Country Payroll Guide United Arab Emirates

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Abu Dhabi United Arab Emirates image

Key Facts

Capital
Abu Dhabi
Date format
dd/mm/yyyy
Currency
UAE Dirham (AED)
VAT
the standard rate is 5%

Contributions

Employers

Social Security
Social Security - 12.5%
Total Employment Cost
Total Employment Cost - 12.5%

Employees

Social Security
Social Security - 5%
Total Employee Cost
Total Employee Cost - 5%

Minimum Wage

Minimum Wage
The minimum wage in United Arab Emirates is 3000 AED per month.

Payroll

Payroll Cycle
Monthly
13th Salary

Not mandatory.

Working Hours

General Working Hours

48 hours per week.

Overtime

An overtime is considered if the nature of job demands working beyond normal working hours and it will entitle the employee for a pay equal to normal working hours’ remuneration plus 25 per cent of that pay. It could increase to 50 per cent if overtime is done between 9 pm and 4 am.

Leave

Paid Time Off

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

Public Holidays

9 public holidays.

Sick Days

After three months probation, an employee is entitled to 90 days of sick leave.

  • Full pay for the first 15 days
  • Half pay for the next 30 days
  • No pay for the remaining 45 days

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.

Paternity Leave

Private-sector employees are entitled to five days’ paid leave.

Parental Leave

Private-sector employees are entitled to five 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

If the employee resigns of his or her own free will before completing one year, then they will not be entitled to any gratuity pay. The worker is entitled to a gratuity for the served fraction of a year, provided that they complete one year of continuous service.

The end of service gratuity is calculated on basis of last wage which the employee was entitled to, namely the basic salary. Hence, it will not include allowances such as housing, conveyance, utilities, furniture etc.

If the employee owes any money to the employer, the employer may deduct the amount from the employee’s gratuity.

Probation Period

Maximum of six months.

Visa

Employment Visa

In order to apply for a work permit in the UAE, the candidate must have a work contract and the employer handles the application process through the Ministry of Human Resources and Emiratisation (MoHRE).

The initial work permit is issued for a period of two months and allows the employee to enter the UAE. During that period, the employer must collect all the necessary materials, including registering the employee as a resident, and file for a work residency permit.

After employees have secured a work permit, they can apply for a new one on their own if their job is terminated or if they want to change employers. However, they must always have an employer as a sponsor to remain in the country. An unskilled worker has to wait six months before changing jobs. The six month period is waived for skilled workers.