UAE
Know everything about hiring and compliance in UAE.
The standard Salary Compensation is designed to attract, motivate, and retain employees in both the public and private sectors.
Basic Salary: The core of an employee's income, often determined by the role, industry, and individual qualifications.
Housing Allowance: A common part of the salary package in the UAE, given the high cost of living and housing.
Transportation Allowance: Provided to cover the cost of commuting to and from work.
Minimum wage requirements
There is no minimum wage in the UAE. The minimum wage for a High School Graduate is AED 4000 while the minimum wage for a university graduate is AED 5000.
Working hours
Companies, especially private Enterprises usually work 48 hours a week.
Employee Benefits
In Dubai, certain benefits are mandatory for all employees, including health insurance and gratuity payments.
- Public Health Insurance
- Private Health Insurance (ADNIC)
- Workman’s Compensation Insurance
- Unemployment Insurance
- General Pension and Social Security Authority
To read more about these benefits, download the UAE Hiring Guide.
Overtime
Non-managerial positions are entitled to overtime payment for hours worked outside of the standard work hours. Employees are limited to a maximum of 2 hours of overtime per day or 144 hours over 3 weeks.
During Ramadan, employers are required to reduce work hours by at least 2 hours
The overtime pay rates are as follows:
Bonus
Legally, employees are not entitled to receive bonuses. However, employers can choose to give voluntary bonuses, which will be taxed as part of the employee's salary.
In UAE, employers usually handle payroll on a monthly basis, and many companies adhere to the following schedule:
Payroll cut-off date: 20th of each month
Payment date: Last day of each month
Tax
Employees in UAE are not subject to income tax. However, some employees may be required to make social security (pension) contributions.
5% of the employee’s salary goes into Social security. This is matched by the employer at 12.5% and the government at 2.5%. This is payable either after 20 years of service or 50 years of age.
A contract in the UAE must contain essential details, including the employee's name, start date, employment duration, job description, and termination conditions.
Onboarding
Employees on fixed-term contracts should not exceed a duration of three years, with the possibility of extension for an additional three years. Backdating of contracts is strictly prohibited, and the maximum probationary period for new employees is limited to six months.
Probation
In UAE, the probation period is usually of 3 months which can be extended to 6 months.
Background Check
Employees go through a thorough background check in UAE. Most professional and personal records are digitized and can be accessed after employee’s consent. Sometimes, accessing certain types of information can be challenging due to local privacy laws or lack of digitized records. For expatriate candidates, verifying foreign qualifications or experiences might require more effort and international coordination. Therefore, many companies in the UAE rely on professional background check services to conduct thorough and legally compliant checks.
Paid leave: Employees who have worked for at least 6 months, are entitled to 2 days of paid leave per month and maximum 30 paid leaves per year.
Maternity Leave: Employees are entitled to 60 days of paid leave during maternity. The first 45 days are fully compensated while in the last 15 days, employees receive 50% of the salary.
Paternity Leave: There is no paternity leave mandated by the law.
Sick Leave: An employee who has worked for at least 3 months, is entitled to a maximum of 90 days of sick leave. First 15 days of sick leave are fully paid, the next 15 days are partially paid and the remaining are considered leave without pay.
List of Holidays 2024
Termination
Under Article 42 of the Federal Decree Law No. 33 of 2021, which governs Labour Relations in the Private Sector in the UAE, there are several circumstances in which an employment contract can be terminated.
You can read more about these circumstances in our hiring guide.
Severance Pay
In the UAE, employees who are terminated, except under Article 120 of the Labor Law, are entitled to receive severance pay. The severance pay is calculated as follows:
21 working days of salary for each of the first 5 years of service and an additional 30 working days per year of service beyond five years, with a maximum of 2 years' worth of compensation.
Notice Period
The notice period for termination ranges from a minimum of one month to a maximum of three months, depending on mutual agreement between the employee and the employer. Contracts must be in English, although bilingual contracts are also acceptable. They must be in written form and signed by both parties.
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Frequently asked questions
What is the maternity leave policy in Dubai?
Employees are entitled to 60 days of paid leave. The employee will receive 100% of the salary for the first 45 days and 50% of the salary for the last 15 days, and the employer will be responsible for this pay.
Do male employees have the right to paternity leave in Dubai?
There is no paternity leave currently required by law.
How many sick leave days are employees entitled to in Dubai?
Employees are entitled to sick leave for up to 90 days. To be eligible for sick leave employees must have worked at least three months for the employer following the end of their probation period. This leave is paid by the employer at the following rates: - 0 to 15 days: 100% of base salary by employer - 16 to 45 days: 50% of base salary by employer - 46 to 90 days: 0%
What are the public holidays observed in Dubai?
The UAE celebrates 7 national holidays for a total of 14 days. National public holidays include: • Eid al-Fitr Holiday (5 days) • Eid al-Adha (3 days) • Prophet Muhammad's Birthday • National Day (2 days) • Arafat Day • Islamic New Year • Commemoration Day
What are the legal requirements for terminating an employee in Dubai?
Employers can unilaterally terminate contracts at any time as long as proper legal notice requirements and compensation are followed. Terminations without notice must be for cause. Compliant terminations include: - Voluntarily by the employee - By mutual agreément - Unilaterally by the employer: - Without cause providing notice and required compensation - For cause without notice - Probation period - Objective grounds - Disciplinary dismissal -Performance due to unsuitability for the job - By the expiration of the contract
Can employers have a probation period for new hires in Dubai?
The maximum probation period is six months.
