Overview

Capital
Abu Dhabi
Currency
UAE Dirham (AED)
Date Format
dd/mm/yyyy

Taxes

Employer

Employer Payroll Tax

12.50%
Social Security (contributions are for Emiratis only, no contributions for expats)
12.50% Total Employment Cost
Employee

Employee Payroll Taxes

5.00%
Social Security (contributions are for Emiratis only, no contributions for expats)
5.00% Total Employee Cost
Employee

Employee Income Tax

No personal income tax
Employer Taxes
3 HIGHEST
3 LOWEST
China
Brazil
Belarus
United Arab Emirates
South Africa
Georgia
Macedonia
41.12%
36.8%
34%
12.5%
2%
2%
0%
Employee taxes
3 HIGHEST
3 LOWEST
Romania
Macedonia
Netherlands
United Arab Emirates
Georgia
Belarus
Ukraine
45%
28%
27.65%
5%
2%
1%
0%

Minimum Wage

General

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
Minimum wage (per month)
$4000
$2663
$2491
$1361
$36.80
$22
$2.33
Geneva
Luxembourg
Australia
United Arab Emirates
Angola
Uzbekistan
Venezuela
3 HIGHEST
3 LOWEST

Payroll

Payroll Cycle

If an employee receives an annual or monthly salary, the payroll cycle is monthly with payments paid no later than the 10th 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.

13th Salary

Not required.

Working Hours

General

The workweek 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 are reduced by 2 daily.

 

 

Overtime

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

Leave

Paid Time Off

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

Vacation days
Public holidays
3 HIGHEST
3 LOWEST
Brazil
Peru
Georgia
United Arab Emirates
Malaysia
China
Federal
30
13
43
30
12
42
24
17
41
30
7
37
8
6
14
5
7
12
10
10
Public Holidays

7 holidays totaling 14 days.

Sick Days

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 46th day, sick leave is not paid.    

Within the first 2 days of the sickness, the employee must give notice to their employer and produce a medical certificate from a doctor.

Maternity Leave

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 are 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.

PAID MATERNITY LEAVE (DAYS)
410
365
365
45
45
30
0
Bulgaria
Serbia
Albania
United Arab Emirates
United Arab Emirates
Tunisia
Federal
3 HIGHEST
3 LOWEST
Paternity Leave

Paternity leave falls under parental leave.

Parental Leave

For private-sector employees, both parents are entitled to 5 days’ paid leave.  The leave can be taken until the child reaches the age of 6 months.

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

Termination

Termination Process

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

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

Notice Period

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.

Severance Pay

The amount of severance pay is determined by the length of employment:  

  • 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 a total of 2 years’ salary.   

If the reason for termination is not recognized by UAE law, the employee may be entitled to additional compensation totaling 3 months’ pay. 

Probation Period

The probation period can last a max of 6 months.

VAT

General

The standard rate is 5%.

Version History

September 2, 2020
Updates on paternity and parental leave as the law has changed.

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