Using an Employer of Record in the United Arab Emirates

Hiring and paying employees in the United Arab Emirates can be complicated because of the country’s evolving labor and employment laws. But using an Employer of Record (EOR) in the United Arab Emirates helps streamline the process.

With an EOR, like Payoneer Workforce Management, you can engage local talent and get help with onboarding, payroll, and compliance, without setting up a legal entity.

Find out more about Payoneer Workforce Management, or keep reading to learn about using an EOR in the United Arab Emirates.

How to hire employees in the United Arab Emirates

Companies looking to hire employees in the United Arab Emirates have three main options.

1. Set up a local entity: This takes a lot of time and effort. It can also include high setup costs. But it gives your company total operational control.
2. Hire independent contractors or freelancers: This approach offers flexibility and minimizes your legal obligations. However, it comes with the risk of misclassification and associated penalties.
3. Engage employees through an EOR: When you partner with an EOR in the United Arab Emirates, you can legally onboard and manage employees without setting up a local entity. The EOR helps you manage payroll, taxes, benefits, and labor law requirements.

Payoneer Workforce Management provides Employer of Record services in the United Arab Emirates. We enable you to compliantly engage talent and mitigate risks related to contractor misclassification.

How to onboard employees in the United Arab Emirates

When welcoming new employees from the U.A.E. into your organization, a thorough onboarding process is essential. This allows your new candidate to hit the ground running and helps you stay on the right side of local labor laws.

When engaging talent in the United Arab Emirates, the typical steps of the onboarding process include:

• Enrollment in payroll and benefits: The local workers should be enrolled in payroll and benefits, as per local regulations.
• Device shipment and configuration: The employer must make sure the local talent is equipped with the right devices and support.
• Orientation: Arrange a company induction session during the local hire’s first week to help them understand company procedures, the onboarding process, and their duties in their new role.
• Introduction to team and colleagues: Schedule time for the local talent to get to know the team and wider business colleagues.

An Employer of Record, like Payoneer Workforce Management, can enable companies to compliantly onboard and engage talent across borders through its technology platform.

Pay employees in the United Arab Emirates

When you pay employees in the United Arab Emirates, you pay in U.A.E. Dirham (AED). Payday typically falls on the 28^th of every month, and it’s worth noting that there is no national minimum wage in the United Arab Emirates.

For expat employees, employers pay an Emiratisation Fee as part of the United Arab Emirates payroll process. This is an additional monthly cost per expat employee. It was introduced in July 2024, and fees increase every 6 months until the end of 2026.

Date range	Emiratisation fee (per expat employee per month)
July to December 2024	AED 350
January to June 2025	AED 550
July to December 2025	AED 650
January to June 2026	AED 775
July to December 2026	AED 875

Employees pay no income tax in the U.A.E., and the nation doesn’t have a comprehensive social security system. Instead, support and benefits are provided through employer benefits, government programs, and labor regulations.

While there is no public health insurance in the United Arab Emirates, employers are required to provide private health insurance coverage.

EORs may help you set up private health insurance plans for your U.A.E. employees. 

A streamlined way to pay employees in the United Arab Emirates is by working with an Employer of Record in the United Arab Emirates. 

Payoneer Workforce Management provides a unified, all-in-one platform that allows you to manage a global workforce and pay contractors and employees in just a few clicks.

Employment laws in the United Arab Emirates

All employers in the United Arab Emirates have to abide by local labor laws. Key employment regulations include:

Working hours 

The standard working day is 9 hours, up to a maximum of 45 hours per week. 

During Ramadan, the daily working hours for all private-sector employees are reduced by 2 hours, regardless of religious affiliation.

Overtime 

Overtime pay is mandatory for non-managerial roles. Other roles may take a day off for additional days or hours worked.

• Regular overtime is compensated at 125% of the hourly pay
• Weekends and public holidays are compensated at 150% of the hourly pay

Probation and notice periods

A probation period isn’t mandatory, and there’s no minimum duration. The maximum duration is 6 months. 

Notice period during probation is a minimum of 14 days. Notice period after probation can range from 30 to 90 days.

Understanding the complexities of employment law in a new country is challenging. But by using Payoneer Workforce Management’s infrastructure, you may get assistance to stay compliant with local labor laws.

Minimum wage in the United Arab Emirates

There is no minimum wage in the United Arab Emirates.

Employment contracts in the United Arab Emirates

When engaging employees in the United Arab Emirates, you need a written employee contract, in both Arabic and English, signed by both the employer and employee.

The contract should specify:

• The employee’s start date
• The type of work
• The place of work
• Terms and conditions
• The duration of the contract
• The agreed salary and payment frequency

Providing a locally compliant employment contract is essential for managing employee expectations and reducing legal risk. With Payoneer Workforce Management, you can onboard talent quickly and securely with localized contracts and payroll.

Leave policy in the United Arab Emirates

Employees in the United Arab Emirates are entitled to the following paid leave.

Public holidays and vacation time

There are at least 13 public holidays in the U.A.E. per year. Days may vary depending on government announcements.

Employees are also entitled to 30 days of paid vacation leave, which they can start using after completing 6 months of employment.

Maternity leave and paternity leave

Mothers in the U.A.E. are entitled to 60 days’ maternity leave. For the first 45 days, they receive full pay. For the remaining 15 days, they receive 50% of their usual salary.

Fathers are entitled to 5 days of paid paternity leave at their full wage.

Sick leave

Once an employee’s probation period is completed, they can take up to 90 days of sick leave per calendar year.

They are entitled to 15 days of fully paid sick leave per year, 30 days of sick leave at 50% of their usual salary, and 45 days of unpaid sick leave.

Work permit in the United Arab Emirates

The rules for work permits in the United Arab Emirates vary depending on the employee’s country of origin. So it’s important to check government websites and resources for specific details.

Here are some useful resources:

• Information on U.A.E. work permits
• Expat employment process in the U.A.E.

Background check in the United Arab Emirates

You may want to conduct background checks before engaging an employee in the United Arab Emirates. Background checks can include criminal checks, verification of a candidate’s employment and education history, and reference checks.

Employers may likely need consent from the employee to perform checks. They also need to disclose which background checks they’re planning to run. Always check local regulations before conducting employee background checks.

Employment termination in the United Arab Emirates

You can end an employee contract in any of the following scenarios:

• Employee resignation
• Mutual agreement between the employee and the employer
• Termination during the probationary period
• Termination by the employer due to misconduct, performance issues, absence without leave, etc.

Notice period for ending a contract can range from 14 to 90 days.

Termination of a contract by an employer without valid grounds may be considered unfair dismissal. This can lead to legal consequences. 

Termination of a contract in the U.A.E. is a complicated process and should be handled carefully.

Company registration in the United Arab Emirates

If you want to expand your operations into the United Arab Emirates and are happy to manage all aspects of payroll, taxes, and benefits yourself, registering your company in the U.A.E. is an option.

Details on how to do this can be found on government websites. But bear in mind, the process is often expensive, complex, and time-consuming.

Using an Employer of Record in the United Arab Emirates is a streamlined option, particularly if you aren’t planning to maintain a long-term presence in the country.

An EOR like Payoneer Workforce Management allows you to expand into 160+ countries without setting up a local entity.

PEO in the United Arab Emirates

A Professional Employer Organization (PEO) in the United Arab Emirates can support HR and payroll functions, but requires you to have a legal entity in-country. 

On the other hand, an Employer of Record in the United Arab Emirates does not require a legal entity to support onboarding, paying, and managing a local team. This often makes it the better choice for companies new to the U.A.E. market.

Payoneer Workforce Management’s Employer of Record services in the United Arab Emirates

Payoneer Workforce Management helps growing companies onboard, pay, and manage employees in the U.A.E. without setting up a local entity. 

As your EOR in the United Arab Emirates, we offer assistance with employment contracts, benefits administration, taxes, and payroll, while you retain control over daily operations.

Book a demo to learn more about Payoneer Workforce Management.

FAQs

1) What is an Employer of Record in the United Arab Emirates?

An Employer of Record in the United Arab Emirates is a third-party organization that legally employs workers on your behalf and helps manage payroll, taxes, and employment contracts so that you can engage talent without a local entity.

2) How much does it cost to hire in the United Arab Emirates?

In the U.A.E., it costs approximately 14.5% to hire an employee on an annual salary of USD 60,000. 

Employer costs can vary depending on the employee’s salary and other local factors. You can use our employee cost calculator for an estimate.

3) Why should you hire United Arab Emirates talent with an EOR?

Payoneer Workforce Management allows you to onboard and pay employees and independent contractors across the globe in 70+ currencies, without setting up a local entity. Get in touch for details.