Global Hirings

October 16, 2023

3 mins

Things to Know When Hiring in United Arab Emirates

The United Arab Emirates (UAE) is renowned for its sophisticated economy and towering skyscrapers. This nation predominantly concentrates on two paramount sectors: petroleum and tourism. The escalating industrialization within the UAE has led to a surge in available prospects.

Employing in UAE

In order to bring new employees from the United Arab Emirates on board, the employer should possess a thorough understanding of employment terms, labor laws, deductions, and benefits.


Employee Contract

As per the labor laws of the UAE, an employment contract is a requisite part of the hiring procedure. This contract outlines comprehensive employment particulars such as overtime compensation, paid leave, social security, and allowances. The employer has the option to furnish the employment contract in either English or Arabic

Probation Period

The probationary period for employees spans from 3 to 6 months.

Employee Leaves

  • Annual/Earned Leave — 30 days
  • Sick Leave — 15 days
  • Maternity Leave — 8 weeks

Payroll Cycle

In the UAE, employees receive their pay on a monthly basis.

Minimum Wage

As per UAE labor regulations, the minimum wage varies between AED 400 and AED 500.

Overtime Pay

If an employee is obligated to work beyond the standard working hours, they shall receive their daily wage in addition to 25% of the basic salary for the hours rendered. In the case of overtime between 10 PM and 4 AM, the rate will be increased to 50% of the basic salary.

Bonus — 13th Month Pay

The UAE does not have a dedicated law mandating a 13th-month pay. Nevertheless, depending on the employer's discretion, they may provide a 13th-month pay. Additionally, it is customary for employees to receive a 14th-month pay at the year's end.

Employee Benefits

Employers are required to furnish the following obligatory benefits to the employees:

  • Social Security
  • DEWS
  • Health Insurances
  • Maternal Leaves
  • Hajj and Umrah Leaves
  • Educational Leaves
  • Allowances

Employee Income Tax

No income tax is levied on individuals in the United Arab Emirates.


The established value-added tax (VAT) rate in the UAE is 5%.

Termination Process

Upon providing written notice citing a "valid reason," either the employee or the employer can conclude the employment agreement. Nonetheless, it's important to note that an employer is prohibited from terminating an employee who is on sick leave.

Notice Period

The length of the notice period an employee needs to give to the employer depends on the terms of the employment contract, spanning from 30 to 90 days. For probationary employees, the notice period prior to termination falls within the range of 7 to 14 days.

Severance Pay

In the UAE, the severance pay is referred to as Gratuity pay. This payment is eligible solely if the employee has completed one year or more of service. The computation of this compensation follows these guidelines:

  • If the employee has served for more than 1 year and less than 5 years, 21 days’ salary will be paid by the employer.
  • If the employee has served for more than 5 years, 30 days’ salary will be paid by the employer.

In both the mentioned cases, the gratuity pay should not exceed the wage of 2 years.

Visa and Immigration

Employees hailing from the GCC and the UAE are only required to obtain a work permit. Conversely, employees from other regions must secure both a residence visa and a work permit, with sponsorship provided by a recognized UAE corporate entity employer.

Caption: Picture with UAE FLAG and official passport of UAE

Additional employees have the option to work within the UAE under the sponsorship of their spouse's work permit.


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If you're considering hiring employees or contractors in UAE or seeking compliant payroll solutions, reach out to us or book a demo at For further insights, follow us on Twitter @niuralhq. Make informed decisions and ensure a successful hiring process in the UAE!

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