Employer of Record in the UAE

There’s no personal income tax and no payroll tax for expats, so the main employer cost is end-of-service gratuity — 21 days of basic salary per year for the first five years, 30 days after, capped at two years’ remuneration — plus visa and medical costs and mandatory health insurance. For Emirati staff, GPSSA pension applies instead at 15% employer, now the full rate since the Nafis reimbursement ended in September 2026. We quote the exact all-in figure, gratuity accrual included, before you commit.

Yes — or an EOR. Employment, residence visas and work permits can only be issued through a licensed local presence, either a mainland MOHRE company or a free-zone entity. A foreign company with no UAE presence can’t sponsor or pay staff itself. As a licensed employer of record, TopSource sponsors the visa and employs the person on your behalf, so you don’t need your own entity.

End-of-service gratuity is the UAE’s statutory severance for expat employees, since there is no expat state pension. It accrues at 21 days of basic salary per year for the first five years and 30 days per year after, on the final basic salary with allowances excluded, capped at two years’ total remuneration. Since Federal Decree-Law No. 33 of 2021, resignation no longer reduces it. All final dues must be paid within 14 days of the contract ending. Employers may also fund it through the voluntary savings scheme introduced in 2023, at 5.83% of basic below five years’ service and 8.33% after. We accrue it monthly so it’s always funded.

The Wage Protection System requires all private-sector salaries to be paid through MOHRE-registered channels, and it covers over 99% of workers. Ministerial Resolution No. 340 of 2026 changed the timetable on 1 June 2026: the 15-day grace period is gone and wages are due on the first day of each month, with an establishment compliant if at least 85% of total wages clear by then. Penalties escalate from a warning on day 2 to suspension of new work permits on day 5, fines from day 11 and travel bans from day 21 — so late payroll closes your hiring pipeline, not just your books. We run fully WPS-compliant payroll.

There’s no personal income tax on salaries for anyone, expat or national, and no VAT on employment income. There’s no general private-sector minimum wage for expatriates either, though a AED 6,000 a month total-wage floor applies to Emirati hires — to new and renewed permits from January 2026, and since July 2026 an Emirati paid below it no longer counts toward your Emiratisation quota. This makes the UAE one of the most tax-friendly places to earn, and gross-to-net payroll is simple. We handle it either way.

EOR wins on speed and on sponsorship: because we’re already the licensed local presence, we can visa and payroll your hire in days without you setting up anything. Your own entity wins on scale once UAE headcount and permanence justify the licence, office and ongoing compliance — including Emiratisation, which starts to bite at 20 staff in some sectors. Many clients run both in sequence — EOR to enter, entity once proven — and we transfer the team when the time comes.

Following the UAE’s 2022 labor law reforms, all new contracts must be limited-term, and notice periods are generally 30 to 90 days as specified in the contract, with unlawful termination giving rise to compensation claims. End-of-service gratuity remains payable on top of any notice arrangements, and getting the gratuity calculation right is one of the most common points of dispute at offboarding.

Health insurance is mandatory in most Emirates (Dubai and Abu Dhabi have their own specific requirements), and beyond that baseline, competitive UAE employers typically add an annual flight allowance home, housing or transport allowances, and schooling allowances for employees relocating with families, since a large share of the UAE workforce is composed of expatriates.

For candidates who need a new UAE work visa, onboarding typically takes two to four weeks to cover medical testing, Emirates ID, and labor card processing, versus the additional time needed to first set up a free zone or mainland entity capable of sponsoring visas if you don’t already have one. An EOR with existing sponsorship capacity is usually the faster route for a first UAE hire.