How to Hire Employees in the UAE: Costs, Visas and EOR Options
What an expat hire really costs once gratuity and health insurance are counted, how the 2026 wage payment and Emiratisation rules work, and when an employer of record beats a mainland or free zone company.
By No payroll tax, but a visa behind every hire
Nobody can work in the UAE without a work permit and residence visa sponsored by a licensed local establishment, so a foreign company with no licence cannot simply put someone on payroll. The choice is a mainland company licensed by an emirate, a free zone company, or an employer of record that sponsors the visa on its own licence. For one to five hires, an EOR is usually the right route, because a licence, office lease and visa quota cost more than the fee for years.
Expat employees carry no social security, no payroll tax and no income tax, so the statutory add-on is small: an end-of-service gratuity of 21 days of basic pay a year, plus employer-paid health insurance. What moves the budget is how you split the package between basic salary and allowances, because gratuity, overtime and leave pay all run on basic. UAE nationals are different: GPSSA pension adds 12.5% to 15% for the employer.
Employment terms and working conditions
Three of these six rules changed in 2026, and a missed salary date now triggers a permit freeze within five days, so check them before the offer letter goes out.
Cost of employing someone in the United Arab Emirates
For an expat hire the employer percentage barely moves with salary, because gratuity follows basic pay and there is no contribution ceiling to hit.
No pension or unemployment cost for an expat. Gratuity is the main line: AED 350 a month on an AED 6,000 basic. The flat insurance premium weighs most here, at 0.6% of pay.
Gratuity rises with basic pay, insurance does not. Insurance is shown at AED 700 a year, the Dubai basic plan level, and plans at this salary usually cost more. If this hire were an Emirati, GPSSA would add 15% of pensionable pay, since the 2.5% government share only applies below AED 20,000 a month.
After five years the gratuity rate rises from 21 to 30 days of basic pay, which would lift this line to AED 3,000. A health plan for a senior hire usually costs well above the basic floor.
Cards assume an expatriate employee in Dubai or the Northern Emirates, with basic salary set at 60% of the gross package and the rest paid as allowances. Gratuity: 21 days of basic wage per year for the first five years and 30 days after, capped at two years’ wage, payable after one year of service (Federal Decree-Law 33 of 2021, Art. 51), accrued monthly at 21/30 of a month’s basic per year. Health insurance: employer-paid in all emirates (Dubai Law 11 of 2013; Abu Dhabi Law 23 of 2005; national scheme for the Northern Emirates from 1 January 2025), shown at AED 700 a year, in line with the Dubai basic plan (EBP) rate of about AED 650 to 725 a year. Plans for staff earning above AED 4,000 a month usually cost AED 2,000 to 4,000 a year (Uppersetup, June 2026), so budget more for professional hires. ILOE unemployment insurance (AED 5 or AED 10 a month) is paid by the employee. GPSSA does not apply to expats; for UAE nationals who joined from 31 October 2023 the employer pays 12.5% below AED 20,000 a month and 15% from AED 20,000, on pay from AED 3,000 up to AED 70,000 a month (Federal Decree-Law 57 of 2023). Abu Dhabi nationals contribute to ADPF instead. GCC nationals contribute through the GCC extension scheme at their home-country rate. Visa, work permit and Emirates ID fees are one-off and not included. No income tax or payroll tax applies to salaries.
Price your hire, line by line
Pick a country and a salary. Every statutory contribution, ceiling and accrual is applied separately, so the total is close to what a provider will actually invoice.Compare other countries
Costs most calculators leave out
Private health cover, equipment stipend, meal or transport allowance.
Typically $0 to $2,000 depending on provider and country.
Refundable, but it ties up cash. Most providers hold one to two months.
Example. Change any field to make it yours.
Total employer cost, per employee per month
Monthly breakdown
Upfront and one-time costs
EOR or your own entity
Statutory rates current as of . Exchange rates indicative as of . Contribution ceilings, regional variation, employee age and collective agreements all shift the real figure. Use this to build a budget, then validate against a written quote.
Four ways to hire in the United Arab Emirates
The real decision is whose licence holds the visa: yours on the mainland, yours in a free zone, an EOR’s, or nobody’s.
Misclassification risk. The UAE risk is less about the contractor test and more about status: anyone working inside the country needs a work permit, and a “contractor” living in Dubai on a tourist or another company’s visa is working illegally. Since the 2024 amendment to the labour law, employing someone without a permit carries a fine of AED 100,000 to AED 1 million. Our misclassification penalties guide compares this with other countries.
Statutory leave and benefits
Every paid leave day here is funded by the employer, with no state reimbursement for sick or maternity pay. Leave pay and gratuity both run on basic wage, so a low basic share cuts what the employee receives on exit.
Federal Decree-Law 33 of 2021: annual leave Art. 29, maternity Art. 30, sick leave Art. 31, parental and bereavement leave Art. 32, gratuity Art. 51 (MOHRE consolidated text, checked October 2026). Public holidays: UAE Government portal, Cabinet Decision 27 of 2024, which stops holidays being moved when they fall on a weekend. ILOE: Federal Decree-Law 13 of 2022 and iloe.ae; AED 5 a month plus VAT where basic pay is AED 16,000 or less (benefit capped at AED 10,000 a month), AED 10 above that (capped at AED 20,000); non-subscription fine AED 400. Health insurance dependants: Abu Dhabi Law 23 of 2005; in Dubai and the Northern Emirates, dependants are the visa sponsor’s cost, usually the employee. GPSSA: Federal Decree-Law 57 of 2023, for nationals who joined from 31 October 2023. DIFC and ADGM have their own leave rules.
Termination and offboarding
UAE employment is not at will: ending a contract needs a lawful reason and 30 to 90 days of notice, and the bill depends on tenure and on whether a court finds the dismissal unlawful.
Federal Decree-Law 33 of 2021: probation Art. 9, notice Art. 43 (30 to 90 days; during employer notice the employee may take one unpaid day a week to job hunt), summary dismissal Art. 44 (ten grounds, including more than 7 consecutive or 20 intermittent days of unexcused absence), unlawful termination Art. 47, gratuity Art. 51, final dues within 14 days of the contract end Art. 53. When we read the MOHRE consolidated text in October 2026, Art. 51 made no deduction for resignation and no forfeiture for summary dismissal, unlike the 1980 law that older calculators still apply; the employer may only set off amounts owed under law or a judgment. Under Federal Decree-Law 9 of 2024, claims filed more than two years after the employment ends are dismissed, and MOHRE decides claims up to AED 50,000 itself (Art. 54). The employer pays the repatriation ticket unless the employee joins another employer (Art. 13). Under Cabinet Resolution 96 of 2023, an employer may instead join the voluntary end-of-service savings scheme and pay monthly contributions on basic wage into an approved fund; gratuity then stops accruing for enrolled staff, and gratuity earned before joining is kept (MOHRE). DIFC replaced gratuity with DEWS contributions of 5.83% of basic pay (8.33% after five years) from 1 February 2020; ADGM runs its own employment regulations.
Work permits and foreign hires
Every non-GCC employee needs a work permit and residence visa tied to a licensed sponsor, and an EOR can be that sponsor, which is the main reason companies use one here.
From decision to first payroll in 5 weeks
Through an EOR the visa sets the pace: the employee cannot start work until the work permit is issued, so plan the start date around it.
Choose jurisdiction and EOR
Decide whether the hire works on the mainland or in a free zone, then ask the EOR which licence will sponsor the visa. Agree the basic-to-allowance split now, since gratuity follows basic.
Offer in MOHRE format
Issue the MOHRE job offer with salary, allowances and probation of up to 6 months. The employee signs it before the work permit application, and the contract later matches it in Arabic.
Work and entry permit
The EOR files the MOHRE work permit. An overseas hire then receives an entry permit; someone already in the UAE changes visa status without leaving.
Medical, ID and insurance
Book the medical fitness test and Emirates ID biometrics, put the health policy in force, and stamp the residence visa. The employee subscribes to ILOE through iloe.ae or a bank app.
First WPS payroll
Open a salary account, enrol the employee in WPS and pay the month by the 1st of the next. For a UAE national, the EOR registers them with GPSSA within one month.
Best EOR providers in the United Arab Emirates
Four providers we have reviewed that employ in the United Arab Emirates. Full scoring and the ranked list sit on the United Arab Emirates EOR page.
The former Velocity Global says 90% of its employees sit on Pebl-owned entities. Lowest published starting price of the four; ask whether UAE visas run on its own licence.
Runs UAE contracts, visa sponsorship and payroll on one platform. Its $599 starting price is the second highest of the four, after Papaya Global, so compare the UAE quote line by line before signing.
Publishes tiered pricing: $459 on annual billing, $499 month to month. Around 11% of its countries carry adjusted prices, so confirm the UAE rate.
Payroll-first platform that suits companies running UAE staff beside a larger global payroll. Ask whose UAE licence will sponsor the visa before you sign.
Some links are referral links. We may earn a fee if you sign up, at no cost to you. It never changes our rankings.
All guides for hiring in the United Arab Emirates
Hiring guides for other countries
Compare employer costs, dismissal rules and EOR options in 14 more countries. Each guide is checked against official sources.
FranceHiring guide, 41.5% employer cost
GermanyHiring guide, 22.5% employer cost
NetherlandsHiring guide, 27.4% employer cost
SpainHiring guide, 54.2% employer cost
United KingdomHiring guide, 15.9% employer cost
AustraliaHiring guide, 20.3% employer cost
IndiaHiring guide, 5.7% employer cost
PhilippinesHiring guide, 17.1% employer cost
SingaporeHiring guide, 17.2% employer cost
TaiwanHiring guide, 17.1% employer cost
Questions employers ask about hiring in the United Arab Emirates
These are the points where UAE guidance online is most often stale: rules from the 1980 labour law, the old WPS grace period and 2025 Emiratisation fines.
Is there a minimum wage in the UAE?
Not for expatriates. Federal law sets no general minimum wage, so pay for foreign staff is whatever the contract says. UAE nationals are the exception: since 1 January 2026, MOHRE will not issue or renew an Emirati work permit below AED 6,000 a month, and existing Emirati staff had to be raised to that level by 30 June 2026. From 1 July 2026, an Emirati paid less no longer counts toward Emiratisation targets, and the company cannot get new work permits until the salary is corrected.
Do I pay social security for expat employees in the UAE?
No. GPSSA pension covers UAE nationals only, and GCC nationals contribute through the GCC extension scheme at their home-country rate. For an expat, the statutory cost is the end-of-service gratuity and employer-paid health insurance, which is why our Mid-level card comes to 3.8% of gross. ILOE unemployment insurance is compulsory too, but the employee pays the AED 5 or AED 10 monthly premium. If you hire an Emirati, budget 12.5% employer pension below AED 20,000 a month and 15% above it.
Is gratuity calculated on the full salary?
No, only on basic wage. Article 51 gives 21 days of the last basic wage for each of the first five years and 30 days for each year after, capped at two years’ wage, and only after one year of continuous service. Housing and transport allowances are excluded, so the split between basic and allowances in the offer letter sets the exit bill. Under the 2022 law, resigning no longer reduces gratuity, although several online calculators still apply the old one-third and two-thirds cuts.
Can I still pay salaries on the 10th of the month?
Not without risk since 1 June 2026. Ministerial Resolution 340 of 2026 makes each month’s wages due on the 1st of the following month, through WPS or another approved channel. MOHRE starts warnings on day 2, can suspend new work permits from day 5, and fines repeat late payers from day 11. A company passes only if it pays at least 85% of total wages due. The resolution sets a due date, not a fixed pay day: Clyde & Co notes that payment on or before the due date is what counts, and Morgan Lewis reads early payment the same way, so a payroll run on the 25th should be compliant.
Do Emiratisation targets apply if I hire through an EOR?
They apply to the establishment registered with MOHRE, which is the EOR, not your company. Mainland companies with 50 or more staff must add 2% Emiratis in skilled roles each year, split into 1% by 30 June and 1% by 31 December in 2026, and selected companies with 20 to 49 staff in 14 sectors have fixed hiring quotas. Missing the target costs AED 10,000 a month, or AED 120,000 a year, per missing Emirati. Free zone companies are outside the quotas.
Do unlimited contracts still exist in the UAE?
No. Since 2 February 2022 every private sector contract under Federal Decree-Law 33 of 2021 is fixed term, and existing unlimited contracts had to be converted. Decree-Law 14 of 2022 removed the original three-year cap, so a contract can run for any agreed period and renews by agreement. If both sides keep working after expiry with no new contract, it is treated as extended on the same terms. The contract must be in Arabic, with an English version allowed beside it.
Do DIFC and ADGM follow the federal labour law?
No. The Dubai International Financial Centre and Abu Dhabi Global Market have their own employment laws, courts and leave rules. The biggest money difference is gratuity: since 1 February 2020 DIFC employers pay monthly DEWS contributions of 5.83% of basic wage, rising to 8.33% after five years, instead of a lump sum at exit. Other free zones such as DMCC and JAFZA apply the federal law, with zone rules on visas and payroll.
How long can a former employee bring a claim?
Two years from the end of employment. Federal Decree-Law 9 of 2024 bars claims filed after that, and lets MOHRE issue a binding decision on claims up to AED 50,000 without going to court. Final dues must be paid within 14 days of the contract ending under Article 53, and WPS records are usually the employer’s main proof of payment. Keep payroll and leave records for at least two years after each exit.
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