Employer of Record in United Arab Emirates

The UAE (Emirates) is a modern, diverse and rapidly growing country situated at the eastern end of the Arabian Peninsula. It consists of seven emirates, with Abu Dhabi as its capital. Dubai is probably the most famous of the emirates due to its record-breaking engineering projects, luxury goods, and high-quality cost of living.

The Emirati government has established favorable foreign investment initiatives, such as low corporate taxes, making it easier for businesses to join this innovative, technology and trade-driven hub.

The country’s large expat community accounts for 88% of the population, creating a diverse hub for global hiring. When foreign companies recruit in the UAE, they aim to establish a strong leadership presence in the Middle East and, possibly, in Asia.

International sales, project management, operations, and executive leadership roles attract foreign employers to the UAE. The reason so many of these roles are available is that there is no personal income tax, it operates according to international business practices, and salaries are higher than in most other countries in the region.

Given the large number of immigrants, one might expect the UAE to have relatively flexible immigration and labor laws. This is not the case. Both immigration and employment are strictly monitored in the UAE, with quotas, and no one can stay or work in the country without sponsorship from a registered company.

There is another solution. Partnering with an Employer of Record (EOR) in the Emirates. The EOR, like Rivermate, operates as an established legal entity in the country and hires employees on your behalf. They also handle payroll, benefits and compliance risk.

How an Employer of Record (EOR) Works in United Arab Emirates

An EOR provider facilitates the fast and efficient entry of your business into the UAE as follows:

1. You Find the Talent: You recruit and select the best candidate for your team.
2. The EOR Hires Your Candidate: The EOR legally hires the employee in the UAE. They draft compliant employment contracts, and attend to regulatory requirements.
3. Onboarding and Visas: The EOR manages the onboarding process, including securing necessary work permits and visas for your employee. This process takes between one and three weeks.
4. Payroll and Benefits: The EOR processes salary payments according to payroll regulations, taxes, and benefits for your team. This includes managing contributions to national pension plans for UAE nationals.
5. Ongoing HR Support: The EOR provides ongoing HR support, ensuring compliance with the UAE's labor regulations, which are overseen by the Ministry of Human Resources and Emiratisation (MoHRE). You can find more about these regulations on the official UAE government website (https://u.ae/en/information-and-services/business/employment/employment-laws-and-regulations-in-the-private-sector).
6. You Manage Your Team: You retain full control over your employee's daily tasks, projects, and performance.

Why use an Employer of Record in United Arab Emirates

International companies that partner with an EOR want to establish a strategic presence in a country or test the market. Other times, they want to build small teams to facilitate international expansion. Whatever the reason, an EOR offers the following benefits:

Here are some of the key benefits of using an EOR in the UAE:

• Fast Market Entry: You can hire employees in the UAE in a matter of days, rather than the months it can take to set up a local entity.
• Reduced Costs: You avoid the financial burden associated with setting up and maintaining a legal entity in the UAE
• Risk Mitigation: he EOR assumes the legal responsibility for your employees, reducing your exposure to government oversight and labor disputes.
• Focus on Your Business: By outsourcing HR and administrative tasks, you can focus on your core business activities.

Hiring in the Emirates is somewhat less rigid than in European countries, but employers should not underestimate the compliance and immigration structures. The UAE operates under multiple employment networks, including mainland, free zone and family-sponsored residency. Each has different employment regulations and immigration processes.

Expert insight: One of the most effective ways for employers to mitigate risk is to verify a candidate's immigration status early in the hiring process. Ensuring compliance from the outset can save time, resources, and potential legal issues down the line.

Documentation management is crucial in the UAE. Long delays occur because the candidate did not submit the correct paperwork and has unattested qualifications. These delays cause slow onboarding, reprocessing of immigration documents and additional expenses.

The Emirates offers a deep talent pool in a strategic region, and skilled professionals often have exposure to business practices in both Europe and Asia. However, candidates in the UAE are bound by work sponsorship, which can complicate the transition to another company. It should not be assumed that the same work permit will apply to the new employer.

The complexities of immigration and work status in the UAE can cause onboarding delays, and so can incomplete or unclear employment contracts. It is highly advisable that first-time employers in the UAE finalize these details before assuming a start date.

Employment contracts & must-have clauses

The main foundation for drawing up an employment contract in the UAE is whether a person is employed under the mainland or free zone employment regulations. Before finalizing any employment contract, check the candidate's immigration and work status.

Your contracts must be in writing and in Arabic. If you provide a translation in another language, the Arabic version is the one that holds up legally. Compensation should be provided in United Arab Emirates Dirham.

Here are the essential clauses to include in your employment contracts:

• Job Title and Responsibilities: Clearly define the employee's role and duties.
• Compensation and Benefits: Specify the salary, including base pay and any allowances.
• Working Hours: Outline the expected working hours.
• Leave Entitlements: Detail annual leave and other types of leave.
• Termination Clauses: Include notice periods and conditions for ending the contract.
• Confidentiality and Data Protection: Protect your company's sensitive information.
• Non-Compete Clauses: If applicable, define the scope, duration, and geographical limits of any non-compete agreement.

Probation periods

In the UAE, you can place a new employee on a probation period to assess their suitability for the role.

• The probation period cannot be longer than six months.
• You can only place an employee on probation once.
• During probation, you must give at least 14 days' written notice to terminate the employment contract.
• If an employee wants to resign during probation to work for another UAE employer, they must provide 30 days' notice. If they plan to leave the country, a 14-day notice is required.

Working hours & overtime

Standard working hours in the UAE are straightforward.

• The maximum is 8 hours per day or 48 hours per week.
• During the holy month of Ramadan, daily working hours are reduced by two hours for all employees.
• You can ask an employee to work up to two hours of overtime per day.

Overtime pay is calculated based on the employee's basic salary:

When Overtime is Worked	Overtime Pay Rate
On a normal business day	Basic salary + 25% uplift
Between 10 p.m. and 4 a.m.	Basic salary + 50% uplift
On a rest day or public holiday	A substitute day off or normal wage + 50% uplift

Public & regional holidays

Your employees are entitled to paid time off for public holidays. The official public holidays in the UAE for 2025 are:

Holiday	Date
New Year's Day	January 1
Eid Al Fitr	March 30 - April 2
Arafat Day	June 5
Eid Al Adha	June 6 - 8
Islamic New Year	June 27
The Prophet Muhammad's birthday (PBUH)	September 5
National Day	December 2 - 3

Note: Islamic holiday dates are subject to moon sightings and may vary.

Hiring contractors in United Arab Emirates

Hiring contractors in the UAE is possible, but immigration and work status will determine if a particular person is recognised as a contractor. The industry in which the person is allowed to operate also plays a significant role in contractor hiring.

Expert insight: Employers can avoid costly errors by confirming immigration status, contractor activity and whether additional documentation will be required before signing a service agreement.

When hiring a contractor, the agreement should specify the compensation, payment method, scope of work, and completion date. Such an agreement will help prevent a contractor from being classified as a traditional employee.

The following criteria differentiate contractors from employees:

• Has freedom over how, when, and where they work.
• Can work for multiple clients at once.
• Uses their own tools and equipment.
• Is not entitled to employee benefits like paid leave and overtime.

An Employer of Record (EOR) can help you correctly classify employees and prevent fines, back payments for social security, and other penalties.

In the United Arab Emirates, your payroll data is processed through the Wage Protection System (WPS), an electronic transfer system that ensures that local payroll is paid on time and into the correct bank account.

Typical compensation structures are split into a base salary and allowances. Housing and transport allowances are frequently provided to help employees cover the cost of living in Dubai. Mandatory benefits and variable pay also form part of most compensation packages.

Payroll cycles & wage structure

You should pay your employees monthly. If your employment contract doesn't specify a pay period, you must pay wages at least once a month. You are considered in default if you don't pay wages within 15 days of the due date.

While there are no mandatory components for a salary, a typical wage structure includes:

• Basic Salary: This is the core amount agreed upon in the employment contract. It's the basis for calculating overtime and end-of-service benefits.
• Allowances: It is common to offer allowances for housing and transportation. You can also include other allowances for things like education or utilities.

Overtime & minimums

The standard work week is 48 hours, typically eight hours per day. Any time worked beyond these hours is overtime.

• Regular Overtime: Pay is 125% of the employee's regular wage.
• Night Overtime: For hours worked between 9 p.m. and 4 a.m., the rate increases to a 150% premium.
• Public Holiday Overtime: Work on a public holiday is compensated at 150% to 200% of the regular wage.

There is no national minimum wage for expatriate employees in the UAE. However, wages must be fair and align with industry standards. For UAE nationals, there are minimum wage requirements based on their education level.

Employer taxes and contributions

As an employer, you are responsible for a few key contributions for your UAE and GCC national employees.

Contribution	Rate	Notes
Pension (UAE & GCC Nationals)	15% of gross salary	In Abu Dhabi, this rate is 15%.
Workplace Insurance	Varies	Employers are required to provide workplace insurance.
Health Insurance	Varies	You must provide health insurance for your employees.

Employee taxes and deductions

One of the main attractions of working in the UAE is the absence of personal income tax. However, there are pension contributions for certain employees.

Deduction	Rate	Notes
Personal Income Tax	0%	There is no income tax on employee salaries.
Pension (UAE & GCC Nationals)	11% of gross salary	This is a mandatory contribution for Emirati and GCC national employees.

In the UAE, mandatory benefits and employer-provided perks significantly affect whether a job offer is considered attractive in the market. Statutory benefits set a baseline for compliance, while additional company benefits help differentiate an organization and attract and retain top talent.

Expert insight: Candidates in the UAE evaluate opportunities not only on base salary but on the overall benefits package, including leave, healthcare and allowances.

Statutory leave

The UAE Labour Law outlines several types of mandatory leave for employees.

• Annual Leave: After one year of service, you are entitled to 30 days of annual leave. If you have worked for more than six months but less than a year, you get two days of leave for each month worked.
• Maternity Leave: Female employees receive 60 days of maternity leave. The first 45 days are fully paid, and the next 15 days are at half pay.
• Paternity Leave: An employee whose wife has a newborn is entitled to 5 working days of parental leave. This can be taken consecutively or at different times within the first six months of the baby's birth.
• Sick Leave: Once you complete your probationary period, you are entitled to a maximum of 90 days of sick leave per year. The first 15 days are fully paid, the next 30 are at half pay, and the final 45 days are unpaid.
• Other Leave: The law also provides for other types of leave, such as bereavement leave of up to 5 days and study leave of 10 days.

Public holidays & regional holidays

The UAE government announces public holidays each year. These are generally the same for both public and private sector employees. If you have to work on a public holiday, your employer must give you another day off or pay you your normal wage plus a bonus of 50%.

Holiday	Approximate Date
New Year's Day	January 1, 2026
Eid Al Fitr	March 20–22, 2026
Arafah Day and Eid Al Adha	May 26–29, 2026
Hijri New Year	June 16, 2026
Prophet Mohammed's birthday	August 25, 2026
National Day	December 2 and 3, 2026

Typical supplemental benefits

Employers in the UAE must provide certain benefits by law. Many companies offer additional perks to attract top talent.

Statutory Benefits	Non-Statutory (Supplemental) Benefits
End-of-Service Gratuity	Relocation packages
Health Insurance	Bonuses
Pension (for Emirati and GCC nationals)	Additional time off
Unemployment Insurance	Annual flights home for expatriates
Overtime Pay	Housing or transportation allowances

How an EOR can help with setting up benefits

Setting up a compliant and competitive benefits package in a new country can be complex. An Employer of Record (EOR) simplifies this process for you.

An EOR already has a legal entity established in the UAE. This means you don't have to go through the process of setting one up yourself. They understand the local labor laws and statutory requirements for benefits.

Here is how an EOR can help:

• Ensure Compliance: An EOR ensures your benefits package meets all legal requirements under UAE Labour Law.
• Offer Competitive Packages: They have insight into the local market and can help you create a benefits package that is attractive to top talent.
• Manage Administration: The EOR handles the day-to-day administration of benefits, from enrollment to managing leave requests.
• Simplify Payroll: All benefits and compensation are managed through a single, streamlined payroll process.

Using an EOR allows you to hire and onboard employees in the UAE quickly and efficiently, without the administrative burden of managing benefits and payroll yourself.

The United Arab Emirates terminations are perceived as more flexible than those in European countries, but in practice, they are carefully managed because employment is closely tied to immigration and residency. Offboarding isn’t simply about making a final payment before an employee transitions to another employer. It may also involve visa cancellations and sponsorship updates.

Notice periods

When you or your employee decides to end the employment contract, a written notice is required. The length of this notice period is usually stated in the employment contract.

According to UAE Labour Law, the notice period must be:

• At least 30 days.
• A maximum of 90 days.

During the probationary period, a minimum of 14 days' written notice is needed for termination. Both you and the employee can agree to a longer notice period in the contract. If one party fails to provide the required notice, they must pay the other party compensation equal to the salary for the notice period.

Severance pay

In the UAE, severance pay is known as an end-of-service gratuity. An employee is entitled to this payment after completing at least one continuous year of service. The amount is calculated based on the employee's basic salary and their length of service.

Here is how you calculate severance pay:

• For the first five years of service: 21 days of basic salary for each year.
• For each additional year of service after five years: 30 days of basic salary for each year.

The total severance pay cannot exceed the amount of two years' total salary. You must pay all final settlement dues, including the end-of-service gratuity, within 14 days of the employee's last day of work.

How Rivermate handles compliant exits

When you partner with an Employer of Record like Rivermate, we manage the entire offboarding process for you. We make sure every step is compliant with UAE Labour Law.

Here’s how we simplify employee exits:

• Clear Communication: We handle the communication with the departing employee, ensuring all information is delivered clearly and professionally.
• Accurate Calculations: We calculate the final settlement, including severance pay and any other outstanding payments, to ensure accuracy and compliance.
• Legal Compliance: We manage all the necessary legal paperwork and submissions to the Ministry of Human Resources and Emiratisation (MOHRE). This includes canceling the employee's work permit and visa.
• Smooth Transition: We create a structured offboarding plan that includes asset collection and knowledge transfer, making the process smooth for both you and the employee.

By handling these complexities, we help you avoid legal risks and ensure a respectful and compliant exit for your employees.

Navigating the visa and work permit process in the United Arab Emirates can seem complex. Any foreign national who wants to work in the UAE needs a valid work permit and a residence visa. Typically, an employer sponsors these documents. This means you must have a job offer from a company that is legally set up in the UAE to start the application process. The standard work visa is the most common route for foreign nationals and is usually valid for one to two years.

Employment visas & sponsorship realities

An Employer of Record (EOR) can be a practical solution for hiring in the UAE, especially if your company doesn't have a legal entity in the country. An EOR can legally employ staff on your behalf, handling payroll, compliance, and visa sponsorship.

Here are some key points about EOR sponsorship:

• What an EOR can do: An EOR acts as the legal employer for your workers in the UAE. This allows you to hire talent without the cost and complexity of setting up a local entity. They manage the visa application process and ensure everything is compliant with local labor laws.
• What an EOR can't do: There can be limitations to EOR sponsorship. For example, some countries do not legally permit an EOR to sponsor a visa. Also, companies may face restrictions like visa quotas, which can limit the number of employees they can sponsor.
• Practical routes: Using an EOR is a fast and straightforward way to bring on talent. It's a flexible, low-risk solution for businesses looking to test new markets or expand their teams across borders.

Business travel compliance

For short-term visits to the UAE for business purposes, you'll need a visit visa. Working on a tourist or visit visa is illegal. There are a few options for business travel:

• Single-entry visa: This visa is suitable for a one-time business trip to attend meetings, conferences, or explore investment opportunities. You can get a single-entry visa for 60, 90, or 120 days.
• Multiple-entry visa: If you plan to visit the UAE frequently for business, a multiple-entry visa is a better option. This visa allows you to enter the UAE multiple times and stay for up to 90 days per visit.
• Visa on arrival: Citizens of many countries can get a visa on arrival. The length of stay varies from 30 to 180 days depending on your nationality.

To apply for a business visa, you will generally need:

• A valid passport with at least six months of validity.
• A confirmed return ticket.
• Proof of sufficient funds to support your stay.
• An invitation letter from a UAE sponsor.