Payroll and Benefits Guide United Arab Emirates
Last updated: Jul 29, 2025
Contribution
For expats, no employer or employee contributions & taxes are applied. The following table applies for local workers:
| Employer Payroll Contributions | |
|
12.50%
|
Social Security (basic social security plus housing allowance, based on monthly minimum of 20,000 AED and maximum of 70,000 AED for private sector workers and 100,000 AED for public sector)
A higher rate of 15% is applied in the Emirate of Abu Dhabi. |
| 0.25% (Dubai)/0.10% (Abu Dhabi) |
Workmen’s Compensation Insurance
|
|
Variable
|
Emiritization fee- Companies must meet a ratio of 6% local hire by the end of 2024, increasing by 1% every six months until it reaches 10% at the end of 2026. Companies who fail to meet the ratio incur an additional cost, which varies per company setup.
|
| 12.65% | Total Employment Cost |
| Payroll Contributions | |
|
11.00%
|
Social security (basic social security plus housing allowance, based on monthly minimum of 20,000 AED and maximum of 50,000 AED). These contributions are for Emiratis only, no contributions for expats. |
|
5 AED/month
|
Unemployment Insurance: Income up to 16,000 AED |
|
10 AED/month
|
Unemployment Insurance: Income above 16,000 AED |
| 5.00% + 10 AED/month |
Total Employee Cost |
| Income Tax | |
| No personal income tax |
Federal Corporate Income Tax (CIT) has been introduced and will apply for fiscal years starting on or after 1 June 2023 as follows:
- 0% tax rate on income up to AED 375,000 (c. US$ 102,000)
- 9% tax rate on profits of income above AED 375,000
- 15% tax rate applied on large multinationals that generate consolidated global revenues above EUR 750m (c. AED 3.15 bn)
Employer taxes
Employee taxes
Minimum Wage
General
There is no minimum salary stipulated in the UAE Labour Law, however it broadly mentions that salaries must cover basic needs of the employees. All employers registered with Ministry of Human Resources and Emiratisation (MoHRE) must subscribe to the ‘Wages Protection System (WPS)’ and pay the wages to their employees through it, as per the due dates.
Under this system, salaries of employees will be transferred to their accounts in banks or financial institutions, which are authorised by Central Bank of the UAE to provide the service.
MINIMUM WAGE (PER MONTH)
Payroll
Payroll Cycle
The payroll cycle in UAE is generally monthly, with payment made on the last working day.
13th Salary
There is no requirement for a 13th-month salary payment in the United Arab Emirates.
Working Hours
General
Private sector employers work 8 hours per day and up to 48 hours per week, Monday to Friday. Public sector employees work week is reduced to four and a half days, with the weekend running from Friday afternoon to Sunday.
Employees who wish to attend Friday congregational prayers should be given the flexibility to work remotely, or to be provided with an extended break to attend prayers.
Usual business hours are from 08:00 to 13:00, resuming after the temperatures have begun to cool from 16:00 and continuing until 19:00.
During Ramadan, the working day may be shorter (reduced by 2 hours each day) and Free Zones may also have different working hours.
Overtime
South Korean law establishes a 52-hour maximum work week for most employees, a restriction enforced with criminal penalties for violation.
- Maximum Ordinary Hours (LSA Article 50): The standard work limit is 8 hours per day and 40 hours per week.
- Maximum Overtime Limit (LSA Article 53): Work hours may be extended by up to 12 hours per week with the agreement of the employer and employee.
- Total Weekly Cap: The total working hours (ordinary + overtime) must not exceed 52 hours per week for most employees.
- Consent: Overtime work is only permitted with mutual consent between the employer and the employee.
Mandatory Overtime Pay Rates (LSA Article 56)
The Labour Standards Act mandates specific minimum premium rates for extended, night, and holiday work. These rates are cumulative.
| Day/Condition | Minimum Premium Rate (Applied to Ordinary Wage) | Total Pay Rate | Notes |
| Extended Work (Overtime) | +50% | 150% | For work exceeding 8 hours per day or 40 hours per week. |
| Holiday Work (Rest Day/Public Holiday) | +50% | 150% | For work up to the first 8 hours on a designated rest day or public holiday. |
| Heavy Holiday Work | +100% | 200% | For work exceeding 8 hours on a designated rest day or public holiday. |
| Night Work | +50% | 150% | For work performed between 10:00 PM and 6:00 AM. This premium is added to any other applicable premium (e.g., overtime or holiday pay). |
Example of Cumulative Rate:
If an employee works overtime at night (10:00 PM to 6:00 AM) on a regular workday, the premium is 100% (50% for overtime + 50% for night work), resulting in a total pay rate of 200% of the ordinary wage for those hours.
Leave
Annual Leave (vacation)
Workers are entitled to a minimum of 30 calendar days paid leave each year, following completion of 1-year service. For employment over 6 months but less than 1 year the worker accrues 2 days per month. The employer is required to pay the employee’s salary before the commencement of annual leave.
Annual leave should be used within the allotted year, unless a carryover policy has been set by the company.
Public Holidays
The local Government decides each year if holidays falling on the weekend are lost or moved to a working day in lieu.
Religious holidays are determined by the lunar cycle and will show as “Tentative” until they are confirmed nearer the date of the holiday.
| Date | Day | Holiday | Notes |
|---|---|---|---|
| 1 January 2026 | Thursday | New Year’s Day | Standard holiday |
| 20 March 2026 | Friday | Eid al-Fitr | |
| 21 March 2026 | Saturday | Eid al-Fitr Holiday | |
| 22 March 2026 | Sunday | Eid al-Fitr Holiday | |
| 26 May 2026 | Tuesday | Arafat Day | |
| 27 May 2026 | Wednesday | Eid al-Adha | |
| 28 May 2026 | Thursday | Eid al-Adha Holiday | |
| 29 May 2026 | Friday | Eid al-Adha Holiday | |
| 16 June 2026 | Tuesday | Islamic New Year | |
| 25 August 2026 | Tuesday | Prophet Muhammad’s Birthday | |
| 2 December 2026 | Wednesday | National Day | Standard holiday |
| 3 December 2026 | Thursday | National Day Holiday | Standard holiday |
Sick Days
All employees who have completed three months of service are entitled to paid sick leave up to a maximum of 90 days per year and must provide a medical certificate within 48 hours of the first day of sickness.
For the first 15 days of sickness, the employee is entitled to 100% of the regular salary rate of pay. This reduces to 50% for the next 30 days, and any subsequent sickness in one year is unpaid (90 days total per year).
Sickness should be reported within 3 working days.
Maternity Leave
Female employees are guaranteed maternity leave under the provisions of the Labor Code, irrespective of whether it is explicitly stated in their employment contracts.
All female employees are entitled to maternity leave of 60 days. The first 45 days are paid at 100% of the regular salary rate, reducing to 50% of the regular salary rate for the remaining 15 days. The employee can take maternity leave before and after the due date.
Employees are also entitled to take up to an additional 45 days (consecutive or intermittent) of unpaid leave due to a medical condition related to pregnancy or delivery upon producing a professional medical certificate.
Upon returning from maternity leave, and for a period not exceeding 6 months from the date of delivery, a female worker is entitled to one or two rest periods per day for breastfeeding, each not exceeding one hour.
It is not permitted to terminate employment due to pregnancy or absence due to maternity leave.
Paternity Leave
Fathers can take leave following the baby’s birth under the Parental Leave regulations.
Parental Leave
Private sector employees (men and women) are entitled to 5 working days’ paid parental leave. Employees may take leave from the time the child is born until the child reaches the age of 6 months.
Proof of birth of a child must be provided when requesting this leave.
Other Leave
Under the labor law, the following leaves are available to workers:
Bereavement Leave
- 5 working days in the event of the death of an employee’s spouse
- 3 working days in the event of the death of an employee’s mother, father, son, brother, sister, grandson or grandparent
Study Leave
Employees affiliated/studying with an approved UAE education instruction will be entitled to 10 working days study leave once they have completed 2 years of service.
Hajj or Umrah Leave
Hajj or Umrah leave may be granted once during ones employment with the company for up to 30 days unpaid and subject to the employer’s approval.
PAID MATERNITY LEAVE (DAYS)
Termination
Termination Process
Each party to the employment contract may terminate the contract for a legitimate reason. Legitimate reason is not defined under UAE labor law, however it includes performance or behavioural issues, redundancy, bankruptcy and insolvency, and failure of the worker to renew a work permit.
| Salary payment interval / date | Final payment on termination | Bank account/payment-method requirement |
|---|---|---|
| Wages must be paid at agreed intervals; for monthly-paid employees this is typically monthly, and payment must be within a “reasonable period” after the end of the pay period (employer-guidance indicates pays should be paid by the 10th of the following month). | When employment ends the employer must pay all outstanding wages, any unused leave, and the statutory end-of-service gratuity (if eligible). Employer-guidance indicates final settlement must be completed “within 14 days” after contract ends. | Payment must be made “by the employer to the worker” in money/legal tender. The employer’s liability is discharged when payment is made into the employee’s bank account or the worker signs a receipt confirming payment. |
Notice Period
A minimum of 30 days mandatory notice period is required and no more than 90 days.
For workers under Dubai International Financial Centre (DIFC) the notice period is determined by their length of employment. This can be given as notice days to be worked or paid in lieu of notice, as below:
- Less than 3 months of employment – 7 days notice.
- Between 3 months and 5 years of employment- 1 month’s notice
- 5+ years of employment- 90 days’ notice
During the probation period only 14 days must be given; if a worker resigns during probation to move to a new company in the UAE they must give 30 days’ notice, however, if a foreign worker is leaving the UAE then they just need to give 14 days’ notice.
Severance Pay
A worker is entitled to End of Service Gratuity (EOSG) upon termination or resignation.
After completing a full year of service (in both resignation and termination), a worker will be entitled to Gratuity.
The gratuity pay is 21 days’ salary for each year in the first 5 years of service, and 30 days’ salary for each year exceeding such period. The amount paid out for the time worked above a full year will be prorated.
If the reason for termination is not recognized by UAE law, the employee may be entitled to additional compensation of 3 months’ pay.
Probation Period
Probation period may not exceed 6 months.
During probation, any party desiring to terminate employment must give at least 14 days’ notice. When a resigned employee is joining another UAE-based company, at least 30 days’ notice must be given.
In certain circumstances, when an employee leaves during the probation period the employer might be able to recoup some of the recruitment costs from the new employer.
Minimal Statutory Termination Costs
PTO cash out
Air ticket cost (if the worker is an expat and leaving the UAE), subject that the worker will show proof of the cost,
Any pending bonuses, commissions, expenses and any other compensation agreed directly between the client and the worker.
Statutory Notice Period Under Probation Period: 14 days
Notice Period amount after probation: minimum 30 day maximum 90 days
Severance:
After completing 1 year of service, worker will be entitled to gratuity (the UAE term for severance), according to the worker’s seniority:
1-5 years of service, the worker is entitled to 21 days, per each year worked
5 years of service and more – 30 days, per each year worked
Setting Up a Business
Setting up a legal entity
The process of establishing a business in the UAE has a number of steps including:
Identifying the nature of the activity– this will define the legal form of the company and the type of licences required
Identifying the legal form, the legal form mainly depends on the business requirements and identifies the laws and regulations to be complied with.
Reservation and registration of the trade name, apply for registration of the trade name through the Department of Economic Development in each Emirate or through its website or smart application.
Application for initial approval, initial approval means that the UAE Government does not have any objection to establishing the entity in the State and indicates that the next step for obtaining the commercial license could be taken. However, it does not constitute authorization to operate or to begin the practice of the business immediately. Foreign investors must obtain the approval of the General Directorate of Residency and Foreigners Affairs (GDRFA) before obtaining the initial approval. Activities relating to legal affairs or securities require, prior to submission of application for initial approval from the government authoritiesץ
Memorandum of association, Depending on the legal form of the company, a memorandum of association may be required to be prepared and signed. A memorandum of association shall be made if the company takes any of the following legal forms:
Partnership, limited partnership, limited liability company, private joint stock company, public joint stock company.
Selection of the location or address of the commercial activity, all companies in the UAE must have an actual address for the economic activity. The commercial building and location must meet the requirements of the Department of Economic Development in each Emirate and the regulations of zoning by the municipality or the competent authority.
Obtaining additional government approvals, In certain cases, the activities require obtaining special approvals for licensing from (federal or local) government authorities regulating such activities.
Receipt of a license, upon completion of the above steps, the customer may receive the commercial license through the service centers of the economic departments or through the electronic service platforms of the department.
Registration with the Chamber of Commerce, Membership of the Chamber of Commerce of the relevant Emirate might be required before proceeding with carrying on the economic activity.
The Federal Government provides (Basher) service for establishing of business. Basher is an integrated eService which enables investors to establish companies in the UAE through an integrated online platform which is linked with the local and federal government entities concerned with licensing of economic activities in the State.
Registration as an employer
Employers must be registered with the Ministry of Labour (MOL) with the exception of those located in free zones which are not subject to the Law. Under the law on Wages Protection Program (WPS), the employer must have a bank account with one of the banks operating in UAE. The company should enter into contract with any bank, bureau de change or financial institution approved and authorised by the Central Bank of the UAE to provide the services.
Pension and Social Security contributions are applicable only for UAE Nationals. An employer who hires a UAE National must be registered with the General Pension and Social Security Authority one month after the joining date of UAE Nationals.
New Employee Registration
There are no registration requirements for new starters however new hires must be registered with the Ministry of
Labour at the time of employment.
Common Benefits
-
Meal vouchers – approx. 70 AED
-
Gym/Wellness – approx. 200 AED (per month)
-
Transport/Commuting – approx. 1,200 AED (per month)
-
Per diem – approx. 1,500 AED
-
Bonus – 10% of salary per month (average)
-
Additional leave – maximum 40 days (10 more than the law)
-
Study allowance – approx. 10,000 AED per year
-
Family health care allowance – 10-15,000 AED per year
-
Child education allowance – approx. 10,000 per child per year
-
Cell phone allowance – approx. 200 AED per month
- Flights home each year for expat workers.
Immigration
Any foreigners coming to work in UAE will need to be registered with the UAE immigration authorities. All foreigners must have secured a job offer from a company operating in the UAE, and some require specific qualifications that the ministry of foreign affairs may require.
To work in Dubai, a UAE employment permit/work permit is required. In general, these are valid for up to two years for anyone offered a job in the UAE and provides the right to live and work in the UAE for the duration of the visa, which is renewable after two years.
Companies who fail to meet the Government quotas on local hires must pay a monthly Emiritisation fee, as mandated across legislation including Ministerial Resolution numbers: 663 (2022), 258 (2022), 279 (2022) and Cabinet Resolution number 21 (2020).
VAT
General
The standard rate is 5%.
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Payroll and Benefits Guide
in United Arab Emirates
What’s covered in this guide:
- Employer/employee contributions
- Minimum wage
- Working hours
- Visa requirements
And more...
Public Holidays Calendar
| Date | Day | Holiday | Notes |
|---|---|---|---|
| 1 January 2026 | Thursday | New Year’s Day | Standard holiday |
| 20 March 2026 | Friday | Eid al-Fitr | |
| 21 March 2026 | Saturday | Eid al-Fitr Holiday | |
| 22 March 2026 | Sunday | Eid al-Fitr Holiday | |
| 26 May 2026 | Tuesday | Arafat Day | |
| 27 May 2026 | Wednesday | Eid al-Adha | |
| 28 May 2026 | Thursday | Eid al-Adha Holiday | |
| 29 May 2026 | Friday | Eid al-Adha Holiday | |
| 16 June 2026 | Tuesday | Islamic New Year | |
| 25 August 2026 | Tuesday | Prophet Muhammad’s Birthday | |
| 2 December 2026 | Wednesday | National Day | Standard holiday |
| 3 December 2026 | Thursday | National Day Holiday | Standard holiday |
Is overtime pay based on the employee’s basic salary, or the gross salary that includes housing allowance, transportation allowance, etc.?
All overtime bonuses must be based on the gross salary of the employee.
Can an employer dismiss an employee who exceeds their annual leave?
Hi Salma, An employer can dismiss an employer if they have exceeded their leave by 7 or more days.
Super, Can we get PayItems that is more important and special information to be captured as a part of personnel information specially for Dubai payroll
Hi, can you please clarify what you are looking for?
Dear Sir,
Our management has decided to change the salary structure where we use to pay 60% of Gross Salary as Basic Salary. Now the management want to change the basic salary of employee to 40% and remaining amount to be included as other allowance. There will not be any salary decrease but there will be change in the basic salary percentage is it allowed. (This company is in UAE – Dubai, mainland company)
Is it legal to take this step if yes then under which article can the change take place.
Unfortunately, we’re not able to offer legal advice with regard to your issue. Please seek legal advice in this matter
For salespeople that also get a commission, does the employer pay the 12.5% social tax on the commission too?
12.5% is only paid for by local workers, not expat workers – which worker type are they referring to? Expat workers do not pay taxes.
What if I want to request cancelation of visa to my employer is their anything I pay and if I pay how much I pay
Typically it is the employer who cancels your work visa and pays for it. The cost is usually between 100 and 200 AED.
How much shall be the basic salary from the package in Dubai mainland?
For expatriates, there is no mandatory minimum wage. For UAE nationals, the minimum wage is determined by their level of education.
If my visa is cancelled how many months do I have until it expires
Visa cancellation typically takes 1 to 2 days. When a visa is canceled, a tourist has a grace period of 10 days, and a resident has a grace period of 30 days.
As per the new Labour law from Feb 2022, is the vacation salary paid only on Basic Salary including housing or Gross salary ?
Under the new labor law, employees will be entitled to full payment of annual leave if they take annual leave during the working period. Employees who resigned or were terminated will be paid for annual leave on their basic salary.
Now my employer has revoked my visa.” It’s been almost three years since I worked here. Can I now issue instructions to provide the amount i deserve for my service here?
When a worker is terminated, they should be paid out any owed severance/gratuity as part of the off-boarding and final payments.
What is the average travel allowance for Sales staff in the UAE?
Companies have complete discretion as to whether they will offer travel allowance and how much they will offer. Companies can give fixed amounts for these expenses for travel.
Dear Erez,
Kindly advise what law/notes regulates the per diem limits traveling for business from UAE abroad in 2023? I find no information in the internet/ Thank you!
Hello, there are no set per diems in UAE.
Do burden cost apply to employees that are working on a visa?
Hello, can you please explain what you mean by “burden cost”?
Do you have a guide to what figures are typically offered as Transport Allowance in the UAE?
Usually, the transportation allowance will be a quarter of the gross salary.
Hello
Good Day,I a Seaman with mission visa working here in Abu Dhabi.Before we departed phillipines we have a Seaman contact to be paid per month.Every month we stay here in Abu dhabi our company deposited 1000 Dirhams as Salary as per UAE regulation.But this 1000 dirahms per month we recieved our company deducted it from our salary.My question Is if this legal?
Unfortunately, we are unable to provide any guidance to the question, We recommend reviewing the specific terms of employment contracts or contact a local legal/ HR expert.
Do you have to provide medical insurance for a Dubai employee from day 1 or within 30 days of their start date?
In UAE, as soon as a worker’s application of sponsorship of the Emirates ID or Work Permit has been approved it is mandatory for the employer to begin providing the worker with medical insurance. If cost management is a concern, it is advised to initiate the visa/work permit process at a later stage where possible, depending on the current visa status, to align closer to the workers actual start date.
It is not permitted at any point for the worker not to be covered for medical.