United Arab Emirates Payroll and Benefits Benchmark guide

For expatriates, there is no mandatory minimum wage. 

For UAE nationals, minimum wage is determined by level of education:

• No high school certificate- 3,000 AED
• High school certificate- 4,000 AED
• College degree or higher- 5,000 AED

If an employee has fulfilled at least one year of employment, they are entitled to 30 days of paid leave a year.

After 3 months of employment starting from the end of the probation period, an employee is entitled to 90 days of sick leave.

The first 45 days of sick leave are paid as follows:

• First 15 days of illness- leave is paid at 100% of the regular salary
• 15-30 days of illness- paid at 50% of the regular salary

From the 46^th day, the sick leave is not paid.   

A woman is entitled to 45 days of fully paid maternity leave if they have completed at least 1 year of employment. 

For women who work under the DIFC employment law, maternity leave is 65 days if the woman has worked for at least 1 year.  The first 33 days is paid at a rate of 100% of the normal pay and the remaining 32 days is paid at the rate of 50% of the regular pay.   

There is no statutory entitlement in the UAE. 

Under the DIFC, Pregnant employees are entitled to paid leave for prenatal care. 

The work week in the UAE is from Sunday to Thursday with full time employment considered 48 hours weekly and 8 hours daily.

For businesses, hotels and cafes employees, the workday is 9 hours. 

During Ramadan, working hours is reduced by 2 daily.

Overtime pay is paid at a rate of 125% of the regular pay, however, for overtime hours worked between 9pm and 4am, overtime is calculated at 150% of the regular pay. 

For work on Fridays, the employee is entitled to an additional paid day off and overtime pay at the rate of 150% of the regular pay.

The standard rate is 5%.

Total pension fund contribution is 26%, with 6% contribution from the government. Employer are required to contribute 15% of employees wages to their pension fund. Employees are required to contribute 5% of their wages to their pension fund.

• Employer contributions- 12.50% of the employee’s monthly salary and housing allowance if the employer is a private entity. If the employer is a government body, the contribution is 15%.
• Employee contributions- 5% of the monthly salary and housing allowance

The minimum salary that is subject to social security contributions is 1,000 AED and the maximum is 50,000 AED.

For expatriates, social security is not available and therefore, no contributions need to be made. 

For UAE nationals, healthcare is low-cost. For expatriates, in order to gain access to health services, one must pay a fee and have a health card.

If an employee receives an annual or monthly salary, the payroll cycle is monthly with payments paid no later than the 10^th of the following month on a working day. If the pay date is not written in the employment contract, the payroll cycle is every 14 days. 

The termination of an employment agreement must be given in writing. 

For expatriates, the final payment is made when the employment visa is cancelled.  In addition, the employer is obligated to notify the authorities when an employee leaves the UAE. 

A minimum of 30 days of advance notice is required by law. The employer can choose to give pay in lieu of notice if they so choose. 

Under the DIFC employment law, notice period depends on the length of service:

• 1-5 months of employment- 1 weeks’ notice
• Up to 5 years or employment- 30 days’ notice
• 5+ years of employment- 90 days’ notice

DIFC also allows for pay in lieu of notice. 

Workers are entitled to 21 days pay for every year up to 5, and 30 days for each additional year.

• 1-5 years of employment – the employee is entitled to 21 days of wages for each year employed
• 30 days of wages for each additional year after 5 years of service.

The total amount of severance cannot be more than the total of 2 years’ salary.