Hiring employees in the United Arab Emirates involves navigating a sophisticated labor framework designed to balance employer flexibility with comprehensive worker protections. Understanding these regulations is crucial for compliance and successful recruitment when you hire employees in the UAE. For companies that want to hire quickly and stay compliant without setting up a local entity, partnering with an Employer of Record UAE is often the most efficient solution. This article will guide you through the essential steps, from employment contracts to benefits and payroll.
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Leah Maglalang
Business Coordinator UAE
Employers in the UAE must comply with comprehensive labor regulations that govern written employment contracts, working hours, end‑of‑service benefits, and the Wage Protection System (WPS) for salary payments. Clearly drafted fixed‑term contracts, compliant working time arrangements, and proper registration with the authorities are essential to maintaining a legally sound employment relationship in the UAE.
Providing mandatory employee benefits such as locally compliant health insurance, paid annual leave, and end‑of‑service gratuity is crucial for attracting and retaining talent in the competitive UAE labor market. These benefits not only ensure compliance with UAE labor law but also help position employers as attractive and reliable organizations for both local and expatriate employees.
Utilizing an Employer of Record (EOR) in the UAE can significantly simplify hiring and compliance, enabling companies to employ staff without setting up a local entity while ensuring adherence to visa, payroll, and labor law requirements. If you prefer to focus on your core business while we handle contracts, visas, payroll, and WPS, you can hire employees in the UAE without a local entity through FMC Group’s people‑first EOR model. By outsourcing HR administration, payroll, and statutory obligations to an EOR, businesses can focus on their core operations while reducing legal and operational risks in the UAE.
In the UAE, written employment contracts are legally required and form the foundation of the employment relationship. Since February 2022, all private sector employment contracts must be fixed-term agreements, marking a significant shift from the previous unlimited contract system.
Contracts must include key components such as:
This helps to avoid misunderstandings and ensure alignment.
Clearly outlining employee salary, benefits, and additional perks in the job offer ensures transparency and builds trust. Employers in mainland must register employment contracts with the Ministry of Human Resources and Emiratisation (MOHRE) within 14 days of signing, ensuring compliance with UAE labor laws and setting a positive tone for the employment relationship.
The basic salary must constitute a minimum of 60% of the total compensation package, with allowances such as housing, transportation, and other benefits making up the remainder. This structure is important for calculating end-of-service gratuity, which is based solely on basic salary.
For businesses new to the UAE market, an Employer of Record (EOR) can provide employment contracts that comply with local laws and include necessary provisions, helping manage the complexities of UAE employment regulations.
The working hours and days should be specified in the employment contract.
The standard working week in the UAE is typically Monday through Friday, though some organizations operate Sunday through Thursday. The maximum working hours are 8 hours per day or 48 hours per week.
Employees’ daily working hours are generally limited to eight hours. However, the specific schedule must be clearly stated in the employment contract. This regulation ensures flexibility while maintaining a balanced workload.
Employees in the UAE are entitled to a minimum of one rest day per week, though this can vary based on the employment contract. After 5 consecutive working hours, employees must receive a break of at least one hour, which is not counted as working time.
During Ramadan: Working hours are reduced by 2 hours per day for all employees, resulting in a maximum of 6 hours daily. This reduction applies to both Muslim and non-Muslim employees without any reduction in salary.
Summer Midday Break: From mid-June to mid- September, outdoor work is prohibited between 12:30 PM and 3:00 PM to protect workers from heat exposure. Violations result in fines of AED 5,000 per worker, with a maximum penalty of AED 50,000.
Overtime must not exceed 2 hours per day, and total working hours should not surpass 144 hours over any three-week period.
Employees are entitled to additional compensation for overtime:
These rates are mandated by Federal Decree-Law No. 33 of 2021 and apply to full-time employees unless exempted under specific job categories (like senior management or highly skilled roles).
As of 2026, the UAE does not have a federally mandated minimum wage for all private sector workers. However, the government has established salary guidelines that serve as practical benchmarks:
Professional Category | Recommended Minimum Monthly Salary |
University graduates | AED 12,000 ($3,267) |
Skilled technicians | AED 7,000 ($1,905) |
Skilled laborers with secondary education | AED 5,000 ($1,361) |
These guidelines apply to both UAE nationals and expatriates and have remained relatively stable, with only minor adjustments for inflation.
Salary levels vary significantly by role, industry, and emirate:
Most professional white-collar EOR employees fall within the AED 17,000–40,000 per month range.
It’s important to note that salaries in the UAE are not subject to personal income tax. The agreed salary is paid in full to the employee, with no differentiation between gross and net salaries. There are no social security payments for expatriates to the government, though employers must provide health insurance and calculate end-of-service gratuity.
Employee benefits are crucial for attracting and retaining skilled talent in the UAE. These mandatory provisions ensure employee well-being and security. From health insurance to end-of-service gratuity and paid leave policies, understanding and providing these benefits is essential for employers.
Health insurance is mandatory for all UAE residents, including expatriates. As of January 1, 2025, mandatory health insurance coverage has been extended to all seven emirates.
Employers are legally required to provide health insurance for their employees as a prerequisite for issuing or renewing residency permits. The insurance policy must be purchased from UAE-approved providers; international or foreign insurance plans are generally not accepted for residency or visa purposes unless specifically recognized by UAE authorities.
Coverage Requirements:
Many employers offer enhanced group health insurance plans that provide comprehensive coverage at competitive rates. The health insurance requirement also extends to maintaining coverage for 45 days after employment termination to allow time for visa cancellation.
End-of-service gratuity is a mandatory severance payment calculated based on the employee’s basic salary and length of service. This statutory benefit provides financial security for employees upon termination of employment.
Calculation for Fixed-Term Contracts:
Important Notes:
UAE labor law mandates comprehensive paid leave entitlements:
Annual Leave:
Employees are entitled to a minimum of 30 calendar days of paid annual leave per year once they have completed one year of continuous service. For employees who have worked at least six months but less than one year, the entitlement is two days of paid leave per month.
Calendar days are counted, not workdays. Some companies offer 22 working days instead of 30 calendar days for employees with a five-day workweek, which is permitted if the benefit equals or exceeds the statutory minimum.
Maternity Leave:
Female employees are entitled to 60 days of maternity leave:
Additional provisions include:
Paternity Leave:
Male employees are entitled to 5 working days of fully paid paternity leave, which must be taken within 6 months of the child’s birth.
Parental Leave:
Both parents are entitled to 5 working days of fully paid parental leave to care for their child, which can be taken within 6 months of the child’s birth.
Sick Leave:
Employees are entitled to a maximum of 90 calendar days of sick leave per year, structured as follows:
Employees must notify their employer and provide a medical certificate from a licensed healthcare provider within three days. Employees cannot be terminated while on sick leave.
Understanding the payroll system is essential for businesses operating in the UAE. Unlike many countries, the UAE does not impose personal income tax on employee salaries, making it an attractive destination for talent.
All private sector employers in the UAE must process salary payments through the Wage Protection System (WPS), an electronic wage transfer system mandated by MOHRE and the Central Bank of the UAE.
Key Requirements:
Employers must have a corporate bank account registered in the UAE.
The typical payroll cycle in the UAE occurs monthly, with employees usually paid by the end of each month or the first few days of the following month. Employers must adhere to the WPS payment deadlines specified in Ministerial Decree No. 788.
Failure to comply with WPS requirements results in graduated penalties including:
UAE employment contracts typically divide compensation into:
While not legally required, structuring salary with allowances is standard practice in the UAE and helps optimize end-of-service gratuity costs for employers, as gratuity is calculated only on the basic salary.
Hiring in the UAE requires strategic planning to navigate the diverse, multicultural labor market. Understanding local recruitment best practices is crucial for attracting the right talent in a competitive environment.
Posting job openings on popular job boards and professional networks enhances visibility and attracts diverse candidates:
Job advertisements should include:
The interview process in the UAE typically consists of several rounds with structured competency-based evaluations focusing on skills and experiences:
Best Practices:
A comprehensive onboarding process is essential for integrating new hires and should cover:
For expatriate employees, onboarding should also address:
Understanding termination processes and notice periods is crucial for managing employment relationships in the UAE. Employers must provide clear written notice and adhere to proper procedures to ensure compliance.
Under Article 43 of the UAE Labour Law, the notice period for terminating an employment contract ranges from 30 days (one month) to 90 days (three months). The specific period must be clearly stated in the employment contract.
During Probation Period:
After Probation Period:
If either party fails to honor the agreed-upon notice period, they must compensate the other party with an allowance equivalent to the full salary for the unobserved portion of the notice period.
Employees retain their full contractual rights during the notice period, including:
Termination Costs and Entitlements
When terminating an EOR employee in the UAE, several costs may arise:
During Probation:
After Probation:
If Termination is Deemed Arbitrary:
If the dismissal is proven arbitrary or without just cause, UAE labor courts may impose penalties, including compensation of up to three months’ salary in addition to other entitlements.
Fixed-Term Contract Early Termination:
For fixed-term contracts ended prematurely without valid cause, the employee may be entitled to compensation, often up to three months’ salary.
The probation period in the UAE is regulated by Federal Decree-Law No. 33 of 2021. An employer cannot appoint a worker for a probationary period exceeding 6 months from the date of commencement.
Key Provisions:
During probation, annual leave typically starts accruing after six months, and sick leave is generally unpaid unless specified otherwise in company policy.
Foreign nationals must obtain proper work authorization to be employed legally in the UAE. The visa process involves multiple steps and is typically managed by the employer or their EOR partner.
Step 1: Entry Visa Quota Approval
Employers must apply through MOHRE or the relevant free zone authority for approval. Free zone companies must meet specific office space and employment ratio requirements. Processing time is typically three working days.
Step 2: Signed Employment Contract
The employer provides a contract in English and Arabic (and the employee’s native language if required). The employee must sign and return it within 14 days.
Step 3: Employment Entry Visa
Once approved, the employee receives an entry visa (typically valid for 60 days) to enter the UAE for medical tests and ID registration.
Step 4: Medical Examination
All applicants must undergo medical screening at a government-approved clinic in the UAE to confirm they are free from contagious diseases. Results are typically provided on the same day.
Step 5: Emirates ID
Apply within 15 days of arrival. Biometric data is collected, and the Emirates ID card is delivered within 5-7 working days.
Step 6: Residence Visa
The employer submits the residence visa application to the relevant immigration authority (ICA or GDRFA) within 60 days of the employee’s arrival.
Step 7: Work Permit
Once the residence visa is stamped, the official work permit is issued, and the employee is fully authorized to work.
For DMCC and other free zones, the total cost for a standard 2-year employment visa—including government fees, medical test, Emirates ID, and processing—typically ranges from AED 5,000 to AED 7,500 per employee. All visa and immigration costs are direct charges borne by the employer and cannot be recovered from the employee.
Document Requirements
From the Employee:
From the Employer:
When hiring in the UAE, companies typically choose between establishing their own legal entity (free zone or mainland) or working with an Employer of Record (EOR). The best option depends mainly on your headcount, timeline, and long‑term strategy.
For many organizations planning to hire a small to medium‑sized team (around 1–15 employees), an EOR offers faster setup, lower upfront cost, and significantly reduced compliance risk compared to setting up a local entity from scratch.
EOR vs own UAE entity overview
Criteria | Employer of Record (EOR UAE) | Own UAE Entity (Free Zone or Mainland) |
Setup time | Approx. 2–3 weeks to hire and onboard, assuming documents are ready. | Typically 2–4 months to establish company, open bank account, and be ready to hire. |
Up‑front cost | Low; no share capital, only visa/government fees plus monthly EOR fee per employee. | High; share capital (depending on zone), licensing, registration, office lease, bank account setup, advisory and admin costs. |
Legal / compliance risk | Low; EOR manages labor law compliance, WPS payroll, visas, health insurance, EOSB accrual and stays updated on regulatory changes. | Higher; all responsibility for labor law, WPS, visas, HR processes, audits, and penalties sits with your local entity. |
Operational flexibility | High; easy to scale up or down, test the UAE market, or exit without liquidating a company. | Lower; closing or downsizing can involve liquidation procedures, license cancellations, lease break‑fees, and more time. |
Recommended headcount | Ideal for 1–15 employees, pilot teams, or roles in multiple emirates/free zones. | More attractive once you plan 15+ long‑term employees and a stable, larger operation. |
Focus | Lets you focus on sales, operations, and growth, while the EOR handles HR, payroll, and compliance. | Requires building internal HR, payroll, and compliance capabilities or relying heavily on local advisors. |
For many international companies, a pragmatic approach is to start with an Employer of Record in the UAE, validate the market, and then consider setting up their own entity once the business reaches a certain size and stability. At that point, employees can be transitioned from the EOR to the new entity in a structured, compliant way.hlbhamt+1
You can learn more about how this works in practice on our Employer of Record UAE page.
An Employer of Record (EOR) can simplify the process of hiring employees in the UAE. Acting as the legal employer for your workforce, an EOR allows businesses to hire employees without needing to establish a local legal entity. This can be particularly beneficial for companies looking to expand quickly or manage a flexible workforce.
Learn how our Employer of Record UAE service works in practice, including visa sponsorship via DMCC and full WPS‑compliant payroll management.
Contractual Structure:
The EOR arrangement involves two main contracts:
Compliance Management:
One primary benefit of using an EOR is managing compliance. An EOR ensures adherence to local labor regulations, MOHRE requirements, WPS compliance, and mandatory benefits administration, transferring liability from the business to the EOR and reducing legal risks.
EORs provide localized employment contracts that comply with UAE labor laws, ensuring all contractual obligations are met. This is particularly advantageous for international businesses unfamiliar with UAE employment law.
Speed to Market:
An EOR enables companies to hire employees and commence operations in the UAE within 2-3 weeks, compared to 2-4 months when establishing a legal entity.
Visa and Immigration Support:
FMC Group manages the entire visa sponsorship process, Emirates ID application, and all related government processing as part of the EOR service. This includes:
Comprehensive HR Administration:
The EOR handles all administrative tasks:
Flexibility and Scalability:
Companies can test the UAE market, hire specific skill sets, or scale teams up and down without the commitment of establishing a legal entity.
Cost Considerations
While an EOR provides significant benefits, it’s important to understand the cost structure:
FMC Group provides transparent, itemized cost estimates for budgeting when hiring EOR employees in the UAE.
To get a tailored breakdown for your roles,
Day-to-Day Employee Management
The client company maintains functional control over employees:
This structure ensures clear communication, efficient HR administration, and full compliance while the client retains control over daily business activities.
To ensure a successful and compliant hiring process in the UAE, follow these established best practices:
Hiring employees in the UAE involves navigating a comprehensive landscape of labor laws, employee benefits, payroll requirements, and immigration processes. Understanding these elements is crucial for building a compliant and efficient workforce. From drafting clear fixed-term employment contracts to managing WPS payroll and leveraging the benefits of an Employer of Record, each step requires careful consideration and adherence to local regulations.
The UAE offers significant advantages for employers, including tax-free personal income, access to a highly skilled and diverse international talent pool, world-class infrastructure, and a strategic geographic location connecting Asia, Europe, and Africa. The government’s proactive workforce reforms and streamlined visa pathways enable companies to hire quickly while remaining compliant.
By following the best practices outlined in this guide, businesses can successfully hire and manage employees in the UAE. This not only ensures legal compliance but also fosters a positive work environment, ultimately contributing to the overall success and growth of the company. Whether you are expanding your business or just starting out, understanding and implementing these practices will set you on the path to success in the UAE labor market.
If you want to apply these best practices without setting up your own entity, you can hire employees in the UAE without a local entity by partnering with FMC Group as your EOR.
Yes, you can employ employees in the UAE without a legal entity by utilizing an Employer of Record (EOR), which manages payroll, taxes, benefits, visa sponsorship, and compliance with local labor laws on your behalf. This allows you to retain operational control while ensuring legal employment practices.
An employment contract in the UAE must clearly outline key components such as job description, working hours, salary breakdown (basic and allowances), contract duration (with start and end dates), probation period, notice period, and end-of-service benefits. Ensuring these elements are included provides clarity and mutual understanding for both the employer and employee.
The UAE does not have a federally mandated minimum wage for all private sector workers as of 2026. However, government guidelines suggest AED 12,000 monthly for university graduates, AED 7,000 for skilled technicians, and AED 5,000 for skilled laborers. Actual salaries vary by role, industry, and emirate.
Mandatory employee benefits in the UAE consist of health insurance, end-of-service gratuity, and statutory paid leave (annual leave, sick leave, maternity/paternity leave). Public holiday entitlements are also mandatory. These benefits ensure a comprehensive level of social security and support for employees.
The payroll system in the UAE operates through the Wage Protection System (WPS), which mandates that all salary payments be processed electronically through approved banking institutions. The typical payroll cycle is monthly, with employees receiving their full salary (no income tax deduction). Employers must ensure WPS compliance to avoid penalties.
End-of-service gratuity is a mandatory severance payment calculated based on the employee’s basic salary and length of service. For employees with 1-5 years of service, it equals 21 days of basic salary per year. For service beyond 5 years, it increases to 30 days per year. The maximum gratuity cannot exceed two years’ total salary.
The probation period in the UAE cannot exceed 6 months and cannot be extended under any circumstances. During probation, employers must provide 14 days’ written notice for termination, while employees need 14 days’ notice to leave the UAE or 30 days’ notice to change jobs within the UAE.
Talk to FMC Group about hiring in the UAE via EOR
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