The United Arab Emirates has a population of over 9 million people, with the top industries including oil, agriculture, and tourism. Payroll and compliance requirements can be complex with many regulations for starting a business and hiring employees.
Payroll and Tax Considerations:
- No minimum wage is mandated, but UAE nationals must be paid according to certain requirements based on type of work and education level
- The entry level salary must be at least AED 12,000 per month for employees with a college degree. For those with a high school education pay must be AED 5,000
- Overtime is limited to 2 hours per day, and is paid at 125% of regular hourly pay. For night work overtime pay is 150% of regular hourly pay
- Severance is paid if the employee has 1 year of service. The pay varies depending on the length of service and reason for termination
- There is no income tax on individuals
HR and Statutory Requirements
- Employees who have worked over 6 months but less than a year, earn 2 days of leave per month
- For employees with more than 1 year of service, the annual leave is 30 days
- Employees have a right to 90 days of annual sick leave after 3 months of employment
- Permanent position employees receive 90 days of paid maternity leave
- Fathers receive 5 days of paid paternity leave, to be taken within 6 months of the birth
- Foreign workers must be approved by the Ministry of Labor, once determined that the job cannot be filled by a UAE national
Holidays in United Arab Emirates
- January 1 – New Year’s Day
- May 3 – Eid al-Fitr
- May 4 – Eid al-Fitr Holiday
- May 5 – Eid al-Fitr Holiday
- July 9 – Arafat (Hajj) Day
- July 10 – Eid al-Adha (Feast of Sacrifice)
- July 11 – Eid al-Adha Holiday
- July 12 – Eid al-Adha Holiday
- July 30 – Al-Hijra (Islamic New Year)
- October 8 – Mouloud
- December 1 – Commemoration Day
- December 2 – National Day
There are no statutory taxes in the UAE, and no year-end reporting is required. Funding payroll in the UAE is not as flexible, as companies must have a local bank account in order to pay employees. Funds for processing payroll must come from a bank account in the UAE. Our in-country experts can assist with the requirements needed for bank account set up.
Blue Marble has created a cloud-based platform to manage employee payroll in 150+ countries. View payroll in real time with customized, aggregated reporting across all countries and currencies. Our unique hybrid service model gives you a dedicated US-based team and direct access to in-country experts to help when questions come up. Simplify payroll and compliance in the UAE – click here to learn more