Guide to Hiring in the United Arab Emirates

Employment trends and job market analysis for the UAE

Best known for its highly-developed infrastructure and celebrated diversity, the United Arab Emirates (or UAE) is an economic powerhouse of the Middle East. It is widely known as a business-friendly country in the region that welcomes foreign workers and investments.

TAs of 2026, the UAE remains one of the largest and most diversified economies in the Middle East. According to the International Monetary Fund (IMF), the UAE’s GDP at current prices is projected to reach approximately USD 621.6 billion in 2026.

The country's economic outlook remains positive, supported by strong performance in non-oil sectors such as tourism, logistics, financial services, technology, and construction. The IMF projected real GDP growth of 4.8% in 2025 and 5.0% in 2026, while the World Bank forecast growth of 4.6% in 2025 and 4.9% in 2026. The Central Bank of the UAE has been even more optimistic, projecting growth of 4.9% in 2025 and 5.3% in 2026.

Continued economic diversification, foreign investment, infrastructure development, and expansion in non-oil industries are expected to support the UAE’s long-term growth trajectory.

Payroll and taxes

Employer contributions

The UAE has enacted a federal Corporate Tax under Federal Decree-Law No. 47 of 2022, effective for financial years starting on or after 1 June 2023. The rate is 0% on taxable income up to AED 375,000 and 9% above AED 375,000. In addition, the UAE introduced a 15% Domestic Minimum Top-up Tax (DMTT) on multinational enterprises with global revenues above €750 million for financial years beginning on or after 1 January 2025 (Cabinet Decision No. 142 of 2024)

Employee contributions

There is no personal income tax law enacted in the UAE. This means that there are no individual tax registration or reporting requirements.

Employers must contribute to staff pensions, but we will cover this later in the guide.

Social security contributions

Social security contributions are generally applicable only to UAE nationals, although GCC nationals may be covered under separate pension arrangements through their home-country social security systems. Both employers and employees are required to contribute to the applicable pension scheme.

For Emiratis registered under Federal Law No. 7 of 1999 (generally those who were registered before 31 October 2023), the total contribution is 20% of the pensionable salary, consisting of:

• Employer: 15%

• Employee: 5%

• Government: 2.5% contribution for eligible Emiratis working in the private sector

For Emiratis who entered the labour market for the first time on or after 31 October 2023 and are covered by Federal Decree-Law No. 57 of 2023, the total contribution is 26% of the pensionable salary, consisting of:

• Employer: 15%

• Employee: 11%

• Government: 2.5% contribution towards the employer’s share for eligible Emiratis working in the private sector whose contribution account salary is less than AED 20,000

Contribution rates in Abu Dhabi vary depending on the employee’s registration status with the Abu Dhabi Pension Fund (ADPF):

New Active Members (registered on or after 1 December 2023)

• Employer: 15%

• Employee: 11%

Total contribution: 26%

In-Service Active Members (registered before 1 December 2023)

• Employer: 15%

• Employee: 5%

Total contribution: 20%

Employee contributions are deducted from salary each month. Pension contributions are generally due by the 15th day of the following month. Employers who fail to make payments on time may be subject to late-payment penalties, including a charge of 0.1% per day on outstanding amounts where applicable under the relevant pension regulations.

Labour laws to be aware of in the UAE

The recent implementation of the UAE Labour Law in February 2022 brought significant changes to the employment landscape. Companies operating in the private sector (excluding the DIFC and ADGM) are required to employ individuals on fixed-term contracts, and the three-year limit initially imposed on these contracts was removed in October 2022, providing greater flexibility for employers and employees to determine contract duration.

Although fixed-term contracts remain mandatory, either party may terminate the agreement before its expiry in accordance with the applicable notice requirements under UAE labour law, meaning fixed-term contracts can operate similarly to permanent employment arrangements in practice.

Further reforms were introduced through Federal Decree-Law No. 9 of 2024, which came into effect on 31 August 2024 and amended certain provisions of Federal Decree-Law No. 33 of 2021. Under these amendments, labour disputes involving claims of up to AED 50,000 may be decided directly by the Ministry of Human Resources and Emiratisation (MoHRE), with such decisions carrying the same enforceability as court judgments unless appealed within 15 working days. The time limit for filing labour claims was also extended from one year to two years from the date the entitlement became due.

In addition, penalties for labour law violations were significantly increased, with fines ranging from AED 100,000 to AED 1,000,000 for certain offences, including fictitious Emiratisation practices and other serious breaches of employment regulations. These reforms have strengthened employee protections, enhanced dispute-resolution mechanisms, and increased compliance obligations for employers operating in the UAE.

Minimum retirement age

Retirement and pension eligibility in the UAE vary depending on an employee’s nationality, pension scheme, and date of registration.

For Emiratis covered by Federal Decree-Law No. 57 of 2023 (registered on or after 31 October 2023):

• Minimum retirement pension eligibility age: 55 years

• Minimum contribution service required: 30 years

For Emiratis covered by Federal Law No. 7 of 1999 (registered before 31 October 2023):

• Existing pension and retirement rules continue to apply

Early retirement eligibility:

• Men: 55 years of age with 20 years of service

• Women: 50 years of age with 20 years of service

For expatriate employees:

• There is no mandatory retirement age under UAE labour law

Work permits are commonly issued and renewed up to 65 years of age

Employment beyond 65 is generally permitted through annual work permit renewals, subject to employer sponsorship and approval requirements

Important note:

Employees cannot be compelled to retire solely on the basis of age unless required under the applicable pension scheme or employment framework.

Pension calculation

The pension amount is determined based on the average pensionable salary received during the last six years of service and the employee’s total duration of service.

Under Federal Decree-Law No. 57 of 2023 and Abu Dhabi’s 2023 pension law reforms, this six-year averaging method applies across both the public and private sectors, replacing the previous three-year calculation basis.

Minimum wage

There is currently no minimum wage in the UAE, as there is no basic salary percentage under UAE Labour Law. However, for Emirati nationals in the private sector, MoHRE has set a minimum wage of AED 6,000 per month effective 1 January 2026.   

Working hours

The UAE’s working week underwent a major transition on 1 January 2022, and the change is now firmly established. The federal government operates a Monday–Thursday full-day schedule with a half-day on Friday, while Saturday and Sunday are the official weekend days. Most private-sector employers, banks, and educational institutions have also adopted a Saturday–Sunday weekend, aligning with international business practices.

A notable exception is Sharjah, which operates a four-day working week (Monday–Thursday) with a Friday–Sunday weekend. While employers retain flexibility in setting working arrangements, the Saturday–Sunday weekend has become the standard across most of the UAE.

In most sectors, business hours in the UAE follow a continuous working day rather than the traditional split-shift model. Typical office hours are generally between 8:00 or 9:00 AM and 5:00 or 6:00 PM, Monday to Friday.

Split-shift schedules remain common in certain industries, including retail, hospitality, construction, and some customer-facing service businesses

Federal government employees typically work:

• Monday to Thursday: 7:30 AM to 3:30 PM

• Friday: 7:30 AM to 12:00 PM

During Ramadan, private-sector working hours are reduced by two hours per day in accordance with UAE labour regulations. This reduction applies to all private-sector employees regardless of religion or nationality. Certain sectors, such as healthcare, hospitality, retail, and other operationally critical services, may require employees to work longer hours, with overtime compensation applied in accordance with UAE labour law where applicable.

Employee benefits

Mandatory benefits

In the UAE, it is compulsory to register employees with the national government pension programme and contribute to it regularly. All employees working in the UAE that come from countries that make up the Gulf Cooperation Council (Saudi Arabia, Kuwait, Qatar, Bahrain, and Oman) are entitled to pension programmes of their home countries.

The total mandatory pension contribution required for eligible UAE nationals depends on the applicable pension scheme and the employee’s registration status. Under the federal pension system, pension contributions are calculated on a pensionable salary with a minimum contribution salary of AED 3,000 and a maximum pensionable salary of AED 70,000 per month for private-sector Emiratis covered by Federal Decree-Law No. 57 of 2023.

In Abu Dhabi, different limits apply under the Abu Dhabi Pension Fund (ADPF), where the maximum pensionable salary is AED 100,000 per month for New Active Members and AED 150,000 per month for In-Service Active Members in the private sector. Employers should ensure contributions are calculated using the applicable pensionable salary thresholds based on the employee’s pension scheme and registration status.

As of 1 January 2025, health insurance coverage is mandatory for private-sector employees and domestic workers across all UAE emirates.

In addition to the existing mandatory health insurance systems in Dubai and Abu Dhabi, the UAE introduced a Basic Health Insurance Scheme for employees and domestic workers in Sharjah, Ajman, Fujairah, Ras Al Khaimah, Umm Al Quwain
Key features of the scheme include:

• Annual premium of approximately AED 320

• Policy validity of two years

• Coverage for inpatient and outpatient medical treatment

• Coverage for chronic illnesses and pre-existing conditions without a waiting period

Co-payment requirements include:

• Inpatient treatment: 20% co-payment, capped at AED 500 per visit and AED 1,000 annually

• Outpatient treatment: 25% co-payment, capped at AED 100 per visit

• Medication: 30% co-payment, capped at AED 1,500 annually

The basic package does not cover:

• Pregnancy and childbirth
• Dental treatment

Employers are responsible for obtaining the required health insurance coverage as part of the residency visa issuance and renewal process.

Supplementary benefits

When it comes to providing benefits for employees in the UAE, it’s useful to have a strong understanding of the economy and local expectations so that you can provide genuine value for your employees. Your benefits plan must address your workers’ needs as well as give you a competitive advantage in the careers market.

You can offer a variety of supplementary benefits to set your company apart, including:

• Performance awards
• Access to mental health support and counselling
• Training and development courses
• Financial advisory services
• Wellness and health events

Voluntary alternative End-of-Service Benefits (EOSB) scheme

As an alternative to the traditional end-of-service gratuity system, the UAE introduced a Voluntary Alternative End-of-Service Benefits (EOSB) Scheme under Cabinet Resolution No. 96 of 2023, effective from 1 November 2023.

Available on a voluntary basis to mainland private-sector employers (excluding entities operating in the DIFC and ADGM, which maintain separate schemes), the programme allows employers to contribute to approved investment funds instead of accruing a traditional gratuity liability. Employers contribute 5.83% of an employee’s basic salary for employees with less than five years of service and 8.33% for those with five or more years of service. Employees may also make additional voluntary contributions of up to 25% of their salary.

Upon termination of employment, employees are entitled to receive their accumulated contributions and any applicable investment returns in accordance with the scheme rules. Further guidance issued by the Ministry of Human Resources and Emiratisation (MoHRE) in 2025 clarified requirements relating to fund selection, employee enrolment, administration, and employer compliance.

Employee rights

Employees in the United Arab Emirates are entitled to certain rights and protections under the labour laws mentioned above. These rights include:

Equal treatment

Employees have the right to be treated fairly and without discrimination on the basis of race, nationality, religion, gender, or age. Discrimination in hiring, promotion, or any other employment-related decision is prohibited.

Written employment contract

Employees have the right to a written employment contract that clearly outlines the terms and conditions of employment, including job description, compensation, working hours, benefits, and other relevant details.

Wages and payment

Employees have the right to receive their wages on time through the applicable payroll and Wage Protection System (WPS) requirements.

Under Ministerial Resolution No. 340 of 2026, effective 1 June 2026:

• Salaries are due on the first day of each month.

• There is no grace period for salary payments.

• Employers are considered compliant if at least 85% of total wages are paid on time.

• The rules apply to companies regulated by MoHRE and to participating free zones that utilise the Wage Protection System (WPS).

• Late payment of wages may result in escalating administrative penalties and restrictions on company services

Workplace safety

Employers are required to provide a safe and healthy working environment for their employees. They should adhere to safety standards and regulations to ensure the well-being of workers.

Types of leave available

Annual leave

• Two days' leave for every month if their service is more than six months and less than one year of continuous employment
• A minimum of 30 vacation days a year if their service exceeds one year of continuous employment

Annual leave is usually calculated on the basis of a calendar month rather than by working days.

According to the New 2022 Labour Law, employees can be required to use up all their annual leave in the applicable annual leave year, and employers are encouraged to update any policies that limit carry-over of leave.

Sick leave

If an employee is sick or has injuries that prevent them from working, they should report to their employer within a maximum of two days.

Employees in the UAE are not entitled to sick pay during their probationary period, but after a period of three months following probation, sick leave is applicable as follows:

• The full wage for the first 15 days
• Half wage for the next 30 days

Any sick leave exceeding 30 days must be taken unpaid. If the illness has been directly caused by misconduct, e.g. excessive drinking, the employee is not entitled to sick pay. Employees are required to provide evidence of their illness via an official medical certificate.

Workers can resign during their sick leave, provided that the reason for resignation is approved by a physician. In this case, employers must pay all the wages the employee is entitled to until the end of the 45-day period of sick leave entitlement.

Employers are not permitted to dismiss an employee during their sick or annual leave unless the employee has used up all of their sick leave and is unfit to return to work. In this instance, the employee should receive a full gratuity and end-of-service entitlement. They will not be entitled to wages for the days they have not reported to work after the end of their leave.

If an employee does not report back to work within seven days from the day they were due back, employers are within their rights to terminate the employment agreement.

Maternity and paternity leave

Maternity leave in the UAE is applicable for 60 calendar days. Maternity pay is as follows:

• Full pay for the first 45 days
• Half pay for the remaining 15 days

Employees are also entitled to take maternity leave if they have miscarried after six months of pregnancy or in the event of a stillbirth or death of the child following birth. This leave will be the same as is detailed above.

If an employee gives birth to an infant with an illness or disability, they are entitled to an additional 30 days of leave, which can be further extended by another 30 days of unpaid leave if necessary.

At the end of the maternity leave, employees are allowed to extend their leave for a maximum of 45 days without pay.

During the six months following the birth of a child, employees who are nursing are entitled to two daily half-hour intervals to nurse their baby. These intervals are considered working hours and should not incur a wage deduction. According to the New 2022 Labour Law, employers cannot terminate an employee because they are pregnant or taking maternity leave.

Both male and female employees are entitled to 5 days of fully paid parental leave, which can be taken within six months of the child’s birth.

Compassionate leave

In the UAE, compassionate leave is as follows:

• Five days in the event of the death of a spouse
• Three days in the event of the death of a parent, sibling, child, grandchild or grandparent

Study leave

Employees who have worked at a company for more than two years can take ten days of study leave per year. This leave allows them to sit examinations. They will need to be affiliated with an approved UAE educational institution to qualify for this leave.

Hajj leave

Muslim employees may be eligible for up to 30 days of unpaid leave for pilgrimage

Public holidays

The UAE observes the following national holidays:

• New Year’s Day
• Eid al-Fitr (celebrated on five consecutive days)
• Arafat Day
• Eid al-Adha (celebrated on three consecutive days)
• Islamic New Year
• Prophet Muhammad’s Birthday
• Commemoration Day
• National Day (celebrated on two consecutive days)

Attracting talent

The UAE’s low-tax environment, low crime rate and advanced business culture make it an excellent choice for business expansion.

However, these factors also make the UAE a competitive environment for companies looking to attract talent. To differentiate your organisation from others in the UAE, consider employee benefit programs that provide a unique experience reflective of the rewarding nature of the UAE market.

Here are some tips on how to hire people in the UAE:

Provide opportunities for career development

High performers are always looking for ways to learn new things and will more than likely want to join a company that provides career growth opportunities. These opportunities could take the form of professional development plans or 1-2-1 mentorship.

Regardless, organisations should focus on offering potential employees clear information about potential career pathways they can take within the company.

Build policies that promote a good work-life balance

The COVID–19 pandemic introduced some significant changes in the way organisations around the world do business. Employee perspectives changed, and now workers place a high amount of value on companies that promote flexibility and employee well-being.

Reasons for wanting to work at least partly in a non-home work environment included wanting to feel more engaged in their job, to take part in face-to-face meetings and to maintain social connections.

Where possible, organisations should offer a flexible working routine that incorporates both remote and non-remote arrangements. 

Exciting projects to work on

A small local population and wealth of energy resources creates opportunities for expat expertise. Because of the huge growth potential in the region, this is even true in areas with strict local content policies. Large capital development projects on the horizon could provide jobs for locals and expats for the next two decades.

Not only is the UAE continuing to invest heavily in expanding and modernising its energy sector, but it is also accelerating investment in renewable energy, clean technology, and sustainability-focused infrastructure. The Barakah Nuclear Energy Plant, which reached full four-unit operation in 2024, now generates approximately 25% of the UAE’s electricity needs and plays a key role in the country’s clean energy strategy.

Other major ongoing initiatives include the continued expansion of the Mohammed bin Rashid Al Maktoum Solar Park, one of the world’s largest single-site solar projects, as well as investments in green hydrogen, carbon capture technologies, and renewable energy developments led by Masdar.

Additionally, the legacy of Expo 2020 Dubai continues through Expo City Dubai, which has been transformed into a sustainability-focused innovation and business district supporting the UAE’s long-term economic diversification and net-zero ambitions. These initiatives highlight the UAE’s commitment to building a more sustainable and diversified energy future.

Hiring best practices

Expanding a business to the United Arab Emirates (UAE) involves a series of strategic decisions, including hiring the right talent to ensure the success of the venture. Here are some hiring best practices for companies expanding to the UAE:

Understand local labour laws

Before you start hiring, familiarise yourself with the UAE's labour laws and regulations, especially current Emiratisation requirements. Seek legal counsel if needed to ensure full compliance with employment laws and visa requirements.

Local market knowledge

Leverage the knowledge of local experts or global employment outsourcing consultants who understand the UAE job market. They can help you navigate cultural nuances and employment trends specific to the region.

Competitive compensation

Research salary benchmarks in the UAE to offer competitive compensation packages. Consider benefits such as housing allowances and healthcare, which are often part of employment packages.

Onboarding and orientation

Develop a comprehensive onboarding process that helps new hires acclimate to the company's culture and work expectations. Cultural sensitivity training may be beneficial.

Legal contracts

Ensure all employment contracts comply with local laws and clearly define the terms and conditions of employment, including benefits, termination clauses, and probationary periods.

Performance evaluation

Implement performance evaluation systems that align with local expectations and standards. Regular feedback and goal-setting can help motivate employees.

Employee benefits

Offer competitive benefits packages, including healthcare, retirement plans, and wellness programs, which can be attractive to potential hires.

Talent retention

Focus on employee retention strategies, as turnover can be costly. Provide opportunities for growth and development, as well as a positive work environment.

Market your brand

Build a strong employer brand in the UAE by showcasing your company's values, culture, and career opportunities through various marketing channels and within job postings. Strong marketing can also attract passive candidates who are not necessarily seeking work, but would be open to a career move if the right opportunity presented itself. 

Employee engagement

Engage with employees to understand their needs and concerns. Happy and engaged employees are more likely to contribute to the success of your expansion.

What should the ideal onboarding process look like?

The onboarding process in the UAE should be a seamless blend of legal compliance, cultural awareness, and role-specific training. 

Orientation is crucial, introducing your new hires to the company's culture, values, and local business etiquette. Cultural sensitivity training is vital for fostering an inclusive work environment.

Employees should be guided through documentation and contracts, with a clear understanding of their rights and responsibilities under UAE labor laws. Role-specific training should equip them with the skills necessary for success.

Language proficiency, if needed, should be assessed and addressed to facilitate effective communication. Clarify compensation structures, benefits, and end-of-service benefits, and ensure employees understand their rights.

Safety procedures, compliance training, and company policies should be thoroughly explained. Provide ongoing support and feedback channels and foster social integration through team-building activities. Discuss opportunities for professional growth and outline the exit process.

Termination of employment

The UAE's labor regulations are governed by Federal Decree-Law No. 33 of 2021, which establishes guidelines for employers and employees in termination scenarios. The law aims to ensure transparent and fair workplace practices.

Types of employment contracts

Under Federal Decree-Law No. 33 of 2021, all employment relationships in the UAE mainland private sector must be governed by fixed-term employment contracts.

Key changes include:

• Unlimited-term contracts are no longer issued for new mainland private-sector employment relationships.

• Fixed-term contracts may be renewed or extended by mutual agreement.

• Employment may still be terminated before the expiry of the contract, provided the applicable notice requirements and legal obligations are met.

• Different employment models, including full-time, part-time, temporary, flexible, remote, and job-sharing arrangements, remain permitted under UAE labour law.

Grounds for termination

Valid grounds for termination include performance-related issues, misconduct, and redundancy due to economic necessity. Employers may terminate an employee for consistently failing to meet job expectations or for gross misconduct, such as falsifying documents or breaching workplace safety. Terminations are also permitted due to operational changes, such as business closure or restructuring.

Arbitrary dismissal

The law prohibits arbitrary dismissal, which occurs when an employee is terminated for reasons unrelated to their performance, conduct, or operational necessity. If a dismissal is proven to be arbitrary, the court may order the employer to pay compensation of up to three months' salary, based on the employee’s most recent wage.

Immediate termination without notice

Under the UAE Labour Law, immediate termination without notice is permitted under specific conditions, such as:

• Submitting forged documents or assuming a false identity
• Causing significant financial loss to the employer or intentionally damaging property
• Violating workplace safety instructions
• Divulging confidential company information
• Being absent without valid justification for more than 20 non-consecutive days or 7 consecutive days in one year

An employee can leave without notice if the employer fails to meet contractual or legal obligations despite 14 days’ notice to the Ministry of Human Resources and Emiratisation (MoHRE) or assaults or harasses the employee.

Notice period

Both employers and employees must provide notice according to the employment contract terms, typically 30 to 90 days. If either party fails to give proper notice, they must compensate the other for the full notice period or the remaining duration.

Probationary periods

The legal probationary period in the UAE is a maximum of six months.

Severance pay

Employees who have completed at least one year of service are entitled to end-of-service benefits. The gratuity calculation is based on the employee’s basic wage: 21 days of salary per year for the first five years and 30 days per year after five years.

What are my options for hiring employees?

If you’re looking to expand your business to the UAE, a company like Airswift can help you get started with your remote hiring process. We offer employment solutions designed to ensure you stay compliant across all local legal requirements, including tax, payroll, termination procedures and working hour obligations.

Our in-country teams have the expertise and knowledge necessary to save your organisation from unnecessary risk, freeing up your time to focus on the other prospects of international business growth.

Talent acquisition

Airswift can source and deliver the talent you need across a wide range of industries by leveraging our expertise and employee networks across the UAE.

Whether you want to hire contractors for an urgent project or need to hire locally to cover a staffing shortage, we are committed to finding a contractor to suit your needs. Our contract hire services are catered to organisations that need temporary hires to fulfil a range of requirements.

Finally, if you’re looking to hire candidates that can grow with your company, we have professional search services that provide access to highly skilled job seekers who are ready for work. We also take care of all the administrative processes, from shortlisting candidates to screening and onboarding them.

Employer of record

We understand that hiring staff and expanding globally is a complex process and an Employer of Record in the United Arab Emirates can help you hire employees without setting up a local entity. Working with an Employer of Record in the UAE allows you to get up and running in as little as 72 hours.

Once your employee has been given the green light, we will take care of everything from onboarding and benefits management to tax filings and annual leave allowance.

*Although the information provided has been produced from sources believed to be reliable, no warranty, express or implied, is made regarding the accuracy, adequacy, completeness, legality or reliability of any information. For the latest information and specific queries regarding particular cases, please contact our team.