Payroll
/
United Arab Emirates
Global coverage
Available in +150 countries
Employer costs, taxes, minimum wage and leave rules for hiring here, plus the faster route: hire a contractor with Ontop, no local entity needed.
2026
Currency
AED د.إ (UAE Dirham)
Employer contributions
12.5% for UAE nationals (employer); 0% for expats
Minimum wage
No statutory minimum (sector-specific for nationals)
Payment frequency
Monthly
Calendar year (Jan 1 - Dec 31)
Capital
Abu Dhabi
Timezone
GST (GMT+4)
Employee or contractor
If the work is project-based or you need to move fast, a contractor gets you the same talent with a fraction of the paperwork.
Employee
~AED 15,000 total (expat)
/month
For a gross salary of
AED 15,000 gross/month
Setup
Local entity or employer of record, plus tax and social security registration
Employer contributions
12.5% for UAE nationals (employer); 0% for expats
Mandatory extras
Annual Performance Bonus
Monthly admin
WPS payroll by last day of month - MOHRE compliance - gratuity accrual tracking
Contractor with Ontop
No local entity
$49
/contractor/month
The agreed rate, plus Ontop from $49 per contractor per month.
Sign a contract, yours or an Ontop template. No local registration on your side.
No employer contributions: the contractor handles their own taxes and social security.
One payment per invoice, in one payroll run.
Paid into their Ontop Global Account in USD.
See the full side-by-side comparison
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A contractor's rate usually covers their own taxes, so compare total cost, not just gross pay. Run your numbers in the contractor vs employee calculator.
Hiring here: the full breakdown
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Payroll guide
Employer costs come on top of gross pay. Use these figures to budget a hire and to compare it with a contractor rate.
Total monthly cost
~AED 15,000 total (expat)
Example gross salary
AED 15,000 gross/month
~AED 15,000 net (expat)
Net pay to the employee
Tax and employee contributions
Withheld from gross pay
AED 0 (expat) / ~AED 1,875 (UAE national)
Employer contributions on that salary
Employer contributions
12.5% for UAE nationals (employer); 0% for expats
Employee contributions
5% for UAE nationals only; 0% for expats
Total cost above gross
~12.5% above gross (nationals only; expats: 0%)
Figures are estimates for planning. Rates change with each budget and can vary by sector, so confirm them before you make an offer.
What people earn here, from the legal floor to the main cities, plus the extra pay most employers budget for.
National average
~AED 10,000
Per month
Dubai
AED 12,000 - 30,000
~40%
Abu Dhabi
AED 11,000 - 25,000
~25%
Monthly gross. National average salary per year:
~AED 120,000
Minimum wage
No statutory minimum (sector-specific for nationals)
Paid:
No statutory minimum
Extra pay
Annual Performance Bonus
Discretionary, 1-2 months common in finance/tech
December/Q1
Collective agreements can set sector minimums above the national one. Check whether one applies to the role before you set the salary. Next step: estimate the full cost of an employee.
Who collects what, how often, and what happens when a payment is late.
Income tax brackets
No personal income tax for individuals
Tax year:
Calendar year (Jan 1 - Dec 31)
Filing calendar
Monthly WPS (Wage Protection System) by last day of month
Social security payments
Not applicable (no personal income tax)
Income tax
Not applicable
Employee tax certificate
Not applicable
Not applicable
Annual return
Not required (no income tax)
Late payment penalties
WPS non-compliance: AED 1,000/employee fine; MOHRE ban on new hires
Who collects what
MOHRE (Ministry of Human Resources and Emiratisation)
Labor law and Emiratisation compliance
Federal Tax Authority (FTA)
VAT and corporate tax
GPSSA / DEWS
Social security for nationals; savings scheme for expats
The time off and paid leave every employee is entitled to by law. Budget for it when you compare an employee with a contractor.
Annual leave
Annual Leave
30 calendar days (after 1 year)
Public holidays
15 public holidays (approximate, varies by emirate)
Sick leave
Sick Leave
Full pay first 15 days; half pay next 30 days; unpaid thereafter
Maternity leave
13 weeks (90 days) maternity + 5 days paternity
Full pay from employer
The contracts you can use, and what ending an employment relationship costs.
Permanent
Employment Contract (Unlimited)
Fixed term
Employment Contract (Limited / Fixed Term)
Independent contractor
Freelancer Permit / Independent Contractor
Collective agreements
No general CBA system
Ending employment
End-of-Service Gratuity
How it is calculated
21 days/year (first 5 yrs) + 30 days/year (after 5 yrs), capped at 2 years total salary
Calling someone a contractor does not make them one. If the role works like employment in practice, local authorities can reclassify it, with back contributions and penalties.
The errors that most often trigger back payments and penalties here, and what to do instead.
WPS (Wage Protection System) Non-Compliance
Risk Level: HIGH
The UAE's WPS requires all private sector salaries to be paid via approved banks or exchange houses and reported to MOHRE by the last day of the month. Late or partial payments trigger a hiring ban, contract suspension, and AED 1,000 per-employee fine. In 2025, MOHRE extended WPS monitoring to include gratuity accrual tracking.
End-of-Service Gratuity Under-Accrual
Risk Level: HIGH
UAE gratuity is calculated on basic salary only - not total package including allowances. However, artificially low basic salary structures to minimize gratuity are now challenged by MOHRE.
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Next topicOntop is the Global Workforce Engine for contractor teams: contracts, compliance documents and payments in 150+ countries.
150+
countries
$49
per contractor per month
1 run
to pay your whole team
USD
Global Account for every contractor
FAQ
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Ontop works with contractors, not employees. As Contractor of Record, Ontop handles contracts, compliance documents and payments for contractors in 150+ countries. To employ someone, you need a local entity or an employer of record. Ontop doesn't act as your employer of record.
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Employers pay contributions on top of gross salary. The cost table on this page shows the rates that apply here and a worked monthly example. A contractor with Ontop costs the agreed rate plus Ontop from $49 per contractor per month.
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Many countries require an extra month or an annual bonus for employees. The salaries section on this page shows the one that applies here and when it is usually paid. Contractors are paid what you agree in the contract.
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Employers withhold income tax and the employee's social security share every pay run, then pay them to the local authorities. The taxes section on this page lists the brackets, rates and filing deadlines that apply here.
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Yes. The contractor vs employee calculator compares the full cost of an employee, employer contributions included, with a contractor rate plus Ontop's monthly fee.
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When the work is project-based, you need to start fast or you don't have a local entity. If the person will work fixed hours, under your direction and only for you, local law may treat them as an employee, so hire them as one.
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Misclassifying employees as contractors, missing tax and social security deadlines, and ignoring collective agreements that set higher wage floors. The mistakes section on this page covers the ones that come up most often here.
Compare employer costs, taxes and contractor rules in nearby countries:
Ready to hire? See Ontop pricing or learn how to build a global team without an employer of record.
Ready to hire? See Ontop pricing or learn how to build a global team without an employer of record.