Hire employees in the United Arab Emirates
Everything a foreign company needs to know before employing people in the UAE: whether you need a mainland or free zone entity, what an employee really costs when there is no income tax but there is gratuity, visas and health insurance, how the Wages Protection System works, what leave is mandatory, and how notice and dismissal work. Written for CHROs, CFOs, General Counsel and founders.
Quick answers
The questions leadership teams ask first, answered directly. Detail follows further down the page.
Do I need a local UAE entity to hire?
No. Foreign companies can employ people in Dubai, Abu Dhabi and the Northern Emirates through three routes:
- Employer of Record (EOR). Dryft Global is the legally registered employer. We sponsor the employment residence visa, issue the bilingual contract through the Ministry of Human Resources and Emiratisation (MOHRE) or the relevant free zone, pay salary through the Wages Protection System (WPS), arrange mandatory health insurance and provide for end-of-service gratuity. You direct the day to day work.
- Direct entity: mainland LLC or free zone company. A mainland LLC can trade anywhere in the UAE but carries Emiratisation quotas and strict WPS monitoring. A free zone company (DMCC, JAFZA, DAFZA, TECOM) or a financial free zone entity (DIFC or ADGM, both common-law jurisdictions) offers 100% foreign ownership and quota exemption, but limited onshore trading.
- Licensed freelancer. Lawful only for self-employed professionals holding a MOHRE or free zone freelance permit and their own residence visa. See the contractor section.
When should I use an EOR instead of setting up an LLC?
An EOR makes commercial sense when you are:
- Getting people onboarded and visaed in 2 to 3 weeks rather than the 6 to 10 weeks a mainland licence, bank account and immigration file take.
- Deploying sales, technical or client success teams without an office lease or corporate capital.
- Testing the UAE and wider MENA market before choosing a long-term structure, and staying clear of Emiratisation quotas, WPS bank integration and corporate tax registration until headcount justifies it.
A direct entity becomes the right answer when onshore headcount reaches 10 to 20+, when you need to contract with government bodies or trade onshore, when you run regulated financial services that belong in DIFC or ADGM, or when you need bonded customs infrastructure such as JAFZA.
What does an employee actually cost beyond salary?
Plan for roughly 8.5% to 15%+ on top of base compensation for expatriate staff. There is no income tax and no social security for expatriates, so the cost sits in four places: end-of-service gratuity (21 days of basic pay per year for the first five years, 30 days after, or 5.83% to 8.33% monthly into a savings scheme), mandatory health insurance, visa and Emirates ID fees amortised over 2 years, and the small ILOE premium. UAE nationals cost more: GPSSA pension contributions of 12.5% to 15%+. Full breakdown below.
How difficult is termination in the UAE?
More procedural than difficult. All mainland contracts are fixed-term, and either side can end one for a legitimate reason with 30 to 90 days' written notice as set in the contract, or pay in lieu. On exit you settle notice, accrued leave, gratuity and a repatriation ticket. Dismissal without notice is only allowed on the exhaustive Article 44 grounds after a written investigation. Dismissing someone for filing a complaint is arbitrary dismissal and costs up to 3 months' total salary on top.
Can Dryft Global legally employ my team in the United Arab Emirates?
Yes. Dryft Global provides Employer of Record and visa sponsorship across Dubai, Abu Dhabi and the commercial free zones. We handle the bilingual employment agreement, entry permit and residence visa, medical screening, Emirates ID, WPS payroll, mandatory health insurance, ILOE enrolment and gratuity administration, while you direct the work.
Hiring routes compared
Free zone and DIFC/ADGM entities sit between the first two columns: quota exempt, but with their own licensing and visa processes.
| Factor | Direct mainland LLC (MOHRE) | Dryft Global EOR | Freelance / Green Visa contractor |
|---|---|---|---|
| Speed to onboard | 6 to 10 weeks (licence, bank, immigration file) | 2 to 4 business days; visa in 2 to 3 weeks | 1 to 2 weeks, if a valid permit exists |
| Corporate presence required | Yes, DET or ADDED commercial licence | No, employed through Dryft's UAE infrastructure | No, direct B2B agreement |
| Emiratisation (Nafis) exposure | High: quotas at 20+ and 50+ employees | Managed by the EOR | None |
| WPS compliance | Mandatory, monitored by CBUAE and MOHRE | Fully managed by Dryft | None, invoiced commercially |
| End-of-service liability | Statutory gratuity accrual or savings scheme | Managed with accurate provisions | None |
| Visa sponsorship | Your own quota and establishment card | Sponsored by Dryft | Self-sponsored |
| Best fit | 10 to 20+ staff, onshore trading, government contracts | Sales, technical and regional teams of 1 to 20 | Genuinely independent specialists |
What an employee costs in the United Arab Emirates
For expatriates there are no payroll taxes and no social security contributions. The on-cost is a deferred benefit (gratuity), an insurance mandate, government fees and a small unemployment premium. Gratuity, overtime and leave pay are calculated on basic salary only, which is why UAE packages put 60% to 70% of pay in basic and the rest in housing and transport allowances. Courts strike down artificial splits designed to depress gratuity.
| Component | Employer share | Notes |
|---|---|---|
| End-of-service gratuity or savings scheme | ~5.83% to 8.33% of basic salary | 21 days per year for years 1 to 5, 30 days after; capped at 2 years' basic pay |
| Mandatory group health insurance | AED 800 to 6,000+ per year | DHA in Dubai, DOH in Abu Dhabi (spouse and 3 children), MOHAP elsewhere |
| Visa, Emirates ID and work permit fees | ~AED 3,000 to 7,000 per year | Amortised over the 2-year visa |
| ILOE unemployment insurance | AED 60 to 120 per year | Legally the employee's premium; employers usually arrange it |
| Statutory subtotal (expatriate) | ~8.5% to 10% | Of base cash compensation, before market benefits |
| GPSSA pension (UAE nationals only) | 12.5% to 15%+ | Employee pays 5% to 11%; GCC nationals under home-country rules |
| Market-standard benefits | 5% to 15%+ | Annual flights, enhanced family medical, schooling allowance, bonus |
| Total employer on-cost | ~8.5% to 15%+ | Above base cash compensation, expatriate professional |
For an employee on AED 25,000 a month total (AED 300,000 a year), budget roughly AED 325,000 to 345,000 all-in before market extras such as flights and schooling. Ask us for a cost model built on your basic-to-allowance split and chosen medical tier.
Payroll and tax
Salaries are paid monthly in dirhams through the Wages Protection System, an electronic transfer scheme run by the Central Bank and MOHRE and adopted by several free zones. You upload a Salary Information File (SIF) through an approved bank; the system checks it against registered contract salaries. At least 90% of registered wages must land within 15 days of the due date and at least 80% of the workforce must be paid through WPS. Miss it and new work permits are blocked automatically and fines escalate. Payslips must separate basic salary from allowances.
Income tax
There is none. The UAE levies 0% personal income tax on salaries, so there is no withholding. The exposure sits with the company: corporate tax of 9% on profits above AED 375,000 (0% for a Qualifying Free Zone Person) and 5% VAT. If a UAE-based employee habitually negotiates or concludes contracts for a foreign parent, that parent risks a permanent establishment. An EOR keeps the contracting nexus offshore, provided the employee has no binding signing authority.
Minimum wage
Federal law sets no universal minimum wage for expatriates; MOHRE has historically tied minimum contract salaries to qualification tier. For UAE nationals, Nafis sets salary thresholds for wage subsidies and Emiratisation credit.
Leave and mandatory benefits
- Paid vacation. 30 calendar days a year after 1 year of service, accruing at 2 days a month between 6 and 12 months.
- Public holidays. 10 to 14 days a year, set federally: New Year, Eid Al Fitr, Arafah Day and Eid Al Adha, Islamic New Year, the Prophet's Birthday and National Day. Islamic dates depend on moon sighting. Holiday work earns a day in lieu plus 50% of basic, or pay plus 150%.
- Sick pay. Up to 90 calendar days a year after probation: the first 15 at full pay, the next 30 at half pay, the remaining 45 unpaid.
- Maternity. 60 calendar days: 45 at full pay and 15 at half pay, plus up to 45 further unpaid days for illness.
- Parental leave. 5 working days paid, for either parent, within 6 months of birth.
- Other leave. Bereavement of 5 days for a spouse and 3 for a close relative. One unpaid Hajj leave of up to 30 days per employment.
- Health insurance. Employer-funded private cover is mandatory in Dubai and Abu Dhabi (including spouse and up to 3 children) and rolling out across the Northern Emirates.
- ILOE. Everyone must be enrolled in the Involuntary Loss of Employment scheme: AED 5 or 10 a month depending on basic salary, paying 60% of basic for 3 months.
- Gratuity and repatriation. Gratuity after 1 year of service, and a flight home on final departure unless the employee resigns or moves to another local employer.
- Working time. 8 hours a day or 48 a week, reduced by 2 hours a day for everyone during Ramadan. Overtime is capped at 2 hours a day at basic plus 25%, or 50% at night or on rest days. Managers with real authority are exempt.
Termination and notice periods
Open-ended contracts no longer exist on the mainland; everything is fixed-term, typically 2 or 3 years to match the visa, renewable without limit. Under Articles 42 and 43 either party may terminate for a legitimate reason by written notice. Probation is capped at 6 months. Terminal settlement covers notice, unused leave, gratuity and the repatriation ticket.
| Situation | Statutory notice |
|---|---|
| Employer ends probation | 14 days' written notice |
| Employee resigns in probation to join another UAE employer | 30 days; new employer reimburses recruitment and visa costs |
| After probation, either party | 30 to 90 days as written in the contract, or pay in lieu |
| Summary dismissal (Article 44) | None, and no gratuity, but only on listed grounds after a written investigation |
- Article 44 is exhaustive. Forged credentials, serious material loss, breach of posted safety rules, non-performance after two written warnings, disclosure of trade secrets, assault or intoxication. Nothing else justifies dismissal without notice.
- Arbitrary dismissal. Terminating someone because they filed a complaint against you brings compensation of up to 3 months' total salary on top of every other entitlement.
- Gratuity math. 21 days of final basic salary per year for the first 5 years, 30 days for each year after, pro-rated for part years, capped at 2 years' basic pay. Allowances and commission are excluded.
- Redundancy. Valid ground, but requires written notice to MOHRE, full notice and full terminal benefits.
- Disputes. Mainland claims go to MOHRE conciliation first; MOHRE decides claims up to AED 50,000 itself and refers larger ones to the Labour Court. DIFC and ADGM have their own courts.
Can I use independent contractors?
Only if the person is a licensed freelancer with a MOHRE or free zone permit and a self-sponsored residence visa. Engaging anyone on a visit visa, or without a work permit, is illegal working: fines run from AED 100,000 to 1,000,000 per violation under Federal Decree-Law 9 of 2024, plus possible prosecution, closure and deportation. Even with a valid permit, courts look at subordination, economic dependence, exclusivity and control over hours. A contractor working fixed hours for one client under direct management is a disguised employee, and reclassification brings retroactive liability for leave, health insurance, WPS penalties and gratuity. Part-time and multi-employer work is lawful only through MOHRE part-time permits. An EOR is the compliant alternative for anyone who works like an employee.
The legal framework in brief
The UAE runs three parallel regimes: the federal mainland, more than 40 commercial free zones applying federal law with zone bylaws, and two financial free zones with their own common-law statutes and courts. Trade unions, collective bargaining and strikes are not permitted.
- Federal Decree-Law 33 of 2021 and Cabinet Resolution 1 of 2022. The mainland labor law: contracts, probation, leave, overtime, dismissal, anti-discrimination, remote work.
- DIFC Employment Law No. 2 of 2019 (as amended 2021). English-language contracts, the mandatory DEWS savings plan in place of gratuity, DIFC Courts.
- ADGM Employment Regulations 2019. Common-law framework for Abu Dhabi Global Market, adjudicated by ADGM Courts.
- Federal Decree-Laws 9 of 2024 and 47 of 2022. Illegal working penalties and MOHRE summary decisions; corporate tax.
- Federal Decree-Law 45 of 2021 (PDPL), DIFC Data Protection Law No. 5 of 2020, ADGM Data Protection Regulations 2021. Employee data needs a lawful basis; monitoring must be disclosed in signed policies; covert monitoring is a criminal offence.
- Emiratisation (Nafis). Mainland companies with 50+ skilled employees must raise Emirati headcount 2% a year toward 10%; targeted firms with 20 to 49 staff must hire 1, then 2, UAE nationals. Shortfalls cost AED 6,000 to 10,000+ per post per month, and fake Emiratisation is prosecuted. Free zones are exempt.
Where the talent is
The UAE is the commercial gateway between the Middle East, Africa, Europe and South Asia. Over 85% of the workforce is expatriate, drawn from more than 200 nationalities, and Gulf Standard Time (UTC+4) overlaps with Asia in the morning, Europe all day and the US East Coast in the afternoon. Mainland contracts are bilingual, Arabic prevailing; DIFC and ADGM contracts are in English.
| Region | Talent and industry concentration |
|---|---|
| Dubai (mainland, DMCC, TECOM) | Regional headquarters, fintech, B2B SaaS, e-commerce, digital marketing, logistics, real estate, tourism |
| DIFC | Investment banking, private equity, sovereign wealth, hedge funds, wealthtech, international commercial law |
| Abu Dhabi (mainland and ADGM) | Energy transition, AI (G42, MBZUAI), sovereign funds, defence tech, agritech, government |
| Sharjah | Advanced manufacturing, publishing, cleantech, education, creative industries, industrial logistics |
| Ras Al Khaimah and Northern Emirates | Heavy industry, maritime, hospitality, free-trade manufacturing, shared services centres |
United Arab Emirates Implementation Kit
This page tells you the rules. The kit tells you what to do, in what order, and what goes wrong when you skip a step. Built from Dryft's own onboarding checklist for the UAE.
- Step-by-step implementation checklist, from hiring route selection to first WPS payroll
- Jurisdiction selector: MOHRE mainland, commercial free zone or DIFC/ADGM common law
- Compensation structuring: basic versus housing and transport allowances, and the gratuity effect
- Bilingual MOHRE contract and English DIFC/ADGM contract templates
- Visa sequence: quota approval, entry permit, medical screening, Emirates ID, health insurance, stamping
- WPS registration, SIF file setup and ILOE enrolment
- Gratuity accrual or savings scheme configuration, and every official authority with direct links
This guide is general information, not legal, tax or immigration advice. UAE employment, immigration, health insurance, Emiratisation and corporate tax rules change frequently and differ between the federal mainland, individual Emirates and the autonomous free zones. Confirm current figures with a qualified adviser or with Dryft before acting. Last reviewed September 2026.
Ready to hire in the United Arab Emirates?
Tell us who you want to hire and where they sit. You will get a cost model and a compliant route within a day, from a person who has done this before.