Hire Employees in United Arab Emirates: 2026 EOR, Payroll and Employment Guide

Mainland incorporation through the Department of Economic Development, or a free-zone licence in the DIFC, DMCC, JAFZA or one of forty others. Both take two to six weeks and both carry the same GPSSA obligation — free zones are not outside it.

The licence determines visa quota, which determines how many people you can employ.

EOR to hire without a licence or before one is issued. Entity once a licence is needed to trade or to hold a visa quota.

Contractors require a freelance permit; without one, an individual cannot lawfully work in the UAE. There is no equivalent of an unregistered independent contractor.

The system runs on two tracks and they are not variations of each other.

Expatriates — over 85% of the private-sector workforce — attract no social contribution. The only accruing cost is end-of-service gratuity: 21 days of basic pay per year of service for the first five years, then 30 days, capped at 24 months of pay overall and payable within 14 days of exit.

Note that gratuity accrues on basic pay, not gross. A package split 60/40 between basic and allowances produces a materially smaller accrual than one that is mostly basic — which is why very low basic salaries are common and why they are challenged on exit.

UAE nationals fall under GPSSA. Which regime applies depends on when the employee first registered, not when they joined you: 15% employer under Federal Decree-Law 57 of 2023 for first-time entrants from 31 October 2023, or 12.5% under the 1999 law for earlier registrants. A government subsidy of 2.5% applies where the contribution salary is below AED 20,000.

The private-sector contribution salary runs from AED 3,000 to AED 70,000 a month under the 2023 decree. The AED 50,000 figure still widely quoted is not wrong so much as out of date — it was the cap under the 1999 law, which the new decree raised. Government-sector employees cap at AED 100,000.

Four representative expatriate profiles. Salaries are illustrative market midpoints, not GX operating data. The percentage looks very low because the only accruing cost is gratuity, calculated on basic pay rather than gross — these assume basic is about 60% of package. Mandatory medical insurance and visa costs sit on top and are not percentages. A UAE national at the same salary costs 15%. For real market data, ask for a costing.

The Wages Protection System is not optional. Salaries must be transferred through approved channels and reported to the Ministry of Human Resources and Emiratisation. Non-compliance blocks new work permits, which in practice halts hiring.

There is no personal income tax and no employee social deduction for expatriates, so gross and net are nearly identical — a point worth making explicitly to candidates comparing offers across markets.

There is no personal income tax. An expatriate’s gross and net are identical, which makes UAE offers look larger than European ones at the same headline number — worth making explicit to candidates comparing markets.

Corporate tax is 9% above AED 375,000 of taxable profit and VAT is 5%. Neither touches payroll.

Since the 2021 reform all private-sector contracts must be fixed-term, renewable without limit. Unlimited contracts were abolished and existing ones had to be converted.

Probation may not exceed six months. An employer terminating during probation gives 14 days’ notice; an employee leaving to join another UAE employer gives one month, and the new employer compensates the former one for recruitment costs.

Eight hours a day and 48 a week is the statutory maximum, reduced by two hours a day during Ramadan for all employees, not only those fasting.

Overtime is paid at 125% of basic, rising to 150% for work between 10pm and 4am. Work on a rest day attracts a replacement day or 150% of basic.

Thirty calendar days of paid annual leave after one year of service, and two days per month between six and twelve months. Leave is calculated on full pay including allowances.

Unused leave is paid out on termination at basic salary, and employees may carry over up to half their entitlement by agreement.

Public holidays are announced annually by cabinet resolution and follow the Islamic calendar for several of them, so dates move each year. Recent years have carried 13 to 14 days.

Eid holidays in particular are confirmed only days in advance, which affects operational planning more than the number of days does.

Maternity: 60 days — 45 at full pay and 15 at half pay — with additional unpaid leave available for illness related to the pregnancy.

Parental leave: five working days for either parent within six months of the birth, a provision introduced in the 2021 reform and still unusual in the region.

Sick leave: up to 90 days per year after probation — the first 15 at full pay, the next 30 at half pay, and the balance unpaid.

Either party may terminate with 30 to 90 days’ notice as agreed in the contract, and the employee must continue working during it unless paid in lieu. Arbitrary dismissal exposes the employer to compensation of up to three months’ pay.

End-of-service gratuity is payable on any termination after one year of service, including resignation, and must be paid within 14 days of the last working day. It is calculated on final basic salary.

The employer must also cancel the residence visa and fund repatriation, which are practical costs beyond the gratuity itself.

Every non-national needs an employment visa and Emirates ID sponsored by the employer, and cannot lawfully work before it is issued. Standard processing runs two to four weeks; free zones are often faster.

Golden Visas offer five or ten-year residence without an employer sponsor for qualifying professionals, investors and specialists.

The recurring exposures are assuming free zones sit outside GPSSA, getting the Emiratisation quota wrong, failing to route pay through the Wages Protection System, and structuring a package with an artificially low basic salary.

That last one is the most common. Gratuity accrues on basic only, so a low basic reduces the accrual — and is routinely challenged on exit, with the tribunal reconstructing what basic should have been.

The employment visa and Emirates ID must be issued before the employee starts work. Working on a visit visa is unlawful and penalised against the employer.

Confirm before the offer: the basic-to-allowance split, since it drives gratuity; whether medical insurance is arranged, as it is mandatory in every emirate; and that the contract is fixed-term, since all UAE private-sector contracts must be.