contribute 11% instead of 5% (this applies to a small group of legacy participants).
Expatriates: No social security or pension contributions are required from expatriate employees. No deductions are made from their gross salary for social purposes.
What Employee Benefits Are Mandatory in the UAE?
The UAE mandates several employee benefits that employers must provide. These apply to all employees, though specifics vary by emirate and jurisdiction (mainland vs free zone).
| Benefit | Mandatory? | Notes |
|---|---|---|
| Health Insurance | Yes, in several emirates including Dubai and Abu Dhabi | Employers must provide health insurance meeting local authority standards. In other emirates, optional but commonly offered. |
| Pension / Social Security | Yes, only for UAE nationals (Emiratis) | Covered by GPSSA. Employer contributes 12.5%, employee contributes 5%. |
| End-of-Service Benefits (EOSB) | Yes | 21 days’ basic salary per year (first 5 years), 30 days per year thereafter. Payable on any termination except gross misconduct. |
In Abu Dhabi, the Department of Health (DOH) mandates that employers provide health insurance for all employees and their dependants. The minimum coverage requirements are set by the Abu Dhabi Basic Health Insurance plan. In Dubai, the Dubai Health Authority (DHA) requires employers to provide insurance through ISAHD-approved plans with specified minimum benefit levels.
In other emirates (Sharjah, Ajman, Ras Al Khaimah, Umm Al Quwain, Fujairah), health insurance is not legally mandated but is widely offered as a standard benefit to attract talent. Many employers provide coverage voluntarily as part of competitive compensation packages.
What Leave Are Employees Entitled to in the UAE?
The UAE provides comprehensive leave entitlements covering annual leave, public holidays, sick leave, parental leave, and other special categories. Entitlements differ slightly between mainland UAE and free zone jurisdictions like ADGM.
Annual Leave
Employees are entitled to 20 working days of annual leave after completing 3 months of service. Leave accrues at a rate of 1/12th of the annual entitlement per month of service.
Under ADGM regulations, employees may carry forward up to 5 days of unused annual leave to the following year, subject to employer policy. Mainland UAE law requires employers to allow employees to take their leave within the year it accrues.
During annual leave, employees receive their full basic salary plus any fixed allowances. Employees who leave before completing one year of service are entitled to pro-rated annual leave based on days worked.
Public Holidays
The UAE observes 8 official public holidays per year. Islamic holidays are based on the lunar calendar, so exact dates change annually.
- January 1 — New Year’s Day
- The Prophet Mohammed’s Birthday (Mawlid al-Nabi)
- Al Isra and Al Mi’raj (The Prophet’s Ascension)
- Eid al-Fitr (two days)
- Eid al-Adha (three days)
- Islamic New Year (1 Muharram)
- Commemoration Day (November 30)
- UAE National Day (December 2)
If a public holiday falls on a weekend, the following working day is typically observed as a day off. Employees required to work on public holidays are entitled to overtime pay or a compensatory day off.
Sick Leave
After completing 3 months of service, employees are entitled to up to 90 days of sick leave per year under mainland UAE law. The payment structure is tiered:
- First 15 days — full pay
- Next 30 days — half pay
- Remaining 45 days — unpaid
Under ADGM regulations, sick leave entitlements and pay structures may differ. Employees must provide a medical certificate from an approved healthcare provider. An employer may terminate an employee who exhausts their full sick leave entitlement and is unable to return to work.
Maternity Leave
Female employees are entitled to 60 days of maternity leave under mainland UAE law: 45 days at full pay and 15 days at half pay. This can be taken starting up to 30 days before the expected delivery date.
After returning to work, new mothers are entitled to two nursing breaks per day (30 minutes each) for 6 months following delivery. An additional 45 days of unpaid leave may be granted if the mother or child has health complications (with a medical certificate).
Employers cannot terminate a female employee during maternity leave or because of pregnancy. Dismissal on these grounds is considered unlawful termination under Federal Decree-Law No. 33/2021.
Paternity Leave
Male employees are entitled to 5 working days of paid paternity leave under mainland UAE law (introduced in 2022). The leave must be taken within 6 months of the child’s birth.
ADGM regulations may provide different paternity leave entitlements. Check with the ADGM Employment Regulations for specific provisions.
Other Types of Leave
Hajj Pilgrimage Leave: Muslim employees are entitled to up to 30 days of unpaid leave for Hajj pilgrimage, once during their employment. This is a one-time entitlement.
Bereavement Leave: Employees are entitled to 5 days of paid leave upon the death of a spouse, and 3 days for the death of a parent, child, sibling, grandparent, or grandchild.
Study Leave: Employees enrolled in UAE-approved educational institutions may be granted up to 10 days of study leave per year (mainland UAE). This is typically unpaid unless the employer’s policy states otherwise.
How Do Terminations and Resignations Work in the UAE?
Different types of termination have different notice requirements and severance obligations. Knowing the rules upfront protects both your business and employees. The UAE’s new labour law (2022) provides clearer frameworks for all termination scenarios.
Termination Types
| Type | Possible? |
|---|---|
| Termination for cause (poor performance, misconduct, etc.) | Yes |
| Termination without cause | Yes |
| Mutual Termination Agreement (MTA) | Yes |
| Redundancy | Not possible under EOR setup. EOR handles staffing changes. |
Final Payment Timeline
All final dues — salary, unused leave, and end-of-service benefits (EOSB) — must be paid within 14 days of the employee’s last working day under the new UAE labour law. ADGM entities may follow different timelines.
Form
Written notice is required — either a formal signed letter or a clear email. Verbal resignations are not legally binding under UAE law.
Notice Period
During probation: 14 days’ written notice (mainland) or as specified by the free zone authority.
After probation: 30 days’ notice (or as specified in the employment contract; may be up to 90 days for senior roles).
Payment Instead of Notice
Either party may elect to pay salary in lieu of the notice period. This must be explicitly agreed or included in the contract terms.
Termination Documentation
Required documents include: written resignation notice, final dues calculation letter, experience certificate, and cancellation of work permit/visa.
Final Payment Timing and Compliance
All final dues (salary, unused leave, EOSB) must be paid within 14 days of the last working day under the new law. ADGM entities may have different timelines per their regulations.
Penalty: Employers who fail to pay final dues on time may face penalties including daily wage accrual for each day of delay.
Employers must arrange a repatriation flight for the departing employee (if applicable and requested).
Visa and Immigration Compliance
The employer must cancel the employee’s work permit and residence visa within 30 days of the last working day. The employee then has 30 days from visa cancellation to either secure new sponsorship, switch to another visa type, or exit the UAE.
An employer may terminate an employee for cause (also called “dismissal for gross misconduct”) without notice or EOSB under specific circumstances defined in Article 44 of Federal Decree-Law No. 33/2021.
Grounds for Termination with Cause
- Assuming a false identity or submitting forged documents
- Committing a mistake resulting in substantial material loss to the employer
- Violating safety instructions (if posted in a visible location)
- Failing to perform basic duties despite written warnings
- Revealing work secrets that caused or could cause losses
- Being found intoxicated or under the influence of drugs during working hours
- Assaulting the employer, manager, or a colleague
- Being absent for more than 20 non-consecutive days or 7 consecutive days in one year without valid reason
The employer must conduct a proper investigation and document the cause before termination. The employee may challenge the dismissal through MOHRE or the relevant free zone authority’s dispute resolution mechanism.
Under the new UAE labour law, an employer may terminate a fixed-term contract before its expiry date by providing the agreed notice period (minimum 30 days, maximum 90 days as specified in the contract).
The employer must have a legitimate, non-discriminatory reason for termination. Acceptable reasons include restructuring, role elimination, or unsatisfactory performance after documented warnings and a performance improvement plan.
Severance Obligations
- Notice period: Must be served or paid in lieu
- EOSB: Full end-of-service gratuity (21 days’ basic salary per year for first 5 years, 30 days per year thereafter)
- Unused leave: Must be paid out
- Early termination compensation: If the contract is terminated before expiry without cause, the employee may be entitled to compensation equal to their salary for the remaining contract period (capped at 3 months’ salary)
The employer must provide a written termination letter stating the reason and effective date. The employee has the right to dispute the termination through MOHRE conciliation.
Both employer and employee may agree to end the employment relationship through a Mutual Termination Agreement (MTA). This is the most flexible termination method and is commonly used for amicable separations.
Process
- Both parties negotiate and sign a written agreement
- The agreement should specify: last working day, notice period (if any), EOSB calculation, unused leave payout, any additional compensation, and visa cancellation timeline
- Both parties should have independent legal advice before signing
An MTA can waive or modify the standard notice period if both parties agree. EOSB remains a statutory entitlement and cannot be waived below the legal minimum, even in an MTA.
When a fixed-term contract reaches its natural end date, the employment relationship terminates automatically unless the contract is renewed.
Renewal
If both parties wish to continue, a new fixed-term contract (maximum 3 years) must be signed. If the employee continues working after contract expiry without a new agreement, the old contract terms are deemed to continue under the same conditions.
Non-Renewal
Either party may choose not to renew the contract at expiry. A notice of non-renewal should be given at least 30 days before the contract end date (or as specified in the contract). The employer must pay all accrued EOSB and unused leave upon non-renewal.
Early Termination
If either party wishes to terminate a fixed-term contract before expiry, the terminating party must provide the agreed notice period and may owe compensation to the other party (up to 3 months’ salary or the remaining contract value, whichever is less).
Supporting Guides
Frequently Asked Questions
Do I need a local entity to hire in the UAE?
No. You can hire employees in the UAE without setting up a legal entity by using an Employer of Record (EOR) like RemotePass. The EOR acts as the legal employer, handling visa sponsorship, payroll through WPS, health insurance, and EOSB compliance. This is the fastest route for companies hiring 1–10 employees in the UAE.
Is there income tax for employees in the UAE?
No. The UAE has 0% personal income tax. Employees keep their full gross salary. Employers bear additional costs through GPSSA contributions (for Emirati nationals, 12.5% of salary), mandatory health insurance, and end-of-service gratuity (EOSB) provisioning.
Are health benefits mandatory in the UAE?
Yes, in Abu Dhabi and Dubai. Employers are legally required to provide health insurance for all employees. The minimum coverage requirements vary by emirate. In Abu Dhabi, the DOH mandates basic coverage; in Dubai, DHA sets minimum benefit levels through ISAHD. In other emirates, health insurance is not legally mandatory but is widely provided.
Can I terminate an employee without cause in the UAE?
Yes, but you must provide the contractual notice period (30–90 days), pay all accrued EOSB, unused annual leave, and any early termination compensation if the fixed-term contract has not expired. The reason for termination must be legitimate and non-discriminatory. The employee can dispute the termination through MOHRE conciliation.
What’s the difference between EOSB and DEWS in the UAE?
EOSB (End-of-Service Benefits) is the traditional lump-sum gratuity payment calculated at 21 days’ basic salary per year (first 5 years) and 30 days per year thereafter, paid upon termination. DEWS (DIFC Employee Workplace Savings) is a modern alternative used in the DIFC free zone — instead of a lump-sum gratuity, employers make monthly contributions (5.83% or 8.33% of basic salary) into a managed savings plan that the employee can access upon departure.
What happens after a visa is cancelled in the UAE?
After visa cancellation, the employee has a 30-day grace period to either: (1) secure a new employer to sponsor their visa, (2) switch to a different visa type (tourist, freelancer, golden visa), or (3) exit the UAE. Overstaying the grace period results in daily fines and potential immigration bans. The previous employer is responsible for visa cancellation and must initiate the process within 30 days of the last working day.
