Guide to employment, payroll and benefits in

United Arab Emirates

Rivermate offers complete payroll, benefits and compliance services for

United Arab Emirates

01. Overview

Last updated: 

August 19, 2021

Currency
United Arab Emirates Dirham
Capital
Abu Dhabi
Ease of doing business
80.9
Language
Arabic
Population
9890402
GDP growth
0.79%

02. Grow your team in

United Arab Emirates

with Rivermate

Payroll, benefits, taxes, and compliance can be difficult to manage in

United Arab Emirates

, particularly if you don't have established local relationships. You can hire employees in

United Arab Emirates

effectively, conveniently, and in full compliance with all relevant labor laws using Rivermate's global employment solution. We handle the responsibilities and legal risks associated with foreign employment so you can concentrate on growing your company.

03. Summary

The United Arab Emirates, also known as the Emirates, is a nation in Western Asia situated on the Arabian Peninsula's eastern end. It shares land boundaries with Oman and Saudi Arabia, as well as maritime borders with Qatar and Iran in the Persian Gulf. The United Arab Emirates is an elective monarchy made up of seven emirates: Abu Dhabi, Ajman, Dubai, Fujairah, Ras Al Khaimah, Sharjah, and Umm Al Quwain. Each emirate is led by a Sheikh, who together form the Federal Supreme Council, with one of them serving as President of the UAE. The population of the UAE was 9.2 million in 2013, including 1.4 million Emirati people and 7.8 million expatriates; the population is expected to reach 9.89 million by 2020. Islam is the official religion, and Arabic is the official language. The UAE has the world's sixth and seventh largest oil and natural gas reserves, respectively. The first president of the United Arab Emirates, Zayed bin Sultan Al Nahyan, oversaw the growth of the Emirates by investing oil revenues in healthcare, education, and infrastructure. The UAE's economy is the most diverse of all Gulf Cooperation Council members, and Dubai, the country's most populous city, is a global city and international center. The country has shifted its economic focus away from oil and gas and toward tourism and industry. The UAE government does not levy income tax, but it does have a corporate tax structure in place, and a 5% value-added tax was implemented in 2018. The UAE is considered a regional and middle force. The United Arab Emirates is a member of the UN, Arab League, Organization of Islamic Cooperation, OPEC, Non-Aligned Movement, and Gulf Cooperation Council.

04. Public holidays

05. Types of leave

Paid time off

Employees who have worked for at least one year are entitled to 30 days of paid vacation every year.

Public holidays

The United Arab Emirates recognizes seven holidays, and a total of fourteen days are considered non-working days for UAE employees.

Sick days

After 3 months of employment starting from the end of the probation period, an employee is entitled to 90 days of sick leave. The first 45 days of sick leave are paid as follows: First 15 days of illness- leave is paid at 100% of the regular salary 15-30 days of illness- paid at 50% of the regular salary From the 46th day, sick leave is not paid. Within the first 2 days of the sickness, the employee must give notice to their employer and produce a medical certificate from a doctor.

Maternity leave

If a woman has worked for at least one year, she is entitled to 45 days of fully paid maternity leave.If a woman has worked for at least one year and is covered by the DIFC employment legislation, maternity leave is 65 days. The first 33 days are paid at 100% of usual salary, while the last 32 days are paid at 50% of normal pay.

Paternity leave

Paternity leave is enclosed in parental leave.

Parental leave

Both parents are entitled to 5 days of paid leave for private-sector employees. The leave can be taken till the kid is six months old.Pregnant employees are entitled to paid leave for prenatal care under the DIFC.

Other leave

06. Employment termination

Termination process

Contracts of employment can be cancelled by any party. Termination must be in writing, and normally, notice is necessary. The notice period varies between seven and thirty days, depending on the nature of the work and the length of service of the employee. In a limited number of cases, such as for breach of contract conditions or misbehavior, no notice is necessary before terminating an employment contract.


After one year of service, employees are eligible to severance pay. Severance normally ranges between 21 and 30 days per year of service, subject to a cap.

Notice period

To terminate a contract, the terminating party must provide the other party with written notice. A notice period of at least one month and up to three months is required. If the contract was renewed prior to January 1, 2016, and the notice period was not specified in the contract, the three-month default notice period applies.

Severance pay

At the conclusion of their employment, any employee who has completed one year or more of continuous service is entitled to end of service compensation. When calculating the period of service, only compensated days of work are considered. The remuneration is as follows: twenty-one days' pay for each year of service during the first five years and thirty days' pay for each subsequent year. The total remuneration, however, shall not exceed two years' pay. End of service pay will be prorated for fractions of the year if the employee has worked for the company for at least one year in a row.

Probation period

The UAE Labor Law stipulates a six-month probation period.

07. Working hours

General

The standard workweek is 48 hours per day (Sunday through Thursday). It is six hours per day during Ramadan, the month of fasting. At least one hour of rest per day is required (employees should not work five consecutive hours without a break), and Fridays are reserved for 24 hours.

Overtime

Overtime pay is calculated at 125 percent of regular pay for hours worked between 9 p.m. and 4 a.m.; however, overtime pay is calculated at 150 percent of regular pay for hours worked between 9 p.m. and 4 a.m.


Friday work entitles the employee to an additional paid day off and overtime pay equal to 150 percent of the regular rate of pay.

08. Minimum wage

General

The minimum wage in the United Arab Emirate (UAE) nationals is set at AED 25,000 (US$6,800).

09. Employee benefits

General

Employee and dependant insurance coverage for expats is based on their pay, classification, and so forth. Currently, two Emirates require employer-provided health insurance coverage: Abu Dhabi and Dubai. The employee, as well as the employee's spouse and dependents, must be supplied with health insurance. While not required in other Emirates, companies in the UAE are often required to offer workers with employer-sponsored health insurance.

The Hajj is an annual Islamic pilgrimage to Mecca, Saudi Arabia, which Muslims are required to perform at least once in their lives. Employees may be given a one-time pilgrimage leave of up to 30 days without pay under UAE Labor Law.

10. Why Rivermate as your Employer of Record / PEO?

Establishing an entity in

United Arab Emirates

to hire a team takes time, money, and effort. The labor law in

United Arab Emirates

has strong worker employment protection, requiring great attention to details and a thorough awareness of local best practices. Rivermate makes expanding into

United Arab Emirates

simple and effortless. We can assist you with hiring your preferred talent, managing HR and payroll, and ensuring compliance with local legislation without the hassle of establishing a foreign branch office or subsidiary. Our PEO and Global Employer of Record solutions in

United Arab Emirates

give you peace of mind so you can focus on running your business.

Please contact us if you'd like to learn more about how Rivermate can help you hire employees in

United Arab Emirates

via our Employer of Record / PEO solution.

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