Employer of Record Guide in United Arab Emirates
Expanding your team into the UAE opens doors to a thriving business hub where talent meets opportunity—but navigating local employment laws requires precision. Our comprehensive guide simplifies the complexities of UAE hiring, from visa requirements to cultural considerations, so you can focus on building your global team with confidence.
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The UAE stands as a premier destination for international talent, offering zero personal income tax and access to world-class professionals across AI, cybersecurity, and renewable energy sectors. With major economic centers like Dubai and Abu Dhabi driving innovation, understanding the local market dynamics is essential for successful expansion.
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Your EOR guide in United Arab Emirates
From payroll cycles to public holidays, UAE employment regulations have unique characteristics that differ significantly from other markets. This practical guide breaks down everything you need to know about compensation structures, leave policies, and compliance requirements to hire and manage your UAE workforce effectively.
Minimum Wage
The UAE does not have a federally mandated minimum wage for private sector employees. However, certain emirates and specific sectors may have established minimum wage requirements:
- Dubai: No official minimum wage for private sector
- Abu Dhabi: No official minimum wage for private sector
- Federal Government Employees: Minimum wage varies by position and nationality
- Domestic Workers: AED 1,500 per month (as of recent regulations)
Note: Salaries are typically negotiated based on market rates, qualifications, and industry standards.
Payroll Cycle
- Monthly: Most common payment frequency in the UAE
- Bi-weekly: Less common but acceptable
- Payment Method: Must be paid in UAE Dirhams (AED) through bank transfer or cash
- Payment Timing: Salaries must be paid by the end of each calendar month
Individual Income Tax
The UAE does not impose personal income tax on employment income for residents. This applies to:
- Salary and wages
- Bonuses and allowances
- End-of-service benefits
Note: UAE nationals and residents are not subject to personal income tax, making it an attractive destination for international talent.
Tax Residency Criteria
Tax residency in the UAE is primarily determined by:
- Physical presence of 183 days or more in a calendar year
- Having a residence visa and Emirates ID
- Maintaining substantial economic ties to the UAE
Employer Payroll Contributions
UAE employers are not required to make traditional payroll tax contributions. However, they must provide:
| Contribution Type | Employer Obligation |
|---|---|
| End-of-Service Gratuity | Accrued based on salary and tenure |
| Work Permit Fees | AED 2,000 - 5,000 annually |
| Health Insurance | Mandatory in most emirates |
| Visa Processing | AED 3,000 - 10,000 per employee |
Estimated Total Annual Cost: 5% - 15% of gross salary (excluding gratuity accrual)
Working Hours
The standard working schedule in the UAE is:
- Regular Hours: 8 hours per day, 48 hours per week (Sunday to Thursday)
- Ramadan Hours: 6 hours per day, 30 hours per week during Ramadan
- Friday: Half-day or full day off (varies by company)
- Weekend: Friday and Saturday (most common)
Senior management and certain professional roles may have flexible working arrangements outside standard hour requirements.
Overtime Pay
- Overtime Rate: 1.25× regular hourly rate for additional hours
- Daily Limit: Maximum 2 hours of overtime per day
- Weekly Limit: No more than 144 hours of overtime per year
- Calculation: Based on basic salary divided by 30 days, then by 8 hours
- Ramadan: Overtime rates may differ during the holy month
Bonus Payments
While not legally mandated, bonuses are common in UAE employment:
- Annual Bonus: Often equivalent to 1-3 months' salary
- Performance Bonuses: Based on individual or company performance
- Gratuity: Mandatory end-of-service payment based on tenure
Employment Classifications
- Full-time: Standard 48-hour work week with full benefits
- Part-time: Less than 48 hours per week (less common)
- Fixed-term Contracts: Specific duration with defined end date
- Unlimited Contracts: No specified end date (more common for senior roles)
Annual Leave
- Standard Entitlement: 30 calendar days per year after completing one year of service
- Pro-rata: Proportional leave for employees with less than one year
- Carry Forward: Up to 30 days can be carried to the following year
- Cash Payment: Unused leave must be paid out upon termination
Sick Leave
- Paid Sick Leave:
- First 15 days: Full pay
- Next 30 days: Half pay
- Remaining days: Unpaid
- Annual Limit: Maximum 90 days per year
- Medical Certificate: Required for absences exceeding 3 consecutive days
- Chronic Illness: Special provisions may apply
Maternity Leave
- Duration: 60 calendar days (45 days paid, 15 days unpaid)
- Eligibility: Must have worked for at least one year
- Pay: Full salary for first 45 days
- Job Protection: Position must be held during leave period
- Nursing Breaks: Two 30-minute breaks per day for nursing mothers
Paternity Leave
- Duration: 5 working days
- Pay: Full salary
- Timing: Must be taken within 6 months of child's birth
- Eligibility: Available to all male employees
Hajj Leave
- Duration: Up to 30 days (once during employment)
- Pay: Unpaid leave
- Eligibility: Muslim employees only
- Approval: Subject to employer approval and operational requirements
Bereavement Leave
- Duration: 3-5 days (varies by relationship to deceased)
- Pay: Typically paid
- Immediate Family: Spouse, children, parents, siblings
- Extended Family: May qualify for shorter periods
Summary
| Leave Type | Duration | Paid? | Funding |
|---|---|---|---|
| Annual Leave | 30 days/year | Yes | Employer |
| Sick Leave | Up to 90 days | Partially | Employer |
| Maternity Leave | 60 days | Partially | Employer |
| Paternity Leave | 5 days | Yes | Employer |
| Hajj Leave | 30 days | No | Unpaid |
| Bereavement | 3-5 days | Yes | Employer |
Termination Types
Termination With Cause:
- No notice or compensation required
- Must involve serious misconduct or breach of contract
- Requires proper documentation and due process
Termination Without Cause:
- Requires notice period or payment in lieu
- End-of-service gratuity must be paid
- Must comply with labour law procedures
Notice Period Requirements
Notice periods vary based on contract type and duration:
| Contract Type | Notice Period |
|---|---|
| Unlimited Contract | 30 days (either party) |
| Fixed-term Contract | 30 days (if terminated early) |
| Probationary Period | 14 days |
| Senior Management | 90 days (typically) |
End-of-Service Gratuity
Mandatory payment calculated as follows:
For employees with unlimited contracts:
- 21 days' salary for each of the first 5 years
- 30 days' salary for each year thereafter
For employees with fixed-term contracts:
- 21 days' salary for each year of service
Calculation based on basic salary only (excludes allowances)
Probationary Periods
- Duration: Up to 6 months (can be extended once for additional 6 months)
- Termination: Either party can terminate with 14 days' notice
- No Gratuity: End-of-service gratuity not applicable during probation
Final Pay Requirements
Employers must settle all dues within 14 days of termination:
- Outstanding salary
- Unused annual leave
- End-of-service gratuity
- Any other contractual benefits
Legal Protections
Employees are protected against termination for:
- Filing complaints with labour authorities
- Pregnancy (female employees)
- Exercising legal rights
- Discrimination based on nationality, religion, or gender
National Public Holidays (2025)
| Holiday | Date | Notes |
|---|---|---|
| New Year's Day | January 1 | Fixed |
| Eid Al Fitr | March 30-April 2 | Dates vary (lunar calendar) |
| Arafat Day | June 15 | Dates vary (lunar calendar) |
| Eid Al Adha | June 16-18 | Dates vary (lunar calendar) |
| Islamic New Year | June 26 | Dates vary (lunar calendar) |
| Prophet Muhammad's Birthday | September 4 | Dates vary (lunar calendar) |
| Commemoration Day | November 30 | Fixed |
| UAE National Day | December 2-3 | Fixed |
Note: Islamic holidays follow the lunar calendar and dates may vary. Additional days may be declared as public holidays by government decree.
Holiday Pay Rules
- Eligibility: Employees who have completed 6 months of service
- Pay Rate: Full basic salary for the holiday period
- Working on Holidays: Double pay plus compensatory time off
- Private Sector: May follow different holiday schedules with government approval
Emirate-Specific Holidays
Some emirates may observe additional local holidays:
- Dubai: Dubai Shopping Festival periods
- Abu Dhabi: Cultural celebration days
- Sharjah: Heritage and cultural observances
Required Documents for Employment
Employment Contract Requirements:
- Job title and description
- Salary and benefits breakdown
- Working hours and location
- Probationary period terms
- Termination clauses
- Confidentiality and non-compete provisions
Government Documentation:
- Emirates ID application
- Residence visa processing
- Work permit application
- Medical fitness certificate
- Educational credential attestation
Visa and Work Authorization
Employment Visa Process:
- Entry Permit: Employer applies for employee entry permit
- Medical Examination: Mandatory health screening in UAE
- Emirates ID: Biometric identification card application
- Residence Visa: Final visa stamping and approval
- Labour Card: Work authorization document
Timeline: 2-4 weeks for complete processing
Background Checks and Verification
Permitted Checks:
- Criminal background verification from home country
- Educational qualification attestation
- Previous employment verification
- Professional licensing verification (where applicable)
Requirements:
- All documents must be attested by UAE consulates
- Translation to Arabic may be required
- Medical fitness certificate from approved centres
Data Protection and Privacy
UAE data protection is governed by:
- Federal Data Protection Law: Comprehensive privacy regulations
- Dubai Data Law: Additional emirate-specific requirements
- Banking Secrecy: Financial information protection
Employer Obligations:
- Obtain consent for data collection
- Secure storage of employee information
- Limited data sharing with third parties
- Right to data correction and deletion
Cultural and Religious Considerations
Workplace Accommodations:
- Prayer time allowances for Muslim employees
- Ramadan working hour adjustments
- Modest dress code requirements
- Alcohol and pork restrictions in workplace
Onboarding Timeline
| Step | Timeline |
|---|---|
| Job offer acceptance | Day 0 |
| Entry permit application | Day 1-7 |
| Employee arrival in UAE | Day 7-14 |
| Medical examination | Day 14-16 |
| Emirates ID application | Day 16-18 |
| Residence visa stamping | Day 18-21 |
| Labour card processing | Day 21-28 |
Worker Classification
The UAE distinguishes between different types of workers:
Employees:
- Subject to UAE Labour Law
- Entitled to full benefits and protections
- Employer responsible for visa and work permits
Freelancers:
- Hold freelance permits in designated free zones
- Limited labour law protections
- Responsible for own visa arrangements
Contractors:
- Typically work through service agreements
- May require separate business licensing
- Limited employment law coverage
Free Zone Regulations
UAE free zones have separate employment regulations:
- DIFC: Dubai International Financial Centre
- ADGM: Abu Dhabi Global Market
- DMCC: Dubai Multi Commodities Centre
Each free zone may have distinct:
- Employment contract requirements
- Dispute resolution procedures
- Visa and licensing processes
Cultural Norms and Workplace Expectations
Communication Style:
- Respectful and hierarchical approach
- Importance of personal relationships
- Indirect communication in sensitive matters
Work-Life Balance:
- Family time highly valued
- Religious observances respected
- Flexible arrangements during Ramadan
Diversity and Inclusion:
- Multinational workforce environment
- Cultural sensitivity training recommended
- Gender equality initiatives increasing
Remote Work Considerations
Remote work regulations in the UAE:
- Dubai: Remote work visa programme available
- Federal Level: Limited remote work provisions
- Taxation: No impact on tax-free status
- Visa Requirements: May require specific remote work permits
Employer Responsibilities:
- Ensure compliance with UAE labour laws
- Provide necessary equipment and tools
- Maintain regular communication and supervision
- Consider time zone differences for international teams
Anti-Discrimination Laws
UAE employment law prohibits discrimination based on:
- Nationality (with some exceptions for UAE nationals)
- Religion
- Gender
- Age (within legal working age limits)
- Disability (reasonable accommodation required)
Enforcement:
- Ministry of Human Resources and Emiratisation
- Labour courts for dispute resolution
- Penalties for non-compliance
Built-in benefits packages for United Arab Emirates
When the world is your competition, it pays to incentivize new hires and existing alike. Borderless AI benefits packages typically inlucde:
Medical Insurance
Dental Insurance
Retirement Contribution
Life Insurance
Vision Insurance
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