What you'll learn
United Arab Emirates (UAE) is a country in the Middle East region bordered by Oman and Saudi Arabia. Dubai is the country’s most populous city and is considered a major international hub with many digital nomads choosing to work in Dubai.
Ever since oil was discovered in the area in 1958, the country has had rapid growth in infrastructure, healthcare, and technology, and a tourism industry that sees over 20 million tourists visiting Dubai and Abu Dhabi.
Employment Terms
Types of Contracts
Only fixed term contracts are available in UAE - with a maximum duration of 5 years.
Job Title Restrictions
No “C-level” titles (CEO, CFO etc.)
Working Hours
The maximum amount of working hours is 8 hours per day, 48 hours per week. Work hours are reduced to 6 hours per day during Ramadan. If an employee works beyond the maximum of 48 hours, they will be paid overtime as follows:
- Normal work hours: Basic salary plus an additional 25%
- Off days and Public Holidays: Basic salary plus an additional 50%
Minimum Wage
There is no minimum salary stipulated in the UAE Labour Law, but salaries must cover the basic needs of the employees. The average is around AED 5,000 per month.
Wage Deductions
Employers cannot deduct any fees associated with relocation (visa/repatriation expenses, etc). Any deductions due to employee misconduct should not exceed 5 days’ wages.
Probation Period
Probation can be a maximum of 6 months. The typical probation period lasts 3 months. During probation, notice for both the employer and employee is 14 days, unless specified.
Taxes & Local Employment Costs
Employee Taxes
There are no taxes applicable to the employee's salary.
However, employees are required to sign up for Unemployment Insurance (approximately 60 AED). They must organize and pay for this fee directly through a government portal.
Employer Taxes & Contributions
There are no taxes applicable for the employer to contribute to.
However, employers must provide mandatory medical insurance; costs for these vary according to the plan chosen and the employee’s age and gender.
Types of Leave
Annual Leave
Employees are entitled to 30 days of leave (minimum 22 working days). The employee is entitled to this once they have completed probation (though this is at the discretion of the employer and 99% of the time employees take annual leave during this time).
At the end of the year, unused leave can be paid out in salary. Alternatively, 5 days of annual leave can be carried over to the next calendar year, but needs to be used before March 31st. By mutual agreement, more days can be rolled over, though the government will only guarantee 5 days.
Sick Leave
Employees are entitled to 15 days of sick leave with full pay, 30 days with half pay, and 45 days unpaid.
Maternity Leave
Female employees are entitled to 45 days of paid maternity leave and 15 days with half pay.
Paternity Leave
New fathers in the UAE are entitled to five working days of paternity leave with full pay, which they can choose to take consecutively or at any time during the first six months after the birth of the child.
Public Holidays
There are 13 public holidays in 2023 (some days are dependent on the moon). If an employee needs to work on a holiday, they should be paid 1.5X their hourly rate.
See this list for public holidays in UAE.
Benefits
Companies typically provide the following benefits in UAE:
- Life Insurance
- Education allowance (families)
- Food Allowance
- Expat Air Fare (for expats)
Medical Insurance
As the employer, it is mandatory to provide medical insurance in the UAE. Medical insurance costs vary according to the plan chosen and the employee’s age and gender.
Termination Process
Notice Period
The minimum notice period after probation is 30 days which can be extended up to 3 months. Extensions are typically given to employees in senior level roles.
Payment in lieu of notice is possible. During probation, the notice is 14 days.
Statutory Payments
Gratuity: A mandatory gratuity must be paid to employees when they are offboarded, if they have been employed for 12 months or longer.
The gratuity amount varies according to the years of service:
- 1-5 years: 21 days basic salary per year
- 5+ years: 30 days basic salary per year
Severance: If an employee is terminated unlawfully, they may raise a case and be entitled to 3 months' salary by the courts.
Leave: Any unused leave should be paid out to the employee in their final salary.
Additional Information
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