Employer of Record in United Arab Emirates

How an Employer of Record works in the United Arab Emirates

An Employer of Record (EOR) in the UAE allows foreign companies to hire in the country without setting up a local entity. The EOR becomes the legal employer that hires employees on behalf of international companies, onboarding them, handling all compliance, and managing the employment relationship, while the foreign employer is free to manage day-to-day operations.

Rivermate provides EOR services in the UAE, and our HR experts have deep knowledge of the country. With our in-country experts, network partners, and the Rivermate platform, we make it easy to hire quickly and compliantly anywhere in the United Arab Emirates.

The UAE labor market: At a glance

The hiring market
Greatest hiring activity:	Dubai
Hiring timelines:	Work permit: 8-10 working days. Full onboarding: a few weeks.
In-demand sectors:	AI, tech, crypto, real estate, construction, sustainability.
Sectors with skills shortages:	Cybersecurity, AI, machine learning.

The salary market
Employer tax contributions:	No contributions for expat employees. For UAE and GCC nationals, GPSSA pension contributions apply, and the employer share is 15% in the private sector.
Minimum wage:	No minimum wage for expats. AED 6,000 for Emiratis in the private sector.
Indicative gross monthly salary:	Low Wage: AED 4,999 or less Lower Mid Wage: AED 5,000-19,999 Upper Mid Wage: AED 20,000-49,999 High Wage: AED 50,000 or more
Income tax brackets:	No income tax.

What it costs to hire an employee in the UAE

Visible payroll costs are low in the UAE because there is no income tax and no social security for expats. But while the payroll tax burden is low, upfront visa and insurance requirements, as well as gratuity liability, add real costs.

While official average wage figures aren’t published for the UAE, wages typically fall into the following brackets:

• Low Wage: AED 4,999 or less
• Lower Mid Wage: AED 5,000-19,999
• Upper Mid Wage: AED 20,000-49,999
• High Wage: AED 50,000 or more

Although there is no statutory minimum wage for expats, the current minimum wage for Emiratis in the private sector is AED 6,000. Work permits are not processed below this figure.

Employers are responsible for paying mandatory health insurance for employees, which is not built into salary costs automatically. This must be paid upfront and cannot be spread out over several months. Employers must provide proof of insurance before visa processing can begin.

Unemployment insurance is also mandatory, but this is employee-funded by a small premium. Employees receive about 60% of their salary for three months if they become unemployed.

When hiring UAE and GCC nationals, GPSSA pension contributions are required. The employer’s share is 15%, but the government covers 2.5% of this in the private sector for salaries under AED 20,000.

Leave accrues initially at 2.2 days/month, and this rises to 2.5 days/month after the first year. Employees receive annual leave of 30 days per year after their first year.

A gratuity also applies after 12 months of service, and this is calculated on base salary and is invoiced at exit. This is equal to 21 days per year for the first five years of service, then 30 days per year afterwards, and it is capped at two years’ basic salary.

Employer cost calculator

Use our calculator to get an accurate idea of the total employment costs in the UAE.

What hiring in the United Arab Emirates really looks like

Market condition	What an employer needs to know
Workforce composition	~96% expats in the private sector.
Immigration procedures	Relatively straightforward; 8-10 days for a work permit.
Contract flexibility	Fixed-term only for expats, tied to visa length.
Emiratization	Quota applies to mainland employers; free zones are generally not affected.

An Expat job market

The UAE is an expat hiring market by default, at least in the private sector, where 96-97% of employees are expats. Dubai is an important regional hub that connects clients across Europe and Southeast Asia, but other major hubs include Abu Dhabi and Sharjah. The AI and crypto sectors are growing fast, and real estate and construction have long been established industries. Sustainability is an emerging focus, due to the environmental footprint of construction.

Visas and onboarding

Visas are fairly straightforward to get for most nationalities. However, a list of restricted nationalities exists, and people from these nationalities will find it much harder to get a visa. There are currently large populations of British, Indian, and Pakistani employees in the country without any particular restrictions.

If the employee does not have a restricted nationality, the work permit is relatively straightforward. It takes about 8-10 days to process, and this is true regardless of seniority. Golden Visa holders do not require the usual employer-sponsored residence visa, but the employer may still need to obtain the appropriate work permit for a Golden Visa holder.

You can apply for the visa via two routes: in-country or from outside the country. However, the routes are largely similar, and they just have different document requirements.

When you want to hire someone who is already in the country, you must wait for the previous employer to issue a full settlement and formally cancel the visa. There is then a 30-day window before you can apply for the new visa.

Once digital approval is issued, the employee can enter the country. They must then carry out a health screening, including a blood test and X-ray. Tuberculosis (TB) is actively screened for, and a positive TB result will block the visa. Employees will need to repeat their medical check roughly every two years of residency in the country.

A digital Emirates ID is then issued via the ICP app, and a physical ID is issued about a week later. Without the Emirates ID, employees cannot open a bank account or get a lease on a property. This is important because employees need a local bank account or recognized payroll card to be paid under the Wage Protection System (WPS).

If an employer is relocating a family, the employee must arrange their own visa first, and their dependents then need to arrange their own visas. Eligibility is determined by salary, and the employee must apply directly through local government channels.

Emiratization

While the percentage of expats in the workforce is high, a quota applies to private companies, which must hire a local once they go over a certain employee count. This is currently set at over 50 skilled employees, and companies must have a 2% annual growth of Emirati employees in skilled positions. In specified sectors, companies with 20-49 employees must employ two UAE nationals.

If the company cannot find a suitable local, they must pay a penalty in the form of an annual fee. However, this does not generally apply to Free Zones.

Contracts

Employment contracts in the private sector are fixed-term. They are generally no longer than three years and are renewable. For expat employees, Rivermate tends to use two-year contracts, which are more cost-effective, but other durations are possible. Probation is not mandatory, and there is a maximum of 6 months.

Country-specific problem that employers must know about

The gratuity payment is one of the key issues that catches employers out. This kicks in after 12 months of service, is calculated and invoiced at exit, and must be paid within 14 days of the contract ending. It equals 21 days per year for the first five years of service, then 30 days per year, up to a maximum of two years’ basic salary.

Importantly, it is calculated on base salary, not total gross. As such, employers often structure a gross offer into components, like housing and transport, which reduces the base and therefore the gratuity. If you don’t divide the salary, you can end up with an unexpectedly large gratuity bill.

Compliance risks employers need to know about

Health insurance

Private health insurance is mandatory when hiring employees in the United Arab Emirates, but it isn’t automatically included in salary costs. Employers in every emirate must provide proof of health insurance before they can issue or renew an employee’s residence permit. Without insurance, the visa cannot be processed.

Requirements for dependents (spouse and children) vary, and Dubai and Abu Dhabi have specific rules for family coverage.

Unemployment insurance

Unemployment insurance, called ILOE, is also mandatory. This is employee-funded through a monthly or annual premium, and eligible employees can receive compensation equal to 60% of their insured salary for up to three months if they are laid off or their job is terminated, subject to the scheme’s eligibility requirements and benefit caps.

Contracts

Expats always have fixed-term contracts rather than indefinite ones. This is tied to the length of the visa, and it is effectively mandatory. The Arabic language contract has legal authority in any dispute. This is worth keeping in mind if you are signing off on an English contract.

Visa cancellation

Upon termination of employment, the employer must cancel the residency visa and work permit through MOHRE and GDRFA as part of the offboarding procedure. Once the visa is canceled, a grace period is triggered, which is typically about 30 days. During this time, the employee can search for a new role, but they cannot legally begin working for a new employer until their new work permit and visa are approved.

WPS

Salaries must be paid through the WPS into a local bank account in the UAE or an approved payroll card. Failing to comply can lead to automatic MOHRE notifications and fines, and you may be unable to arrange work permits and apply for visas.

How Rivermate can help you stay compliant when hiring in the UAE

Our local experts know how to apply local labor laws and will handle every aspect of the employment relationship for you. That way, you can focus on your business and finding the right talent while letting us take care of the rest.

Learn more about EOR services

Benefits of hiring employees through an EOR in the UAE

The UAE market is open and fast-moving. Because of the large proportion of expat workers, almost every hire involves an immigration process, so the real costs don’t appear on the monthly payroll and are found in other places.

Setting up an entity in the country can take 6-7 months and requires local HR and payroll expertise, as well as WPS compliance. An EOR consolidates this. It provides visa and immigration expertise, which is especially important in the UAE because of the high number of expats. Nearly every hire will involve visa sponsorship. Without an entity, you cannot sponsor anyone.

With an EOR, there are no surprises with employer obligations like the gratuity payment, and it will advise on salary structure before the offer is made. You can also use an EOR like Rivermate as a way to test the market with a few employees before committing to it.

Ready to hire in the UAE?

Hiring in the UAE doesn’t stop at finding the right candidate. Rivermate makes the process easy for foreign companies, managing payroll, dealing with taxes, and ensuring full compliance with the law, so you can hire with confidence.

Talk to a UAE Hiring Expert

Sources:

Research for sectors with skills shortages:
https://www.manpowergroup.ae/blog/2026/08/uae-cybersecurity-hiring-in-2026-the-hardest-roles-to-fill-and-how-to-fill-them
https://gulfnews.com/amp/story/business/analysis/uae-hiring-stays-resilient-but-the-real-race-is-now-for-ai-talent-1.500600832

Employer tax contributions: GPSSA
https://gpssa.gov.ae/pages/en/media-center/news/gpssa-insureds-contribution-payment-may-be-extended-15th-day-each-month

Minimum wage: MOHRE
https://www.mohre.gov.ae/en/media-center/news/31/12/2025/mohre-raises-minimum-wage-for-emiratis-in-the-private-sector-to-aed-6000-per-month-effective-1

Wage Bands:
https://researchonline.lse.ac.uk/id/eprint/124359/1/MEC-series-89.pdf

Emiratization:
https://mohre.gov.ae/en/guidance-and-awareness-portal-new/emiratisation-targets
https://www.mohre.gov.ae/en/media-center/news/2/1/2024/mohre-begins-implementing-emiratisation-targets-on-over-12000-private-companies-with-20-49-employees

Gratuity cap and payment deadline:
https://www.uaeexperthub.com/uae-end-of-service-gratuity-rules/
https://slg-strohallegalgroup.com/end-of-service-benefits-eosb-in-the-uae/