Employment Cost Calculator for United Arab Emirates
Calculate your complete hiring costs for United Arab Emirates employees, including payroll taxes, social security contributions, employee benefits, and management fees. This salary calculator provides accurate employer cost estimates for informed hiring decisions.
Employer Tax Contributions
| Tax Type | Rate | Base |
|---|---|---|
| Corporate Tax | 0% (up to AED 375,000) | Taxable Income |
| 9% (above AED 375,000) | Taxable Income | |
| VAT | 5% | Most goods and services supplied |
| Social Security (UAE Nationals) | 12.5% (Employer) / 15% (Employer - Abu Dhabi) | Gross Remuneration / Total Salary |
| DIFC DEWS (Employers) | 5.83% or 8.33% | Employee's Basic Salary |
Filing & Compliance
- Corporate Tax returns are generally due within nine months from the end of the tax period.
- VAT returns are typically filed quarterly, by the 28th day following the end of the tax period. Monthly filing may be required for certain businesses.
- Social Security contributions for UAE nationals are due by the 15th day of the following month.
The UAE boasts a tax-friendly environment with no personal income tax. However, specific deductions and contributions apply, primarily for UAE nationals.
Social Security Contributions
- UAE Nationals: Contribute 5% of their salary towards social security. Employers contribute an additional 12.5%, with the government adding 2.5%, totaling 20%. In Abu Dhabi, the total contribution is higher, at 26%, with the employer and government contributing more.
- Expatriates: Are not required to make social security contributions.
Pension Contributions
- UAE Nationals: Mandatory pension contributions apply. While specific rates can vary based on years of service and other factors, general guidelines include 5.83% of the basic monthly salary for those with less than five years of service and 8.33% for those with five or more years of service. The employer also makes contributions.
- Expatriates: Not subject to mandatory pension contributions in the UAE.
Other Deductions
Several other deductions can apply, including:
- Health insurance premiums (if applicable and cost-shared).
- Salary advances or loans.
- Fines or penalties as per UAE labor law.
Corporate Tax
- A 9% corporate tax has been in effect since June 1, 2023, applicable to businesses exceeding a profit threshold of AED 375,000.
It is important to note that this information is current as of February 5, 2025, and might be subject to change due to legal or regulatory updates. Consulting with a tax professional for the latest information and personalized advice is always recommended. Further, while personal income tax does not exist, other taxes, like the corporate tax, may indirectly impact an individual's overall financial situation. Lastly, specific regulations can vary between emirates, such as the higher social security contribution rates in Abu Dhabi. Staying informed about these nuances is crucial for accurate financial planning and compliance.
