The United Arab Emirates (UAE) is an economic power in the Middle East and a leading destination for companies looking to set up a strategic hub and hire top talent. Its estimated GDP is USD 514B. The country is a global player in finance and logistics. The economy is centered on oil and gas, real estate and construction, and a growing focus on advanced technology.
Before expanding into the UAE, you’ll need to understand contracts, taxes, wages, benefits, and other employment laws. Our guide will tell you everything you need to know about hiring in the UAE.
What to know before hiring in the UAE
If you’re looking to hire employees in the UAE for the first time, there are legal requirements to be aware of. These norms and laws influence hiring practices in the UAE and many aspects of the employer-employee relationship, including compensation and benefits.
G-P Gia™, our AI-powered global HR agent, can answer your toughest compliance questions across 50 countries — including the UAE — and all 50 U.S. states. Reduce your reliance on outside counsel and cut the time and cost of compliance by up to 95% with Gia.
Here are five things to know about hiring in the UAE.
1. Contracts and termination requirements in the UAE
Employers need to draft a written employment contract in Arabic with English as a reference. The contract covers the employee’s position, duties, probation, compensation, benefits, and termination requirements. Employees who have completed one year of continuous service get end-of-service gratuity. This is 21 days of basic wage per year for the first five years and 30 days for every year after that.
2. Payroll and taxes in the UAE
The UAE doesn’t have payroll or employer taxes. Companies set aside about 8.3% of an employee’s basic salary for end-of-service gratuity. This is a requirement for employees with more than five years of service.
Most companies in the UAE are exempt from corporate income tax, except for oil companies and international banks. Businesses in free zones enjoy corporate tax holidays that can be extended. A 5% VAT applies to most goods and services.
3. Wages and working hours in the UAE
The weekend is Friday and Saturday. Most employees work Sunday through Thursday. Only one weekly rest day (usually Friday) is legally mandated. The maximum working hours are eight per day and 48 per week. There’s a mandatory reduction of two hours per day during Ramadan for all employees, regardless of their religion.
Overtime is limited to two hours per day. It’s paid at 125% of the regular wage, and increases to 150% for work between 10 p.m. and 4 a.m. or on a rest day. There’s no minimum wage in the UAE.
4. Time off in the UAE
Employees get 30 calendar days of paid annual leave after one year of service. Those with 6–12 months of service accrue two days per month.
Sick leave is up to 90 days per year. The first 15 days are at full pay, the next 30 at half pay, and the remainder unpaid.
Maternity leave is 60 days: 45 days at full pay and 15 days at half pay. Extra unpaid leave is possible for pregnancy-related illness. Paternity leave is five working days within six months of the child's birth.
Hajj leave is a one-time, unpaid leave of up to 30 days. Employees get paid leave for official holidays, which are announced annually.
5. Anti-discrimination law in the UAE
Employers are prohibited from discriminating against job candidates or employees based on race, nationality, sex, religion, marital status, or mental or physical disability. At the same time, UAE employment law requires employers to give hiring preference to UAE nationals, and, after that, to other Arab nationals. This is in line with Emiratization policies and government directives.
Top hiring hubs in the UAE
Some cities in the UAE are known for particular industries. Knowing what each region has to offer allows you to focus your hiring efforts in the right place and fill roles faster.
The top talent hubs in the UAE are:
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Dubai is the country’s largest city and business hub. The city’s GDP is USD 134.6B (2023). Hubs like Dubai Internet City, Dubai Media City, and Dubai Knowledge Park attract talent in software development, digital marketing, AI, and creative services.
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Abu Dhabi is the capital of the UAE. The emirate is the center for government and energy policy. It hosts the headquarters of the Abu Dhabi national oil company (ADNOC). The Abu Dhabi global market (ADGM), another financial free zone, attracts fintech and digital finance professionals.
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Sharjah is an industrial and cultural center, with a strong manufacturing base and proximity to Dubai. The Sharjah industrial area makes up 19 sub-divisions and two major free zones. It’s one of the largest industrial zones in the UAE.
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Ajman, Ras Al Khaimah, and Fujairah are smaller emirates emerging as hiring locations, particularly for manufacturing, logistics, and specialized industries. For example, Fujairah is the only emirate on the Gulf of Oman, giving it direct access to global shipping lanes outside the Strait of Hormuz.
Key industries in the UAE
Understanding the UAE’s top industries allows you to benchmark salaries and benefits. You can use this insight to make smart choices about where to invest and grow your talent pool.
The top industries in the UAE include:
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Oil and gas: Abu Dhabi holds the majority of the UAE's oil reserves. Oil and gas revenue funds government investment in diversification projects.
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Trade, logistics, and aviation: The UAE's strategic location between Europe, Asia, and Africa has made it a global trade and logistics hub. This is supported by world-class infrastructure, including Jebel Ali port (one of the world's largest container ports), and large airlines like Emirates and Etihad Airways.
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Construction and real estate: This sector is defined by large-scale developments like the Burj Khalifa and new city projects. Real estate is a strong investment sector, driven by government reforms like the Golden Visa.
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Financial services: The country has financial free zones, including the Dubai international financial centre (DIFC) and the Abu Dhabi global market (ADGM). These attract global banks, asset managers, and insurance companies. The sector is expanding in fintech, digital banking, and investment management.
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Technology and innovation: The UAE is heavily investing in AI, advanced technology, cloud computing, and cybersecurity, driven by strategies like the UAE AI 2031.
The cost of hiring an employee in the UAE
Whether you’re hiring one employee or an entire team in the UAE, expenses are inevitable. Budget for the following:
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Setting up an entity (unless you partner with an employer of record)
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Advertising job positions
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Paying referral bonuses to employees with connections in the UAE
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Paying an in-house hiring committee
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Traveling to and from the UAE, including hotel stays, meals, and transportation
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Partnering with a translator to draft documents or facilitate conversations (if applicable)
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Using a background check service for screening candidates
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Drafting employment contracts, legal review, and consultation with HR and legal experts
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Costs for providing computers, phones, and software licenses
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Onboarding materials and initial training
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Costs for maintaining required tax and payroll records and documentation
According to G-P Verified Sources fromGia, the employer burden rate in the UAE, which includes costs triggered on top of salaries, is about 15%, excluding accident insurance that can vary.
What does a company need to hire employees in the UAE?
Make sure you cover these essentials before expanding your team in the UAE:
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Set up a UAE-registered company.
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Get a trade or business license.
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Register your employee contracts with MOHRE or the free zone authority.
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Set up payroll in line with the UAE’s wage protection system (WPS).
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Keep proper employee records and stay compliant with local labor rights.
Setting up a subsidiary in the UAE can take weeks or months. Use G-P EOR to hire full-time employees in the UAE without setting up your own entity. Build your team at a lower cost and with peace of mind that you’re doing so compliantly.
The steps to hiring employees in the UAE
The hiring process in the UAE is similar to the one you’re likely familiar with in your own country. The hiring process follows five basic steps: advertising the job, evaluating applications, interviewing candidates, sending job offers, and onboarding new employees.
1. Advertising job vacancies in the UAE
Prepare a clear, non-discriminatory job advertisement. Make sure it includes the job title, description, location, and required qualifications. Make sure to follow Emiratization requirements.
2. Evaluating job applications in the UAE
Collect and review applications. All selection criteria should be job-related and non-discriminatory. Shortlist candidates based on their qualifications and experience relevant to the role.
3. Interviewing candidates in the UAE
Focus your interviews on job-related competencies. Avoid questions about protected characteristics like race, religion, gender, and marital status, etc. Keep records of your interviews and hiring decisions. Get documented consent before conducting background checks. Make sure all data handling keeps with UAE data protection laws.
4. Making job offers in the UAE
Draft a formal offer letter in line with MOHRE. Upon acceptance, prepare a fixed-term employment contract for a maximum three years. Register the contract with MOHRE or the relevant free zone authority.
5. Onboarding new employees in the UAE
Now you canonboard new employees. Register your employee with the WPS for salary payments. Offer health insurance. For UAE nationals, register with the pension authority and make required contributions. Keep employee records as required by law.
If you’re working with an EOR like G-P, you won’t have to worry about the administrative burden of onboarding. We’ll streamline the process, so you can focus on training your new hire and integrating them into your company culture.
Hiring contractors in the UAE
Working with independent contractors in the UAE can be a cost-effective way to test the market and build a presence without the commitment of full-time employees. Contractors based in the UAE understand local consumer behavior, rules, and business practices. They’ll be ready to start working quickly with their own equipment and established work processes.
Hiring contractors allows you to easily adjust your talent pool based on your business needs, without the complexities and costs of employment.
Before you enter an agreement with an independent contractor in the UAE, consider the following:
1. Employees vs. independent contractors in the UAE
It’s important to understand the difference between employees and independent contractors. In the UAE, employees work under an employment contract registered with MOHRE, are under the employer’s supervision, and get statutory benefits such as paid leave, end-of-service gratuity, and health insurance.
Independent contractors provide services under a civil law service agreement. Contractors set their own schedules, use their own equipment, and are paid per project or milestone.
2. Penalties for misclassification in the UAE
Classifying someone as a contractor when they’re not can lead to severe penalties. If misclassification occurs, you’ll have to:
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Pay back wages, benefits (such as end-of-service gratuity), and any unpaid social security contributions.
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Face visa cancellations, hiring bans, and extra fines.
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Possible suspension or revocation of the company’s business license.
3. How to pay contractors in the UAE
G-P Contractor™ takes away the messy, time-consuming process of hiring and paying international contractors. You can create and issue contracts and pay contractors with just a few clicks, all while ensuring a compliant process.
Hire employees and contractors in the UAE with G-P
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Make your expansion to the UAE easier with G-P. Contact us or book a demo today.
