Employer of Record (EOR) UAE: Hire, Manage, and Pay Talent Seamlessly

Tarmack is an Employer of Record UAE and a global PEO, helping companies hire, onboard, pay, and manage employees and contractors without setting up a local entity. As the legal employer in the UAE, Tarmack ensures full compliance with local labour and payroll laws.

Employer of Record Services in the UAE

Hiring in the UAE doesn’t require employers to set up a local entity or deal with complex labour laws on their own. Tarmack’s Employer of record services UAE allows foreign employers to hire and manage employees and contractors in the UAE quickly and compliantly.

Comprehensive EOR UAE Solutions for Seamless Global Hiring

1. Global Hiring and Onboarding

Build your UAE team without legal or administrative hurdles. Tarmack, as a UAE EOR, handles hiring and onboarding in line with UAE labour regulations.

Hire employees and contractors in the UAE without a local entity
UAE-specific onboarding processes
Legally compliant employment contracts and documentation

2. Payroll Management

Run payroll in the UAE without worrying about local rules or timelines. Tarmack, as a PEO UAE, takes care of:

Payroll processing in AED with statutory deductions
Compliance with UAE wage and tax requirements
Clear and accurate payroll reports

3. Compliance Assurance

UAE labour laws change, and enforcement is strict. Tarmack, as an Employer of record United Arab Emirates, keeps companies compliant at every step.

Compliance with UAE Labour Law
Lower risk of worker misclassification
Proper, audit-ready employment records

4. Benefits Administration

Provide mandatory and competitive benefits without added effort with EOR UAE.

Health insurance and statutory benefits managed
Benefits aligned with UAE regulations
Payroll and HR processes handled in one place

With Tarmack as the legal employer and EOR United Arab Emirates, you can focus on growing your business in the UAE while we manage employment, payroll, and compliance.

Expand into the UAE without forming a local company. Tarmack handles employment, payroll, and compliance for employers as an UAE Employer of Record. Request Demo.

Benefits of Employer of Record (EOR) in the UAE

Fast UAE Expansion: Foreign companies can hire employees or contractors in the UAE without setting up a local entity. Tarmack, as an employer of record Dubai & the UAE, takes care of all the local rules and paperwork, so entering the market is simple.
Cost-Effective Hiring: Skip incorporation costs, legal fees, and admin work. Companies only pay for the people they actually hire.
Flexible Workforce: Grow or shrink your UAE team as needed. Whether expanding quickly or reorganizing, Tarmack keeps everything running smoothly.
Compliance Made Simple: Tarmack, as an EOR UAE, handles UAE labor laws, contracts, statutory requirements, and visas. From onboarding to terminations, foreign employers stay fully compliant.
Payroll and Benefits Made Easy: Payroll, benefits, and local perks are fully managed. Employees are paid on time and in line with UAE rules.

Expand your business in the UAE without setting up an entity. As your Employer of Record UAE, Tarmack manages employment, payroll, and compliance while you focus on growth. Contact Us..

Employer of Record UAE Pricing Structure

1. Employee Services

EOR — from $199/employee/month
Hire full-time employees in the UAE without setting up an entity. Includes UAE-compliant payroll, legal contracts, statutory benefits, HR support, and IP protection, with Tarmack as the legal employer and PEO UAE.
Recruiting — from 10% of annual salary
End-to-end hiring support in the UAE, from sourcing to interviews and local guidance.
Payroll — from $15/employee per cycle
Payroll in AED with compliant processing, allowances, and reporting.
Enterprise — custom pricing
For teams of 10+, with flexible pricing and UAE market support.

2. Contractor Services

Contractor Recruiting — from 10% of annual salary
Find and hire UAE contractors quickly with compliance support.
Contractor Management — from $39/contractor/month
Compliant contracts, fast payouts, invoicing, expense tracking, IP protection, and contractor-to-employee conversion.

3. Corporate & Regulatory Services

Company Formation — contact for pricing
Fast and guided UAE entity setup.
Immigration — from $999 per visa<br/> UAE employment visas and work permits with sponsorship support.
HR Software — from $2/employee/month
HR platform for payroll, attendance, and reporting, UAE-ready.

Hire in the UAE with transparent EOR pricing you can rely on. Tarmack, as an Employer of record company UAE, manages payroll, employment, and compliance end-to-end. Learn More.

Employment Norms in the United Arab Emirates

The United Arab Emirates is a middle-eastern country with plenty of work opportunities for its citizens and foreign nationals. With its high GDP and excellent infrastructure, it attracts global talent.

While it is a great destination to expand your business, UAE has various norms and regulations. EOR services help new employers manage employee payrolls, taxes, etc. and ensure legal compliance.

General Information:

The currency of the UAE is UAE Dirham (AED).
Abu Dhabi is the capital of the UAE.
Arabic is the official language of the UAE. Documentation can be in Arabic. In addition to this, it can be translated into English and nine other recognized languages in UAE.
As of 2021, the GDP of the UAE was reported to be USD 415.72 billion.

The 'UAE Labor Law sets and executes all labor-related norms. These apply to all UAE nationals as well as expatriates. However, for some special categories, different regulations may apply.

Select Section

Employment Contracts
Employee Onboarding
Visa
Work Permits
Minimum Wage
Payroll Cycle
Annual Bonus
Health Benefits
Working Hours and Overtime
Leaves
Social Security Contributions
Personal Income Tax
Payroll Compliance
Top Skills in Demand
Probation
Termination
Severance Pay
Employees vs Contractors
Global PEO
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Frequently Asked Questions

Employment Contracts Employee Onboarding Visa Work Permits Minimum Wage Payroll Cycle Annual Bonus Health Benefits Working Hours and Overtime Leaves Social Security Contributions Personal Income Tax Payroll Compliance Top Skills in Demand Probation Termination Severance Pay Employees vs Contractors Global PEO Start Hiring Frequently Asked Questions

Employment Contracts in UAE

An employment contract is the legal backbone of employing staff in the UAE. Under the current labour law, employers must issue a written, fixed-term contract and register it with the Ministry of Human Resources and Emiratisation (MOHRE) or the relevant free zone authority for it to be legally enforceable.

A properly drafted contract protects employers by clearly setting out terms, pay, responsibilities, and exit conditions, while ensuring compliance with UAE employment regulations.

A. Types of Employment Contracts in the UAE

1. Fixed-Term Contracts

The only valid contract type for new hires in the UAE private sector is a fixed-term contract. These contracts:

Must specify a start and end date (up to 3 years).
Can be renewed by mutual agreement.
Must be registered with MOHRE promptly after signing.
Are required for all visa and labour card processing.

As of 2025, all contracts must be issued through MOHRE’s standardized digital system or the relevant free zone authority portal. Contracts must be issued in two copies, one for the employer and one for the employee.

2. Legacy Unlimited Contracts (Phased Out)

Unlimited contracts no longer apply to new private-sector hires. Employers have already been required to transition older unlimited contracts to fixed term.

B. Specialized Work Arrangements

The law recognises different work models under fixed-term structures, such as:

Part-time work
Temporary or project work
Flexible hours
Remote work arrangements
Job sharing

C. What Must Be Included in a UAE Employment Contract?

Contracts must include essential details such as:

Job title and responsibilities
Remuneration
Working hours
Leave entitlements
Probationary period
Notice Period
Termination conditions

Contracts are typically written in Arabic. An English version may be attached, but the Arabic version prevails in legal interpretation.

D. Registration & Contract Compliance

MOHRE Contract Registration: All contracts must be registered with MOHRE within the legal timeframe (often within 14 days of hire or visa issuance). This makes the contract enforceable and is essential for visa processing.

Contract Verification & Status Check: Foreign employers and employees can check contract status through the official MOHRE website or mobile app by logging in with UAE Pass and verifying the registered contract record online.

Probation Period: Employers may include a probation period of up to six months. During probation:

The employer must give at least 14 days’ notice to terminate.
The employee must also give 14 days’ notice if leaving the UAE, or 30 days’ notice if joining another UAE employer.
The probation period counts toward total service for benefits.
Any probation must be explicitly stated in the contract.

E. Termination, Notice & End-of-Service Benefits

Notice Period Requirements: Once the probation period is over, contracts must clearly state the notice period required by either party before termination, usually:

30 days for most employees
Could extend to 60–90 days, depending on seniority or contract terms

Termination Procedures: Termination must follow the contract and law. Employers and employees must give written notice and respect contract conditions.

End-of-Service Benefits (EOSB): Employees who complete at least one year of service are entitled to end-of-service benefits, calculated on basic salary under standard UAE law practices:

21 days’ basic salary for each of the first 5 years
30 days’ basic salary for each additional year
The total gratuity should not exceed two years’ wages.

Final settlements must include all wages, gratuity, unused leave, and any agreed return tickets or contractual benefits.

F. Exceptions & Special Employment Frameworks

Free Zone Employment: Some free zones (e.g., DIFC, ADGM) use their own legal frameworks and contract templates. Employers must ensure they use the correct form for each jurisdiction.

Exempt Entities: Government employees and specific regulated sectors may follow separate rules outside the Federal Labour Law. Always check relevant authority regulations for exemptions.

G. Common UAE Employment Contract Risks

Foreign employers should avoid:

Failing to register contracts with MOHRE as unregistered contracts may not be enforceable
Vague terms around probation, notice, or gratuity
Not matching contract terms with payroll records or visa documentation
Including terms that conflict with the UAE statutory minimums

A compliant employment contract protects foreign employers and internationally mobile workers alike. It ensures clear expectations, legal recourse in disputes, and compliance with local employment standards, which is essential in a world-class labour market like the UAE.

Hire employees in the UAE with ease. Tarmack, as an Employer of Record Abu Dhabi and the UAE, manages compliant employment through its Employer of Record services. Get In Touch.

UAE Employee Onboarding & Compliance Process

For employers hiring in the UAE, onboarding is a regulated, step-by-step process that goes beyond basic HR formalities. Each stage, from issuing the offer letter to payroll activation, must align with MOHRE, visa, and statutory compliance requirements to avoid penalties and delays.

1. MOHRE Offer Letter and Contract Registration

Before onboarding, employers must issue a MOHRE-compliant job offer, digitally signed where required. Once accepted, it leads to contract registration with MOHRE or the relevant free zone authority, and employees may start work only after official approval.

2. Visa, Medical Test, and Emirates ID

For expatriate employees, the employer applies for a work permit through MOHRE (mainland) or the applicable free zone portal. Entry permits and employment visas are processed in coordination with the General Directorate of Residency and Foreigners Affairs (GDRFA).

As part of this process, employees must complete a UAE-approved medical fitness test and biometric verification. Once approved, an Emirates ID application is submitted. The Emirates ID serves as the employee’s primary legal identity document in the UAE.

3. Payroll and Statutory Setup

After the Emirates ID and labour card are issued, the employee must be registered under the Wages Protection System (WPS). Salaries, leave accruals, and statutory benefits must be administered through compliant payroll systems.

As of January 1, 2025, all private-sector employees and domestic workers in the UAE must have valid health insurance before their residency visa is issued or renewed. Employers are responsible for purchasing approved coverage, which must remain active throughout employment. Non-compliance can lead to fines or visa delays. This requirement applies across all emirates, not just Dubai and Abu Dhabi.

4. Ongoing Compliance and Record Management

Employers are required to maintain accurate employment records and track the validity of visas, passports, and Emirates IDs to ensure timely renewals. Where applicable, companies must also meet Emiratisation requirements and report workforce data through the Nafis portal.

5. Orientation and Operational Onboarding

Once legal formalities are complete, standard HR onboarding begins. This includes orientation on company policies, reporting structures, and role expectations, along with any role-specific training required.

Documents Required for Onboarding In The UAE

To avoid delays, employees must provide a valid passport, photographs, a visa or entry permit (if issued), educational certificates where required, medical fitness results, and Emirates ID application details. Incomplete documentation can delay visa approval and payroll activation.

From onboarding to payroll, Tarmack supports UAE hiring as a trusted Employer of Record company UAE for foreign employers. Learn More.

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Visa in UAE

UAE Green visa: This is applicable for freelancers or skilled employees. The applicants can sponsor themselves for up to 5 years. Applicants must hold a -

valid employment contract/ freelance or self-employment permit from the Ministry of Human Resources and Emiratisationthe
bachelor's degree or specialized diploma
salary of AED 15,000 or more (for employees)

Standard work visa: This is valid for up to 2 years for employees in the private or government sector or free zone. The employer must apply for the standard residence visa.

Golden visa: This is a long-term renewable visa for 5 to 10 years. It is typically for high-income individuals such as investors, entrepreneurs, executive directors, specialized talents (scientists, inventors, etc.), outstanding students, etc.

Work Permits In The UAE - What Foreign Employers Must Know?

When hiring in the UAE, a work permit is compulsory before anyone can begin employment. Under UAE Labour Law, no expatriate or resident can legally work without a valid work permit issued by the MOHRE. Working without one exposes both employer and employee to penalties.

Work permits are regulated under the UAE Labour Law and federal immigration regulations.

Who Issues UAE Work Permits

Mainland UAE: Ministry of Human Resources and Emiratisation (MOHRE)
Free Zones: The respective Free Zone authority
Immigration: Handled at the federal or emirate level, depending on location

Who Requires a Work Permit

All foreign nationals performing work in the UAE
This applies whether the individual is:
- Outside the UAE at the time of hiring, or
- Already inside the UAE under an eligible visa

Types of Work Permits in the UAE

1. Employer-Sponsored Work and Residence Permit

This is the main and most common work permit type in the UAE.

The employer sponsors both the work permit and the residence permit
Employment is fully governed by the UAE Labour Law
Salary, payroll, benefits, and termination must follow UAE regulations
Applicable to Mainland and Free Zone companies

2. Remote Working Visa

The UAE Remote Working Visa allows individuals to live in the UAE while working for a company based outside the UAE.

Key features:

Valid for one year and renewable
No UAE employment contract
No UAE payroll or local work permitted
Minimum income requirement of USD 3,500 per month
Dependents can be sponsored

This option does not allow employment with a UAE entity and is not suitable for hiring staff to work for UAE-based operations.

3. Other Work Permit Types

The UAE also issues additional permits for specific situations, including:

Temporary or project-based work permits
Part-time work permits
Transfer permits for employees changing employers
Permits for family-sponsored residents or Golden Visa holders

These are issued based on role type, duration, and residency status.

Mainland vs Free Zone Issuance

Mainland UAE: Work permits are issued through MOHRE, and Emiratisation rules may apply.
Free Zones: Work permits are issued by the respective Free Zone authority, with no current Emiratisation requirements.

Hiring without the correct work permit can result in fines and labour file suspension, visa cancellations, inability to process payroll or benefits, and legal exposure under UAE Labour Law for employers.

How Foreign Employers Can Hire Employees in the UAE?

Foreign employers outside the UAE cannot hire employees directly unless they follow one of the legally recognised hiring structures. UAE employment law requires a local legal presence or approved sponsorship arrangement for hiring.

Step 1: Selecting a Legal Hiring Structure

To employ staff in the UAE, foreign employers must hire through one of the following routes:

Establish a UAE entity (Mainland or Free Zone)
Use a licensed local employment sponsor or partner
Engage a compliant third-party employment arrangement

Without a UAE-registered sponsor or entity, direct employment is not permitted.

Step 2: Issue a UAE-Compliant Employment Contract

Once the hiring structure is in place:

A formal job offer is issued
A written employment contract is prepared in line with the UAE Labour Law
The contract must clearly state the role, salary, working hours, probation, leave, and notice terms
The contract must be registered with the relevant authority

Contract registration is mandatory before proceeding further.

Step 3: Secure the Required Work Authorisation

Before an employee can legally start work, the required work authorisation must be approved by the appropriate authority. This applies to hires coming from abroad as well as candidates already in the UAE. No work can begin until this approval is in place.

Step 4: Complete Mandatory Onboarding Formalities

After approval, the employee completes the remaining formal steps, which include immigration clearance, medical fitness testing, Emirates ID registration, and residence visa issuance. Only once these steps are complete can employment officially begin.

Ongoing Employer Obligations

After hiring, employers must comply with ongoing UAE obligations, including:

Salary payments in AED
Wage Protection System (WPS) compliance, where applicable
Statutory leave entitlements
End-of-service gratuity calculations
Mandatory health insurance, depending on the emirate

Failure to comply can result in fines, permit suspension, or legal penalties.

Hiring Contractors in the UAE

Independent contractors must hold a valid freelance permit or business licence.

Roles involving control, fixed hours, or long-term dependency may be treated as employment under UAE law, regardless of contract wording.

Tarmack, as an UAE Employer of Record, manages UAE work permits, visas, and labour compliance so employers can hire without administrative burden. Request Demo.

Minimum Wage in UAE

There is no mandatory minimum wage in UAE.

Payroll Cycle in UAE

Generally, the payroll cycle is monthly. In UAE, the payment is usually made on the last working day of the month.

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Annual Bonus in UAE

The administrative regulation determines the annual bonus. This is stipulated in the contracts or agreements.

Health Benefits in UAE

Full medical coverage is provided to all UAE nationals under the respective emirates.
For resident expatriates, the employer must provide health insurance to the employees. In some emirates, the employer should also cover the employee's family.

Working Hours and Overtime in UAE

Work hours: A typical work day is of 8 hours. The work week may be four and a half or five (Monday to Friday) days with a maximum of 48 hours per week. The work hours are flexible (remote or on-site) and can be set according to company policies.
Break: One or more breaks of at least one hour per 5 consecutive hours of work must be given. Break time is not considered during working hours.
Overtime: An overtime of 150% of the daily wage must be given for night and 125% for day-time work. This doesn't apply to shift-based work. Employees working on a day off must be given 150% of overtime pay.

Leaves in UAE

Sick Leaves

Sick leave cannot be for more than 90 days. Employees are entitled to receive -

The full wage for the first 15 days
The half wage for the next 30 days
Unpaid leave for the next 45 days

Parental leaves

Maternity leave: Female employees can avail of 45 days of paid leave. Employers pay 100% salary to their employees, during this tenure. Employees who have not yet completed a year with the employer receive half the benefits of maternity leave.
For employees who have been working for less than one year, the paid leave is halved.
Parental leave of 5 days (for both parents) can be taken within six months of the child's birth.

Annual leaves

Annual leave is calculated as two days per month worked for at least six months of work. A 30-day annual leave is granted for those working for one year or more.
Part-time employees are granted annual leave based on the employment contract.

Other leaves

Hajj leaves: Employees in UAE are entitled to up to 30 days of unpaid Hajj leave. This leave can be taken only once during employment in that company.
Umrah leaves: There is no provision for Umrah leave in the labor laws of the UAE.

Public Holidays (for the Calendar year 2024)

Dates may change as per traditional calendars or official changes.

January 1 - New Year's Day
April 10 - Eid al-Fitr
April 11 - Eid al-Fitr Holiday
April 12 - Eid al-Fitr Holiday
April 13 - Eid al-Fitr Holiday
June 15 - Arafat Day
June 16 - Eid al-Adha
June 17 - Eid al-Adha Holiday
June 18 - Eid al-Adha Holiday
July 7 - Islamic New Year
September 17 - Prophet Muhammad's Birthday
December 1 - Commemoration Day
December 2 - National Day
December 3 - National Day Holiday

Public Holidays (for the Calendar year 2025)

Dates may change as per traditional calendars or official changes.

January 1 - New Year's Day
March 31 - Eid al-Fitr
April 1 - Eid al-Fitr Holiday
April 2 - Eid al-Fitr Holiday
April 3 - Eid al-Fitr Holiday
June 5 - Arafat Day
June 6 - Eid al-Adha
June 7 - Eid al-Adha Holiday
June 8 - Eid al-Adha Holiday
June 17 - Islamic New Year
September 7 - Prophet Muhammad's Birthday
December 1 - Commemoration Day
December 2 - National Day
December 3 - National Day Holiday

Social Security Contributions In The UAE

In the UAE, social security contributions do not apply to most expatriate employees. Instead, they primarily apply to UAE nationals (Emiratis) and certain GCC nationals under specific agreements. Non-GCC foreign employees (typical expatriate staff) are not required to make social security payments or pension contributions under UAE law.

1. Expatriate Employees

When hiring non-GCC employees in the UAE (whether in the Mainland or Free Zone), employers generally do not pay social security contributions for them. There is no employer or employee pension scheme for typical expat workers, as in many other countries.

Mandatory employer obligations remain limited to payroll compliance, health insurance (in applicable emirates), and statutory benefits (like leave and end-of-service gratuity), but no direct pension contributions are required for most expatriates.

2. UAE Nationals (Emiratis)

For UAE citizens, there is a formal social security/pension regime managed by the General Pension and Social Security Authority (GPSSA). Employers and employees must both contribute under this system.

Contribution rates under pension law (effective 2025):

Total contribution: up to 26% of the pensionable salary for new Emirati contributors
- Employee share: 11%
- Employer share: 15%
- Government support: an additional 2.5% (for private sector employees earning below AED 20,000)

The contribution base is the salary used for pension purposes and has minimum and maximum thresholds (e.g., AED 3,000 to AED 70,000 in the private sector) defined under Federal Law No. 57 of 2023.

For Emiratis employed before the new law’s effective date, older contribution rules (20% total, with 5% employee + 15% employer + government support) may still apply as a transition provision.

3. GCC Nationals Working in the UAE

Under the Unified Protection Extension System, GCC citizens (e.g., Saudi, Bahraini, Kuwaiti, Omani, Qatari) working in the UAE remain covered by their home country’s social security schemes. UAE employers must register these employees and make contributions according to the home country’s rules, as long as they do not exceed the employer’s obligation for UAE nationals.

From July 1, 2025, late payment penalties are enforced if contributions for GCC national employees are not paid on time. A 0.1% daily penalty starts automatically after the due date (16th of the month following the payroll month).

4. Government Support Component

For Emirati employees in the private sector earning below a specified salary threshold, the government contributes 2.5% towards social security alongside employer and employee shares. This support is designed to encourage private-sector employment of UAE nationals.

UAE payroll made compliant with our trusted Employer of record services UAE. Tarmack manages salary processing, statutory benefits, and reporting. Request Demo.

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Personal Income Tax in UAE

As of December 2025, the UAE does not levy personal income tax on individuals. Salaries, wages, bonuses, investment income, rental income, and capital gains are not taxed at the federal or emirate level.

What does this mean?

Zero personal income tax for residents and expatriates
No tax registration, filing, or withholding required for individual income
Applies across all Emirates
Employers are not required to deduct income tax from salaries

Corporate Tax: The UAE’s corporate tax regime applies only to businesses. An individual’s employment income is not subject to corporate tax, even if they are employed by a taxable entity.

Tax Residency: While the UAE has tax residency rules for treaty and international tax purposes, being a UAE tax resident does not create personal income tax liability within the UAE.

With Tarmack as an UAE Employer of Record, payroll is managed in line with the UAE’s tax-free salary framework. Schedule A Consultation.

UAE Payroll Compliance: Government & Legal Framework

1. Government Requirements

A. Registration Requirements

United Arab Emirates (UAE) Labour Law

Private-sector payroll and employment in the UAE are governed by Federal Decree-Law No. 33 of 2021, effective from 2 February 2022. This law replaced the earlier Labour Law and continues to apply as of December 2025.

The law regulates employment terms, salary payments, working hours, and payroll obligations for all private-sector employers operating in the UAE.

Working Week Structure

While the UAE government follows a Monday to Friday workweek, private-sector employers may adopt working schedules based on business needs, as long as they comply with labour law and contract terms.

DIFC and ADGM Jurisdictions

The Dubai International Financial Centre (DIFC) and Abu Dhabi Global Market (ADGM) operate as independent financial free zones with their own employment and payroll regulations.

DIFC follows a common-law framework under Federal Law No. 8 of 2004
ADGM operates under Abu Dhabi Law No. 4 of 2013

Employers in these zones must follow local authority rules instead of MOHRE regulations.

B. Ongoing Compliance Requirements

Employment Contract

Under Article 8 of the Labour Law, employers must issue a written employment contract aligned with the agreed work pattern.

Contracts must be issued in approved formats
Two signed copies are required, one for each party
Payroll payments must strictly match contract terms

Any mismatch between payroll records and the employment contract may result in compliance issues.

UAE Data Protection Law (DP Law)

The UAE Data Protection Law, enacted in January 2022, is still awaiting executive regulations. Once the regulations are issued, employers will have 6 months to comply with data protection requirements covering personal and biometric data. This matters for payroll and HR data (pay slips, employee records, biometric data via Emirates ID, etc.).

2. Pension Requirements

Pension and end-of-service obligations in the UAE vary based on the employee’s nationality and the employer’s jurisdiction. Employers must distinguish between UAE nationals, GCC nationals, and expatriates.

A. Pension Contributions for UAE and GCC Nationals

Pension contributions are mandatory only for UAE nationals and GCC nationals working in the UAE.

UAE nationals and eligible GCC employees are enrolled in the UAE social security system instead of receiving end-of-service gratuity.
Pension entitlement is governed by UAE pension and social security legislation and the employee’s nationality.
Under UAE regulations, most private-sector employees must be enrolled in the Involuntary Loss of Employment (ILOE) insurance scheme. While the policy is employee-funded, employers play a role in enabling enrolment and ensuring workforce awareness.
ILOE provides temporary income support for involuntary job loss. It does not cover resignations, misconduct-related dismissals, or contract expiry, nor does it replace end-of-service benefits or notice pay.

B. GPSSA and Abu Dhabi Pension Authorities

The General Pension and Social Security Authority (GPSSA) manages pension contributions for UAE nationals and GCC nationals across all emirates except Abu Dhabi.
In Abu Dhabi, pension matters are handled by the Abu Dhabi Retirement Pension and Benefits Fund (ADRPBF).

Employers must register eligible employees and begin contributions within 30 days of employment start.

C. GCC Nationals Working in the UAE

GCC nationals working in the UAE remain covered under the pension system of their home country. Employers must comply with cross-GCC pension coordination rules applicable to the employee’s nationality.

D. End-of-Service Benefits for Expatriate Employees

Expatriate employees are not covered under the UAE pension system and are instead entitled to end-of-service benefits (EOSB) under UAE Labour Law.

Eligibility begins after completing one year of continuous service
EOSB is calculated on the employee’s basic salary only

Gratuity calculation:

21 days’ basic wage for each year of the first five years
30 days’ basic wage for each additional year

Unpaid absences are excluded from the calculation. Employers must settle EOSB and all final dues within 14 days of employment termination.

E. Alternative End-of-Service Savings Scheme

Under Cabinet Resolution No. 96 of 2023, employers may opt into a voluntary alternative EOSB scheme.

Allows monthly contributions instead of a lump-sum gratuity
Applies to private-sector employers
Participation is optional, but must follow approved regulatory guidelines

F. DIFC Employee Workplace Savings Plan (DEWS)

Employers operating in DIFC follow a separate end-of-service framework.

DEWS replaces traditional gratuity with a funded savings plan
Employer contributions are mandatory
5.83% of basic salary for up to five years of service
8.33% of basic salary after five years
Contributions are made monthly in USD.

G. Ongoing Compliance Requirements

Pension Payment to the Insured

Pension contributions in the UAE apply only to eligible UAE nationals employed in the government or private sector.

In government employment, the employee contributes 5% of their monthly salary, and the employer contributes 15%.
In the private sector, employers contribute 12.5%, with an additional 2.5% paid by the government.

For pension calculations:

GPSSA salary limits range from AED 1,000 to AED 50,000
ADRPBF salary limits range from AED 3,000 to AED 60,000

Under Federal Law No. 57 of 2023, effective from 31 October 2023, first-time contributors are subject to a total contribution of 26%, split between employee and employer. For private-sector Emiratis earning below AED 20,000, the government covers 2.5% of the employer’s share.

GPSSA continues to manage pension contributions for UAE nationals and GCC nationals. ADRPBF applies only to UAE nationals employed in Abu Dhabi. Late pension payments may result in daily penalties imposed by GPSSA.

H. Employee Protection Insurance / Bank Guarantee (Taa‑meen)

Employers can protect workers’ wages, end-of-service benefits, and certain repatriation costs by complying with Ministerial Resolution No.318 of 2022. This can be done either via:

Bank Guarantee: AED 3,000 minimum per employee, valid for one year and renewed automatically.
Approved Insurance Policy: Purchased for the employee through a licensed insurer.

This is mandatory for private-sector employees and acts as an additional safeguard alongside pension contributions or gratuity obligations.

3. Employment Obligations

A. General Employer Obligations

The New UAE Labour Law allows employers to use flexible work models, including part-time, temporary, and flexible arrangements, subject to MOHRE rules.

Standard working hours are capped at 8 hours per day or 48 hours per week, with overtime payable at statutory premium rates where applicable.

B. Emiratisation

Private sector companies must meet mandatory Emiratisation targets:

50+ employees: annual UAE national hiring targets apply.
20–49 employees: at least one Emirati by 2024 and a second by 2025.

Failure to meet targets may trigger fines (e.g., AED 108,000 in 2025) and potentially impact immigration benefits or fee reductions.

Free Zone entities (including DIFC and ADGM) are currently exempt. Non-compliance may attract financial penalties.

C. Free Zone–Specific Employment Rules

Employers operating in ADGM and DIFC must comply with the employment regulations issued by the respective free zone authorities. These include rules on contracts, probation, working arrangements, employee protections, and governance obligations, which may differ from the federal UAE Labour Law.

ADGM employers are also required to maintain whistleblowing and internal reporting frameworks and must protect employees from retaliation when concerns are raised in good faith.

D. Leave Entitlements

1. Maternity Leave: Female employees are entitled to 60 days (45 days full pay + 15 days half pay). This applies to stillbirth and newborn death cases. An additional 45 days of unpaid leave is allowed for pregnancy-related illness and is excluded from end-of-service calculations.

2. Annual Leave

2 days per month if service is between 6 months and 1 year
Minimum 30 days per year after completing 1 year

Up to 50% of leave may be carried forward or encashed by agreement. Leave is calculated on a calendar-month basis. Part-time employees receive leave proportionate to hours worked, with a minimum of 5 working days per year.

3. Sick Leave: Employees who complete probation and have worked continuously are entitled to up to 90 days of sick leave per year.

15 days full pay
30 days half pay

Any further leave is unpaid. Illness or injury must be reported within two days. A medical certificate is required to validate the sick leave.

4. Compassionate Leave

5 days for the death of a spouse
3 days for the death of close family members

5. Parental Leave: 5 days for both male and female employees, to be used within six months of birth.

6. Study Leave: Up to 10 days per year for employees with more than two years’ service enrolled with a recognised UAE education institution.

7. Public Holidays: In addition to annual leave, employees are entitled to paid official public holidays as recognised by the UAE federal calendar (e.g., National Day, Eid).

8. Hajj and Umrah Leave (UAE): UAE Labour Law does not mandate Hajj or Umrah leave. Employers may grant Hajj leave once during employment, usually up to 30 days and unpaid, subject to company policy. Umrah leave is not a statutory entitlement and may be treated as unpaid leave or adjusted against annual leave, at the employer’s discretion.

4. Salary Administration Framework

Employee remuneration in the UAE is regulated under the UAE Labour Law. Although there is no prescribed statutory format for salary slips, employers typically issue monthly pay statements to employees as part of standard payroll practice.

5. Payroll Banking & Salary Disbursement Rules

Free Zone entities are not subject to restrictions on payroll currency or bank transfers. For mainland employers, however, compliance with the Wage Protection System (WPS) is a mandatory requirement.

Salary Payments via WPS

Companies registered with MOHRE must process employee salaries through the WPS using a local UAE bank account, and payments must be made in UAE dirhams. Salary transfers must be completed within 14 days of the salary due date, or in line with the payment frequency stated in the employment contract.

WPS requirements apply exclusively to mainland entities under MOHRE and do not apply to Free Zone companies, with the exception of Jebel Ali Free Zone (JAFZA) and Dubai Multi Commodities Centre (DMCC).

Stay payroll-compliant in the UAE with Tarmack managing every pay run accurately. We, as UAE EOR, ensure every payroll cycle complies with MOHRE and WPS requirements. Contact us!

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Skills on Demand in the UAE

The UAE’s job market remains strong in 2025, with high demand for skilled professionals across multiple sectors driven by economic diversification, infrastructure growth, and digital transformation. Unemployment is low, and job openings continue to rise, making the country an attractive destination for international talent.

Key In-Demand Sectors

1. Information Technology & Digital

With the UAE pushing digital initiatives, jobs in technology are booming, particularly around:

Software Development
Cybersecurity Specialists
Data Analysts
AI/ML and Cloud Engineering roles

2. Engineering & Infrastructure

Infrastructure development and renewable energy projects keep engineering roles in steady demand, notably:

Civil and Structural Engineers
Energy Sector Engineers
Construction and Project Managers

3. Healthcare

Healthcare continues to be one of the fastest-growing employment areas due to population growth, expanding hospital networks, and medical tourism. Roles with strong demand include:

Registered Nurses
General Practitioners and Specialists
Pharmacists
Lab Technicians and Allied Health Professionals

4. Finance, Business & Professional Services

Professionals in finance, compliance, accounting, and business operations are sought after as firms scale and diversify:

Finance and Compliance Officers
HR and Operations Specialists
Sales and Marketing professionals

5. Education & Training

Teachers and academic coordinators remain important as the UAE prioritises high-quality education and skills development.

Other Roles Growing in Demand

Digital Marketing and SEO Specialists
Renewable energy specialists
Healthcare management
Data science and analytics roles

Looking to hire in the UAE? Tarmack, as an Employer of record UAE, helps employers onboard and manage talent compliantly, without a local entity. Connect with us!

Probation in UAE

The probation period in UAE can be for a maximum of 6 months.

Termination in UAE

Either party can send a termination notice to the other for valid legal reasons.
The termination can be without notice only in certain serious conditions.
A mandatory notice period of at least 30 days to 90 days must be given according to UAE Labor Law. This applies to both parties.
The notice period may be reduced by mutual agreement.
All remaining payments must be completed within 14 days of termination of the contract.

Severance Pay in UAE

Employees who have worked for 1 to 5 years are entitled to a severance pay of 21 days per year worked.
For more than five years of work, the employee is entitled to 30 days per year worked after the first five years.
For part-time work, the number of hours per year in the part-time contract is divided by the number of hours per year in the full-time contract and multiplied by 100. This percentage is multiplied by the severance pay in the full-time contract.
There is no severance pay for less than one year of work.

Employees vs Independent Contractors in UAE

Correctly classifying workers in the UAE is critical to avoid penalties, back payments, and business disruption. Under UAE labor law, employees are hired under a registered employment contract, sponsored by the employer, and entitled to statutory benefits such as end-of-service gratuity, paid leave, and notice periods. Employers must process payroll, visas, and comply with Ministry of Human Resources & Emiratisation (MOHRE) rules.

Independent contractors, by contrast, operate under commercial or freelance arrangements. They manage their own visas (often via freelance permits or free zones), invoice for services, and are not entitled to employee benefits. They must retain autonomy over how and when work is performed.

Misclassification, treating an employee as a contractor while exercising control over hours, exclusivity, or reporting, can trigger fines, visa issues, and retroactive liabilities.

An Employer of Record (EOR) in the UAE removes this risk by legally employing workers on your behalf, ensuring compliant contracts, payroll, visas, and benefits, while you focus on managing performance.

Choosing the right model protects your business and enables compliant growth in the UAE. Schedule A Consultation.

Employer of Record in Dubai and Abu Dhabi

An Employer of Record (EOR) in Dubai and Abu Dhabi allows companies to hire employees across the UAE without establishing a local legal entity. The EOR is the sole legal employer, responsible for compliant employment contracts, payroll, visas, and statutory benefits, while you retain full control over daily work and performance. This model enables fast, compliant market entry and significantly reduces employment risk in the UAE.

Global PEO in UAE

In the UAE, Global PEO and Employer of Record refer to the same employment model. There is no co-employment structure under UAE labor law. A Global PEO acts as the legal employer on your behalf, handling workforce onboarding, payroll processing, visa sponsorship, and ongoing labor law compliance, allowing you to hire both employees and contractors with confidence.

Start Hiring in the UAE Today

Tarmack’s Employer of Record UAE solution simplifies hiring, payroll, and compliance across the UAE. With transparent pricing and deep local expertise, you can build and scale teams without setting up an entity or managing complex employment regulations.

From your first hire to a growing remote team, Tarmack’s UAE EOR and Global PEO service supports every step of your hiring journey.

Frequently Asked Questions

What is an Employer of Record (EOR) in the UAE?

An Employer of Record in the UAE is a local company, like Tarmack, that becomes the legal employer of your employees and contractors in Dubai, Abu Dhabi, or elsewhere in the UAE, while you retain operational control over their work. The EOR handles employment contracts, payroll, visa sponsorship, statutory benefits, and full compliance with UAE labor laws.

What is the cost of an Employer of Record in the UAE?

Tarmack’s EOR UAE services offer transparent, easy-to-plan pricing. Our fees start at $199 per employee per month and $39 per contractor per month. For companies that only require payroll support, pricing starts at $15 per employee per payroll cycle.

For a detailed breakdown or customized plans, contact us today.

How does an EOR operate in the UAE?

UAE EOR legally employs your workforce while you oversee their daily responsibilities. You choose the candidates, and the EOR takes care of employment contracts, payroll (WPS), benefits, visa sponsorship, and ensures compliance with UAE labor laws.

What services are included with a UAE EOR?

A UAE EOR typically handles:

Compliance with Labor Laws: Drafting contracts, managing notice periods, and end-of-service obligations.
Payroll Management: Processing salaries, WPS-compliant payroll, and handling any applicable taxes.
Immigration Support: Securing work permits, residency visas, and other government approvals.
HR Administration: Onboarding, offboarding, leave tracking, and employee benefits management.
Government Liaison: Managing official documentation and interactions with local authorities.

Why should businesses use a UAE EOR?

Quick Market Access: Hire employees without forming a local entity.
Reduced Legal Risk: Ensure full compliance with labor and visa regulations.
Cost Savings: Avoid the expenses of establishing a local company.
Focus on Core Business: Let the EOR manage HR, payroll, and administrative tasks.

When is it ideal to engage a UAE EOR?