Auxilium's human resources and consulting services can help your company access talent in the United Arab Emirates (UAE). Your employees are hired according to local labor laws, which means they will be ready for work within days instead of months - saving you time!
Employer Payroll Contributions
Social Security (basic social security plus housing allowance, based on monthly minimum of 1,000 AED and maximum of 50,000 AED) There is an additional 2.5% contribution made by the Government making the total contribution for social security of 20%. A higher rate of 26% is applied in the Emirate of Abu Dhabi, where the contribution of the employer is 15%, the Government’s contribution is 6%, and the employee’s contribution is 5%.
12.50%Total Employment Cost
Employee Payroll Contributions
Social Security (contributions are for Emiratis only, no contributions for expats)
5.00%Total Employee Cost
Employee Income Tax
No personal income tax
For expatriates, there is no mandatory minimum wage.
For UAE nationals, the minimum wage is determined by the level of education:
The Federal Decree Law of 2022 will set a minimum wage, to bedetermined and announced by the UAE Cabinet after a proposal by the Minister ofHuman Resources and Emiratisation.
The payroll cycle in UAE is generally monthly, with payment made on the last working day.
There is no requirement for a 13th-month salary payment in the United Arab Emirates.
Working hours must not exceed eight hours per day, or forty-eight hoursper week, over a six-day week. It is also stated that working hours can beincreased to nine hours per day for some business. During the Islamicmonth of Ramadan the working hours are reduced by two hours per day.
All work above the standard weekly working hours is to be paid as overtime and is regulated by employment contract/collective agreements. In general, there are two rates of overtime due when overtime is worked. For night-time overtime, between the hours of 9 pm and 4 am, overtime is calculated at 125.00% of the regular salary rate; with 150.00% for any other time.
For work on Fridays, the employee is entitled to an additional paid day off and overtime pay at the rate of 150% of the regular pay.
Paid Time Off
Employees with greater than six months but less than a year are permitted to a minimum of two days paid leave for each month they are employed. Should the employment period be greater than one year, an employee is entitled to 30 days of paid leave annually.
There are 14 official public holidays in the UAE
An employee is entitled to a sick leave of not more than 90 days per year, only after the end of probationary period. The 90 days sick leave can be continuous or intermittent, and the salary is paid as follows:
However, during the probationary period, the employee may get a sick leave without pay, subject to the approval of the employer and based on a medical report issued by the medical entity that stipulates the necessity of the leave.
All female employees are eligible for maternity leave.
Employees who have completed one year of service are entitled to 60 days paid at 100% of the regular salary rate of pay for the first 45 days, reducing to 50.00% of the regular salary rate of pay for the remaining 15 days. Maternity pay is no longer reduced to 50% for employees who have not completed one year of service.
The employee can take maternity leave before and after the due date.
Employees are also entitled to take up to 45 days (consecutive or intermittent) of unpaid leave due to a medical condition related to pregnancy or delivery upon producing a professional medical certificate.
The New 2022 Labour Law confirms that employers may not terminate, or threaten to terminate, a female employee’s employment because she is pregnant or on maternity leave.
In the private sector can be extended to 60 days (being 45 days fully paid leave and 15 days of half-paid leave). Employees can also opt in to an additional 45 days of unpaid leave following the 60-day period in case of any post-partum complications.
There is no additional Paternity leave in UAE.
There is no additional parental leave in UAE. For private-sector employees, both parents are entitled to 5 days’ paid leave. The employees can take leave until the child reaches the age of 6 months.
Employees are entitled to a 10-day study leave per year provided they are enrolled in an accredited institution in the UAE and have completed a minimum of 2 years with their employers.
The termination process is standard in UAE and based on labour law requirements unless an employer can provide sufficient cause for dismissal without notice (due to misconduct, etc.)
Notice of termination must be in writing and sent to the relevant governmental authorities.
According to UAE Labour law, a minimum of 30 days mandatory notice period is required.
The amount of notice period for employees who work under the DIFC employment law is determined by length of employment. This can be as notice days to be worked or paid in lieu, as below:
End Of Service Payment
In the UAE, severance pay is mandatory if applicable and determined by length of service and must be paid within 14 days of the termination date.
An employee who has completed one year or more of continuous service is entitled to end of service gratuity of 21 calendar days’ basic pay for each year of the first five years of service; and 30 calendar days’ basic pay for each subsequent year of service, provided that the entire total remuneration does not exceed two years pay.
The probation period in UAE for permanent employees is generally between 3 and 6 months, however, the New Labour Law now requires a minimum of 14 days’ notice when terminating an employee on probation.
An employee may resign by providing the employer with the contractual notice period (which must be a minimum of 30 calendar days, or longer, as per the contract of employment). Alternatively, the employee may resign without notice asset out under Article 121 of the law.
Any foreigners coming to work in UAE will need to be registered with the UAE immigration authorities. All foreigners must have secured a job offer from a company operating in the UAE, and some require specific qualifications that the ministry of foreign affairs may require.
For working in Dubai, a UAE Employment Permit/work permit is required. In general, these are valid for up to two years for anyone offered a job in the UAE and provides the right to live and work in the UAE for the duration of the visa, which is renewable after two years.
The standard rate is 5%.