Guide · UAE
UAE EOR Cost: What It Costs to Employ Someone in the UAE (2026)
Guide · Updated 14 November 2026
UAE employment costs depend on nationality, pension history and the applicable employment regime. For an eligible private-sector Emirati under GPSSA’s 2023 law, AED 18,000 of monthly contribution salary produces AED 2,250 of employer-funded pension, making salary plus employer pension AED 20,250. For an eligible foreign full-time employee with AED 12,000 basic salary, first-five-year gratuity accrual is approximately AED 700 monthly. Insurance, permits, residence requirements, benefits and service fees must be budgeted separately. UAE employment wages are not subject to personal income tax.
Reviewed in November 2026 against official UAE Government, MOHRE, GPSSA and pension-fund guidance. The examples are budgeting illustrations; the applicable law, employee status and agreed benefits determine actual costs.
The parts of a UAE EOR bill
Salary and allowances. Identify basic salary and allowances in the contract. Annual leave taken during employment is paid at full wage; federal gratuity, statutory overtime and payment for unused annual leave on termination generally use basic wage. Wages may be paid in AED or another currency agreed in the employment contract, through an authorised payment route.
Employer obligations. Check the competent pension fund or GCC extension scheme, eligible gratuity or an alternative savings arrangement, and the required health insurance. Confirm each item and its supporting cost in the proposal.
Permit and residence costs. Foreign employees need the appropriate work authorisation. Entry, medical, Emirates ID and residence costs depend on their current status and jurisdiction; family-sponsored and Golden Visa residents may use a dedicated work-permit route. Renewal periods are not universally two years.
Service charges and deposits. Separate employment costs from administration charges and any agreed refundable deposit. Employee pension deductions reduce take-home pay. ILOE premiums are normally the covered employee’s responsibility and are not automatically an employer payroll deduction.
Pension for UAE and GCC nationals
| Scheme | Employee | Employer | Notes |
|---|---|---|---|
| GPSSA, 2023 law | 11% | 15%; qualifying private-sector government support covers 2.5 percentage points below AED 20,000 | Covered nationals first entering the scheme from 31 October 2023, subject to prior-insurance rules; private-sector contribution salary AED 3,000–70,000 |
| GPSSA, earlier law | 5% | 12.5%, with 2.5% paid by the government | Members remaining under the earlier regime because of their insurance history; private-sector contribution salary AED 1,000–50,000 |
| Abu Dhabi Pension Fund | 5% for earlier members; 11% for new members from 1 December 2023 | 15% | Check membership history: pensionable salary caps generally AED 150,000 for in-service members and AED 100,000 for new members |
| GCC nationals | Home-country rate | Home-country rate | Check eligibility, home-country rates and the competent UAE authority under the GCC insurance-extension arrangement |
Apply the competent fund’s contribution-salary and timing rules; GPSSA private-sector guidance generally uses January salary or the joining-month salary for a later starter. The AED 6,000 Emirati minimum applies to MOHRE-covered private-sector employment from 1 January 2026, with existing salaries adjusted by 30 June 2026. Sources: UAE Government, pensions for UAE nationals; GPSSA, Federal Law No. 57 of 2023; MOHRE, minimum wage for Emiratis.
End-of-service gratuity for expatriates
Under the federal regime, eligible foreign full-time employees receive gratuity after at least one continuous year of service: 21 days’ basic wage per year for the first five years and 30 days per later year, subject to the two-year wage cap. Unpaid absence is excluded from eligible service; other work patterns, pension coverage and approved savings schemes require separate treatment. Final employment entitlements are generally payable within 14 days of termination.
For budgeting, AED 12,000 basic monthly salary produces a provision of AED 700 per month for the first-five-year band (12,000 ÷ 30 × 21 ÷ 12) or AED 1,000 for later service. These are accrual illustrations, not a complete final-settlement calculation.
| Arrangement | How it works |
|---|---|
| Mainland and most free zones | Federal gratuity for eligible employees as outlined above, unless an applicable alternative scheme governs their benefits |
| Alternative savings scheme | An employer may enrol eligible employees in an approved scheme: monthly basic subscriptions generally 5.83% or 8.33%, depending on service. Preserve pre-enrolment gratuity rights and follow the scheme rules. |
| DIFC | For covered employees, monthly DEWS or approved qualifying-scheme contributions at 5.83% or 8.33% of basic salary, depending on service; exemptions and pre-scheme rights require separate checks |
| ADGM | Its own employment regulations, in force since 1 April 2025; we confirm the arrangement for each role |
Source: UAE Government, end-of-service benefits. Expatriate hires are handled through Expat Employment in the UAE.
Health insurance and unemployment insurance
Employer health-insurance obligations extend across the UAE, with different local arrangements. The basic scheme introduced for Sharjah, Ajman, Umm Al Quwain, Ras Al Khaimah and Fujairah has an illustrative premium of AED 320 per year, before applicable VAT and fees. Actual premiums depend on eligibility, age, cover and location. Confirm the required cover for each employee, including any existing government coverage.
ILOE applies to covered employees, with statutory exemptions. Premiums are AED 5 monthly for basic salary up to AED 16,000 and AED 10 above that, plus VAT. The employee is normally responsible for subscription and payment; a payroll deduction is not automatic. Exempt categories include investor-owners, domestic workers, temporary-contract workers, under-18s and pension-receiving retirees taking a new job. Sources: MOHRE, health insurance scheme; ILOE unemployment insurance scheme.
Worked examples
Monthly amounts in AED for illustrative full-time roles. These examples include salary and the employer-funded pension or gratuity provision only; insurance, permits, residence costs, benefits and service fees are excluded. The national examples assume GPSSA’s 2023 regime, full salary as contribution salary and eligibility for government support where shown. Foreign examples assume eligible non-GCC employees under the federal gratuity regime, without an alternative savings scheme.
| Employee | Monthly salary | Employer pension or gratuity | Employer cost per month | Employer cost per year | Employee deduction |
|---|---|---|---|---|---|
| UAE national, 2023 law | AED 18,000 | AED 2,250 (12.5%; the government adds AED 450) | AED 20,250 | AED 243,000 | Pension AED 1,980 (11%) |
| UAE national, 2023 law | AED 30,000 | AED 4,500 (15%) | AED 34,500 | AED 414,000 | Pension AED 3,300 (11%) |
| Non-GCC foreign employee, years 1 to 5 | AED 20,000 (basic AED 12,000) | AED 700 gratuity provision | AED 20,700 | AED 248,400 | No pension in this example; ILOE is separate if covered |
| Non-GCC foreign employee, after year 5 | AED 20,000 (basic AED 12,000) | AED 1,000 gratuity provision | AED 21,000 | AED 252,000 | No pension in this example; ILOE is separate if covered |
To try your own figures, use the UAE employer cost calculator.
Other costs to plan for
- Overtime. Federal overtime generally uses basic hourly wage plus at least 25%, or 50% between 10 pm and 4 am; the night premium excludes shift workers. The usual two-extra-hour daily limit has statutory exceptions. Rest-day compensation follows separate rules.
- Leave on exit. Pay unused statutory annual leave using basic wage; leave taken during employment is paid at full wage.
- Notice. Ordinary post-probation notice is the agreed 30–90 days. Full wages continue during notice; compensation for unserved notice is due where required. Probation and summary dismissal have separate rules.
- Renewals. Budget for the actual work-permit, residence and insurance validity periods; not every foreign hire needs a new employer-sponsored residence visa.
- Benefits. Include any agreed flights, schooling, housing and other contractual benefits, plus applicable taxes or fees.
How to read an EOR quote for the UAE
Ask to see the cost for a full year, not only a month: salary split into basic and allowances, the right pension rate or gratuity provision, the actual health insurance premium and the benefits you plan to offer. A good quote also shows the service fee as its own line, lists one-time items separately, states whether there is a deposit and when it is returned, and gives the exchange rate used if you pay in dollars.
NNRoad does not publish a standard price for the UAE. We review the role, the workplace, the salary and the person’s nationality first, then send a written proposal that shows:
- the full employment cost, line by line, for a full year
- NNRoad’s service fee and any one-time item, listed separately
- any deposit and when it is returned
- the working calendar for invoices and paydays
EOR or your own UAE company?
Operating your own UAE employer entity involves the appropriate business licence, premises or permitted workspace, establishment registrations, banking, tax compliance and payroll. The requirements depend on the activity and jurisdiction.
A third-party employment arrangement may suit a limited team or market entry, provided it is lawful for the role. NNRoad and the client confirm whether a licensed assignment allowing client supervision or a managed service with NNRoad supervising its employees is appropriate. An EOR label does not itself remove licensing, immigration or tax obligations. See the steps to hiring in the UAE.
Questions about UAE EOR cost
How much does an employer of record cost in the UAE?
The total depends on salary, benefits, pension or gratuity coverage, insurance, permits and the lawful employment model. Separate employment costs, service charges, one-time items and any refundable deposit in the written estimate. NNRoad reviews the role, nationality, workplace and applicable regime before confirming a cost breakdown.
Is there income tax on salaries in the UAE?
UAE employment wages are not subject to personal income tax. This does not determine an employee’s tax obligations in another country or the treatment of business income. See Dubai salary tax.
Do I pay pension for expatriate employees in the UAE?
Non-GCC foreign employees generally do not contribute to a UAE pension fund. GCC nationals may require contributions under their home-country insurance-extension rules. Eligible foreign employees may have federal gratuity or an approved savings arrangement; DIFC and ADGM have separate regimes. Confirm the person’s actual coverage before budgeting.
How is end-of-service gratuity calculated?
For an eligible foreign full-time employee under the federal regime, it is 21 days’ basic wage per year for the first five years and 30 days per later year, after at least one continuous year of service, subject to the two-year wage cap. Exclude unpaid absence and check any applicable alternative scheme or different work pattern. A monthly provision is not a complete final-settlement calculation.
Is there a minimum wage in the UAE?
There is no general federal minimum wage for non-Emirati employees. For Emiratis in MOHRE-covered private-sector employment, the minimum is AED 6,000 monthly from 1 January 2026; existing salaries had to be adjusted by 30 June 2026. Confirm the establishment’s coverage and contractual requirements.
Can I pay a UAE employee in dollars?
The federal law permits wages in AED or another currency agreed in the employment contract. Covered employers must still use the applicable authorised wage-payment route and comply with WPS requirements. Client funding currency and employee payment currency are separate matters; agree the exchange rate, charges and settlement method in advance.
Want the numbers for your own hire?
Send us the role, the salary and the emirate, and we will reply with a line-by-line annual estimate.
Related
How NNRoad employs and pays your UAE hire.
Seven steps for foreign companies.
Official sources: Abu Dhabi Pension Fund, employer guide; ADGM employment regulations; UAE Government, employment contracts; UAE Government, payment of wages and WPS; UAE Government, end-of-service benefits; UAE Government, pensions for UAE nationals; GPSSA, Federal Law No. 57 of 2023; MOHRE, minimum wage for Emiratis; UAE Government, types of leave; UAE Government, working hours; MOHRE, health insurance scheme; ILOE unemployment insurance scheme. Also: Federal Decree-Law No. 33 of 2021 on the regulation of labour relations and Cabinet Resolution No. 1 of 2022, Ministerial Resolution No. 340 of 2026 on the Wage Protection System, and Federal Decree-Law No. 57 of 2023 on pensions. DIFC and ADGM have their own employment laws. Reviewed November 2026; general information, not legal or tax advice.