Country Overview
The United Arab Emirates (UAE) is a high-income federation of seven emirates on the Arabian Peninsula, offering a tax-free income environment, modern infrastructure, and a strategic location between Europe, Asia and Africa. Abu Dhabi is the capital, while Dubai is the country’s global business, finance, tourism and logistics hub. Other major cities include Sharjah, Al Ain and Ajman.
The UAE has the second-largest economy in the Middle East, with GDP of around USD 545 billion in 2024. Although it is a major oil and gas producer, the non-oil sector now contributes over 70% of GDP, with hydrocarbons accounting for roughly 25–30%. The economy is highly diversified across trade, tourism, finance, real estate and logistics. Approximately 88.5% of the population are expatriates, making the UAE one of the most international workforces in the world. Arabic is the official language, but English is the lingua franca of business and daily life.
*This guide is intended for general informational purposes only and should not be viewed as legal or tax advice. The information discussed may change frequently, and Access Financial cannot guarantee that all content remains current at all times.
2026 Key Legislative Updates
Mandatory health insurance extended to all seven emirates from January 2025. A 15% Domestic Minimum Top-up Tax applies to large multinational groups (global revenues ≥ €750m) from January 2025. Federal Decree-Law No. 16 of 2025 introduced procedural VAT amendments from 1 January 2026. ILOE unemployment insurance is now mandatory for almost all private and federal employees.
Contracts
UAE employment contracts are governed by Federal Decree-Law No. 33 of 2021. All contracts must be registered with the Ministry of Human Resources and Emiratisation (MoHRE) on the mainland, or with the relevant free zone authority.
Contract Types
| Contract Type | Duration | Key Features |
|---|---|---|
| Limited (Fixed-Term) | Up to 3 years, renewable | Ends automatically at expiry date; standard format under 2021 labour law |
| Unlimited | Indefinite | Either party can terminate with 30–90 days’ notice as per contract |
| Part-Time | Indefinite or fixed | Pro-rata leave and statutory entitlements; multiple employers permitted |
| Freelance / Consultant | Project-based | Service agreement, not employment contract; self-employed handles own insurance |
Mainland vs. Free Zone
Mainland contracts fall under MoHRE jurisdiction. Free zone employees (DIFC, ADGM, DMCC, JAFZA, etc.) are subject to free-zone-specific employment regulations, which may differ in notice periods, gratuity calculation, and end-of-service benefits. DIFC and ADGM operate independent employment laws with English common-law principles.
What Your Contract Must Include
Mandatory Provisions
- Job title and description
- Start date and contract duration
- Basic salary and total wage (including allowances)
- Working hours and place of work
- Annual leave entitlement
- Notice period (both parties)
- Probation period (if any)
- End-of-Service Gratuity terms
Common Additional Clauses
- Confidentiality / NDA provisions
- Intellectual property assignment
- Non-compete clause (max 2 years, defined scope)
- Housing and transport allowances
- Annual flight ticket (home country)
- Bonus and commission structure
- Health insurance terms
Access Financial drafts UAE-compliant employment contracts and manages onboarding for EOR engagements.
Working Hours & Overtime
The standard UAE working week is 48 hours (8 hours/day, 6 days/week). Many private-sector employers operate on a 5-day Monday–Friday or Sunday–Thursday schedule. During Ramadan, working hours are reduced by 2 hours per day for Muslim employees (and often voluntarily for all staff).
| Parameter | Rule | Notes |
|---|---|---|
| Standard working week | 48 hrs / week | 8 hours/day; may be split across 5 or 6 days |
| Ramadan hours | Reduced by 2 hrs/day | For Muslim employees; often extended to all staff voluntarily |
| Break time | 1 hour after 5 hrs work | Mandatory; not counted as working time |
| Daytime overtime | 125% of basic hourly rate | Up to 2 extra hours/day; beyond requires special permission |
| Night overtime (10 PM–4 AM) | 150% of basic hourly rate | Applies during night hours |
| Rest day work | 150% of pay + day off in lieu | Or 150% with no substitute day (if not possible) |
| Public holiday work | 200% of normal pay | No additional day off required |
Federal Decree-Law 33/2021
The UAE labour law applies equally to nationals and expatriates in the private sector. Overtime must be voluntary and is calculated on basic wage, not total wage. Commuting time is not counted as working hours.
Probation Period
A probation period of up to 6 months may be included in the employment contract. During probation, either party may terminate with reduced notice, and sick leave is generally unpaid unless agreed otherwise.
| Parameter | Standard practice | Legal notes |
|---|---|---|
| Maximum duration | 6 months | Statutory cap; cannot be extended |
| Employer notice (during probation) | 14 days | Federal Decree-Law 33/2021 |
| Employee notice (changing job in UAE) | 30 days | Employee compensates new/old employer for recruitment costs |
| Employee notice (leaving UAE) | 14 days | Returning to home country |
| Sick leave during probation | Unpaid | Unless employer voluntarily grants paid sick leave |
Immigration & Work Visas
All non-UAE and non-GCC nationals require a residence visa and work permit to live and work in the UAE. Employers (mainland or free zone) typically sponsor the entire process.
Emirates ID & Digital Residency — 2026
All UAE residents must hold an Emirates ID, issued by the Federal Authority for Identity, Citizenship, Customs & Port Security (ICP). Visa records are now fully digital and verifiable through the UAEPASS app and ICP online services.
Main Visa Routes
| Visa Route | Min. Salary | Sponsor? | Duration |
|---|---|---|---|
| Standard Employment Visa | No federal minimum | UAE employer | 2 or 3 years; renewable |
| Green Visa (Skilled Self-Sponsored) | AED 15,000/month (basic) | Self-sponsored | 5 years; renewable |
| Freelancer Green Visa | AED 360,000/year | Self-sponsored | 5 years; renewable |
| Golden Visa — Investor | ~AED 2M investment | Self-sponsored | 10 years; renewable |
| Golden Visa — Specialised Talent | Varies by category | Endorsing body | 5 or 10 years |
| Free Zone Freelance Permit | No fixed minimum | Free zone authority | 1–3 years |
Typical Costs
| Fee | Cost (AED) | Notes |
|---|---|---|
| Employment entry permit | ~1,000–2,000 | Varies by skill category and emirate |
| Medical fitness test | ~250–700 | Mandatory at approved clinic |
| Emirates ID (3 years) | ~370 | Plus typing centre and service fees |
| Residency visa stamping | ~500–700 | Per applicant |
| Freelance permit (annual) | ~7,000–15,000 | Includes visa, varies by free zone |
AF’s immigration team has relocated thousands of contractors and professionals to the UAE. We handle entry permits, Emirates ID, medical and visa stamping end-to-end.
Leave Entitlements
UAE statutory leave is set by Federal Decree-Law 33/2021 and applies equally to nationals and expatriates in the private sector. Most professional employers offer enhanced benefits above the statutory floor.
Annual Leave
| Parameter | Entitlement | Notes |
|---|---|---|
| After 6 months’ service | 2 days per month | Pro-rata in first year |
| After 1 year’s service | 30 calendar days/year | Statutory minimum |
| Carry-over | Up to 50% | With employer consent |
| Pay during leave | Full salary | Including housing/transport allowances |
| Public holidays during leave | Added to leave | Not counted against annual leave |
Parental Leave
| Leave type | Duration | Pay | Notes |
|---|---|---|---|
| Maternity | 60 days | 100% (45 days) + 50% (15 days) | Plus up to 45 unpaid days if illness |
| Maternity extension (sick baby) | +30 days paid | Full pay | With medical certificate |
| Paternity | 5 days | Full pay | Within 6 months of birth; consecutive or split |
| Hajj leave | Up to 30 days | Unpaid | Once in lifetime; Muslim employees |
Sick Leave
| Period | Pay rate |
|---|---|
| First 15 days | Full pay |
| Next 30 days | Half pay |
| Remaining 45 days | Unpaid |
| Total per 12-month period | Up to 90 days |
Public Holidays 2026
The UAE observes approximately 12 paid public holidays in 2026. Islamic holidays follow the Hijri calendar and are confirmed by official moon sighting. Cabinet Resolution No. 27 of 2024 allows non-Eid holidays to be moved to adjacent weekdays to create long weekends.
| Date | Day | Holiday |
|---|---|---|
| 1 January | Thursday | New Year’s Day |
| 20–22 March | Friday–Sunday | Eid Al Fitr (3 days) |
| 26 May | Tuesday | Arafat Day |
| 27–29 May | Wednesday–Friday | Eid Al Adha (3 days) |
| 15 / 16 June | Monday / Tuesday | Islamic New Year |
| 24 / 25 August | Monday / Tuesday | Prophet Muhammad’s Birthday (PBUH) |
| 1 December | Tuesday | Commemoration Day |
| 2–3 December | Wednesday–Thursday | UAE National Day (Eid Al Etihad) |
Notice Periods
Under UAE law, both employer and employee must provide written notice to terminate the employment contract. The notice period is agreed in the contract and ranges from 30 to 90 days.
| Scenario | Notice period | Notes |
|---|---|---|
| Standard contract (mainland) | 30–90 days | As agreed in contract; if unspecified, 30 days applies |
| During probation (employer) | 14 days | Federal Decree-Law 33/2021 |
| During probation (employee, leaving UAE) | 14 days | Returning home country |
| During probation (employee, changing jobs) | 30 days | Plus recruitment-cost compensation |
| Pay in lieu of notice | Allowed | Equal to last basic wage for the notice period |
| Job-search leave | 1 day/week | When employer initiates termination |
Termination & End-of-Service Gratuity
The UAE does not operate a public pension scheme for expatriates. Instead, employees receive a lump-sum End-of-Service Gratuity after completing one year of continuous service, calculated on the last basic salary.
| Years of service | Gratuity entitlement | Notes |
|---|---|---|
| Less than 1 year | None | No gratuity |
| 1–5 years | 21 days’ basic salary per year | Pro-rata for partial years |
| 5+ years | 30 days’ basic salary per year | For each year beyond 5 |
| Maximum total | 2 years’ total basic salary | |
Immediate Termination (Article 44)
Employers may terminate without notice in cases of gross misconduct, fraud, serious safety violations, or criminal conviction. In such cases the employee may forfeit gratuity. Unlawful dismissals can be contested through MoHRE complaint channels.
Income Tax & VAT
The UAE imposes no personal income tax on salaries, bank interest or other employment income for residents. There are no individual tax filings. This is one of the most significant financial advantages of working in the UAE.
Corporate Tax
| Tax | Rate | Threshold / Notes |
|---|---|---|
| Corporate Tax | 0% | Profits up to AED 375,000 |
| Corporate Tax | 9% | Profits above AED 375,000 (since June 2023) |
| Domestic Minimum Top-up Tax (DMTT) | 15% | Large MNEs with global revenue ≥ €750m (from 1 Jan 2025) |
| Free zone qualifying income | 0% | If compliance conditions met |
| Withholding tax | 0% | On salaries, interest and royalties |
Take-home Pay — Tax-free Salaries
UAE residents retain approximately 95% of their gross salary, with no income tax and minimal statutory deductions (only ILOE for expatriates). Compare to UK, where higher-rate earners may retain only 55–60%.
VAT
| Rate | % | Applies to |
|---|---|---|
| Standard | 5% | Most goods and services |
| Zero-rated | 0% | Exports, international transport, certain healthcare and education |
| Exempt | — | Residential rent, certain financial services, local passenger transport |
| Registration threshold | AED 375,000 | Mandatory; AED 187,500 voluntary |
Let Access Financial handle your UAE payroll, WPS compliance and gratuity calculations — seamlessly and compliantly.
Benefits
UAE statutory benefits are modest by global standards, but the tax-free income environment and generous market-standard packages mean total remuneration is highly competitive. Most professional employers offer extensive supplemental benefits.
Mandatory Statutory Benefits
| Benefit | Entitlement | Notes |
|---|---|---|
| Health insurance | Employer-paid | Basic package from AED 320/year; mandatory in all 7 emirates |
| Annual leave | 30 calendar days/year | After 1 year service |
| Sick leave | Up to 90 days/year | 15 full pay + 30 half pay + 45 unpaid |
| Maternity leave | 60 days | 45 days full pay + 15 days half pay |
| Paternity leave | 5 days | Full pay; within 6 months of birth |
| End-of-Service Gratuity | Up to 2 years’ basic salary | After 1+ year service |
| ILOE unemployment cover | 60% basic salary, 3 months | Employee-paid premium |
Market-Standard Supplemental Benefits
| Benefit | Prevalence | Typical provision |
|---|---|---|
| Housing allowance | Very common | 25–40% of basic salary; or company-leased property |
| Transport allowance | Very common | AED 1,000–3,000/month; or company car |
| Annual flight ticket | Common (professional roles) | Economy return to home country; often family included |
| Enhanced health insurance | 90%+ professional employers | Daman, AXA, Bupa, MetLife; family cover for senior roles |
| Education allowance | Common (senior expat roles) | AED 30,000–80,000/year per child |
| End-of-year bonus | Common | 1 month’s salary; performance-linked |
| Remote / flexible working | Increasingly common | Hybrid 2–3 days; varies by sector |
Pension & End-of-Service Savings
The UAE does not provide a state pension for expatriates. End-of-Service Gratuity is the primary retirement-style benefit, although new voluntary savings schemes are emerging.
| Parameter | Detail | Notes |
|---|---|---|
| State pension (Emiratis) | GPSSA scheme | 20–26% total contribution; retirement age 60 |
| State pension (expatriates) | None | Replaced by End-of-Service Gratuity |
| End-of-Service Gratuity (1–5 yrs) | 21 days’ basic salary/year | Pro-rata calculation |
| End-of-Service Gratuity (5+ yrs) | 30 days’ basic salary/year | Capped at 2 years’ total salary |
| DIFC Employee Workplace Savings (DEWS) | 5.83% / 8.33% | Mandatory in DIFC; replaces traditional gratuity |
| Voluntary Savings Scheme | Optional, from 2023 | MoHRE-approved providers; alternative to gratuity |
Insurances
Mandatory and recommended insurances for employers, employees and contractors in the UAE.
| Insurance | Min. Cover | Required by |
|---|---|---|
| Health Insurance | Basic plan (from AED 320/yr) | Mandatory in all 7 emirates (since Jan 2025) |
| Workmen’s Compensation | As per role | Required for all employers; covers work injuries |
| ILOE Unemployment Insurance | 60% of basic salary, 3 months | Mandatory for most employees (Federal Decree-Law 13/2022) |
| Motor Insurance | Third party | UAE Federal Traffic Law |
Professional Indemnity Insurance — Contractors
Often contractually required by end-clients and increasingly mandated by regulation. Minimum AED 1 million for notaries, court experts and translators (2024 laws). Engineering, consulting and financial-services roles typically require AED 2M+. AF can advise on appropriate cover for your sector.
Private Health Insurance Providers
| Provider | Typical annual cost (individual) | Type |
|---|---|---|
| Daman (National Health Insurance) | AED 800–6,000 | Basic to comprehensive |
| AXA Gulf | AED 2,500–8,000 | Comprehensive; regional cover |
| Bupa Global | AED 5,000–15,000 | International coverage |
| MetLife | AED 2,000–7,000 | Comprehensive |
AF Solutions
Access Financial has operated in the UAE for over 22 years, supporting end-clients, recruitment agencies, and employees.
For End-Clients
Managing a contingent workforce can be complex. Our solutions streamline workforce management, making it simple, compliant and cost-effective.
For Recruiters
We offer a complete suite of services, allowing you to simply, compliantly and efficiently place your candidates in the UAE, with minimum fuss.
For Contractors
Focus on what you do best and let us take care of your payroll, gratuity, health insurance and immigration needs.
Free Consultation
FAQ
Find answers to our most frequently asked questions below.
What solutions do you offer in the UAE?
In the UAE, Access Financial provides one compliant engagement model:
Employed/EOR (umbrella): We become the legal employer of your employees in the UAE. Your business retains full control of the day-to-day work and deliverables, while we carry the employment, payroll, and tax liability.
When should a company consider using an EOR?
An EOR is especially useful in a range of scenarios. It is the most efficient route when you want to convert existing contractors into compliant employees and reduce misclassification risk, or when you need to hire talent in a country where you do not have a local entity. It also allows you to onboard quickly without going through a lengthy and complex company registration process, while ensuring full compliance with local employment law, payroll, and tax regulations. Beyond these core use cases, an EOR is equally valuable when you are testing a new market before committing to a long-term investment, or when you simply need temporary or project-based hires abroad.
Can we hire both local nationals and foreign employees through an EOR?
Yes. Our EOR services cover both local nationals and foreign hires. For foreign nationals, additional visa or work permit requirements apply, and we can support the application process end-to-end — including sponsorship in jurisdictions where we hold the relevant licence.
Is permanent establishment (PE) risk avoided?
An EOR is a third-party business that legally employs international workers on your behalf, creating a clear layer of separation between your company and the staff based in other countries. The EOR becomes the legal employer for those workers, so although the employees continue to deliver services to your business, the legal distancing helps mitigate many common PE risks. That said, PE is determined by the facts on the ground (the nature of the activity, contract-signing authority, where revenue is generated, and so on), not solely by who issues the payslip. We therefore recommend reviewing each engagement with our specialists to confirm the appropriate structure.
What is your pricing model?
Our standard management fee is 5% of the contract value, with a minimum of €550. We also offer volume discounts on bulk engagements. To discuss pricing for your specific scenario, please get in touch with our team here: https://accessfinancial.com/#get-started.
Social Insurance
The UAE operates separate social security regimes for nationals and expatriates. UAE and GCC nationals contribute to the General Pension and Social Security Authority (GPSSA); expatriates do not contribute to a state pension and instead receive End-of-Service Gratuity.
ILOE Unemployment Insurance — Mandatory
All eligible private-sector and federal-government employees must subscribe to the Involuntary Loss of Employment (ILOE) scheme. Premium: AED 5/month (basic salary ≤ AED 16,000) or AED 10/month (above AED 16,000). Pays up to 60% of basic salary for 3 months if made redundant. Non-compliance incurs an AED 400 fine.
UAE / GCC Nationals — GPSSA Contributions
Expatriates