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UAE · Hiring guide

UAE Hiring guide

No income tax + foreigners pay no social security = among the world’s lowest labor tax burden; costs are mainly work visas/quotas (MOHRE), accruing end-of-service gratuity, and WPS e-payroll. You’re hiring global migrant talent.

Verified 2026-06 · source Ministry of Human Resources & Emiratisation (MOHRE) · GPSSA · next review 2026-09
Employer overhead
~+0%
no monthly social or income tax for expats; cost is the visa/quota and accruing gratuity
Lowest tax wedge
gated by the visa
expats pay no social or income tax, but need a visa + Emiratisation quota
Min wage
No minimum for expats; Emiratis AED 6,000/mo
STEP 1

What it costs

what one hire really costs
Edit to recompute
Gross monthlyAED 10,000
Employer statutory+AED 0
Employer total/moAED 10,000
Take-homeAED 10,000
Annualized costAED 120,000
Worth knowing

Expats pay no social security and no income tax — one of the world’s lowest tax wedges. The real cost is the work visa/quota (MOHRE), accruing end-of-service gratuity and WPS payroll, not social security.

STEP 2

How hard

can you get in and out?
Hiring: global talent, quota-gated
  • attracts global migrant talent
  • expats need a work visa + Emiratisation quota
  • WPS electronic payroll required
Firing: relatively flexible
  • notice (or pay-in-lieu) + settle gratuity
  • gratuity 21 days/yr (first 5y), 30 after, capped at 2 years
  • since 2022 resignation no longer cuts gratuity
Lawful grounds (one required)
  • A valid reason (performance/discipline) or redundancy; shorter notice during probation.
  • Gross misconduct listed in Art 44 allows summary dismissal (no pay in lieu).
  • Note: the 2022 law removed the indefinite/fixed-term distinction, unifying into fixed-term, with converging dismissal rules.
Dismissal process
  • 1.Advance written notice 30–90 days (or pay in lieu).
  • 2.Settle gratuity + unused annual leave + final month’s wage.
  • 3.Cancel the work permit and residence visa (or the employee can’t leave/transfer and the employer may be fined).
  • 4.Complete final settlement via WPS.
Severance

Foreigner gratuity = 21 days’ basic wage/year (first 5 years) + 30 days’ basic wage/year (after 5 years), capped at 2 years’ pay. On basic wage (excl. allowances); none under 1 year.

Example: Total wage AED 10,000 (basic ~6,000), 4 years: 21 days/year × 4 ≈ 84 days ≈ 2.8 months’ basic wage ≈ AED 16,800 (on basic, not total package).

Country-specific pitfalls
  • Gratuity is on "basic wage", excluding housing/transport allowances — so it’s lower than employees expect; the basic-wage share in the contract is key.
  • Not cancelling the visa = the employee is "stuck", unable to transfer/leave, and the employer faces fines and labor complaints.
  • Emiratisation quotas: firms with 50+ employees must hire a proportion of nationals, or face fines.

Source: UAE Labour Law (Federal Decree-Law 33/2021), Art 43–44, 51

Supporting detail

STEP 3

How to start

first steps
STEP 4

What bites you

what others got wrong
Country-specific pitfalls
  • Gratuity is on "basic wage", excluding housing/transport allowances — so it’s lower than employees expect; the basic-wage share in the contract is key.
  • Not cancelling the visa = the employee is "stuck", unable to transfer/leave, and the employer faces fines and labor complaints.
  • Emiratisation quotas: firms with 50+ employees must hire a proportion of nationals, or face fines.

FAQ

What’s the all-in employer cost of one hire in UAE?

For a local employee on AED 10,000/month, employer monthly cost is about AED 10,000 (overhead +0%), ~AED 120,000 annualized. Use the calculator for your actual wage.

How are employer social contributions paid in UAE?

GPSSA (nationals) 15%/11% (cap 25k); expats none → gratuity

Is hiring foreigners expensive in the UAE?

Tax burden is very low: no income tax, foreigners pay no social security, so employer monthly cost ≈ wage. But there are hidden costs: work visa/residence processing and renewals, WPS compliance, annually-accruing gratuity (21/30 days’ basic wage per year), and Emiratisation quotas.

How is gratuity calculated in the UAE?

Foreigner gratuity = 21 days’ basic wage/year (first 5 years) + 30 days/year (after 5), capped at 2 years’ pay, on basic wage (excl. allowances).

Deeply researched and verified against official bodies, auto-updated; rates and processes are for reference — for major decisions rely on each country’s authorities and local counsel.