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EOR IN United Arab Emirates (UAE)
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A guide to employing and growing your team in United Arab Emirates (UAE)
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The United Arab Emirates is an elective monarchy of seven emirates. The UAE’s employment landscape is governed by Federal Decree-Law No. 33 of 2021, which covers most private sector companies. The market has shifted entirely to fixed-term contracts (not exceeding 3 years but renewable) to increase labor flexibility. A major 2026 development is the nationwide enforcement of a minimum wage for Emirati nationals, while expatriate pay remains contract-based but must meet “essential needs.” Most private sector salaries must be paid through the Wages Protection System (WPS) to ensure transparency and timely payment.
Employer Contributions
Pension (GPSSA/ADPF): 12.5% (Dubai/Northern Emirates) or 15% (Abu Dhabi)
Health Insurance: Mandatory (Basic plans ~AED 320-900/year per employee)
Occupational Hazards: Included in Social Security (GOSI)
Emiratisation Fines (if non-compliant): ~AED 9,000/month per missing national
Total Employer Contribution: 12.5% – 15% (plus insurance and compliance costs)
Employee Payroll Taxes
Social Security (Emirati & GCC): 5% (Deducted from gross salary)
Expatriates: 0% (No social security deductions)
Involuntary Loss of Employment (ILOE): Mandatory monthly subscription (AED 5 or AED 10 based on salary)
Total Employee Contribution: 0% (Expatriates) to 5% (Emiratis)
Employee Income Tax Rates
The UAE maintains its status as a tax-free haven for personal employment income.
Personal Salary Tax: 0% (Regardless of income bracket)
Corporate Tax: A 9% rate applies to business profits over AED 375,000, but it does not apply to employment wages, bonuses, or personal benefits.
Statutory Leave
Employees are entitled to 30 calendar days of paid annual leave after one year of service. In 2026, the UAE observes approximately 14 public holidays, including major breaks for Eid Al Fitr (March) and Eid Al Adha (May). Unused leave can be encashed at the end of service based on the basic salary.
Pregnancy and Maternity Leave
Female employees receive 60 days of maternity leave: 45 days at full pay and 15 days at half pay. This is a protected right from day one of employment. Mothers are also entitled to two fully paid nursing breaks (totalling one hour daily) for 6 months after delivery.
Paternity Leave
Both parents are entitled to 5 business days of paid parental leave, which can be taken consecutively or intermittently within the first 6 months of the child’s birth.
Work-Related Injury Leave
Sick Leave: Up to 90 days per year (15 days full pay, 30 days half pay, 45 days unpaid).
Bereavement Leave: 5 days for a spouse; 3 days for an immediate family member.
Study Leave: 10 working days (for employees with 2+ years of service).
Termination Process
Termination must be based on valid grounds. For expatriates, the End-of-Service Gratuity is calculated based on the basic salary: 21 days for each of the first 5 years and 30 days for each subsequent year. Total gratuity cannot exceed two years’ wages.
Notice Period
Under the 2021 Labor Law, the notice period must be between 30 and 90 days as specified in the contract. If an employer terminates without notice, they must pay “wages in lieu of notice” for the full duration of the required period.
Probation Period
The maximum probation period is 6 months. An employer can terminate during this phase with a 14-day written notice. If an employee resigns during probation to join a new UAE employer, they must provide 30 days’ notice.