Hire Across the Emirates Without a Trade License or Local Sponsor.
The UAE offers zero personal income tax, a global talent pool, and strategic access to the Middle East. RecruitGo handles employment contracts, visa sponsorship, WPS payroll, gratuity, health insurance, and MoHRE compliance so you can hire in days.
What Is an Employer of Record in the UAE?
An Employer of Record (EOR) is a locally licensed entity that legally employs workers in the UAE on your behalf. RecruitGo's UAE entity becomes the legal employer. We sign the employment contract registered with MoHRE (Ministry of Human Resources and Emiratisation), sponsor work visas and Emirates IDs, process payroll through the Wage Protection System (WPS), manage gratuity provisions, arrange mandatory health insurance, and handle all compliance under Federal Decree-Law No. 33 of 2021.
You retain full control over the employee's work, schedule, and responsibilities. They report to you, work on your projects, and function as part of your team. We handle everything that UAE labour law places on the employer, including visa sponsorship, which is tied directly to the employing entity.
Why EOR over your own entity? Setting up a mainland company requires a trade license, registered office, and in some activities a local service agent. Free zone companies offer 100% foreign ownership but restrict operations to the free zone and require zone-specific licensing. EOR lets you hire across any emirate immediately, without choosing between mainland and free zone, and without the overhead of entity maintenance, visa quotas, and WPS setup. See full EOR vs entity comparison →
Who Should Use EOR in the UAE?
What It Costs to Hire Through EOR
The UAE has zero personal income tax and no social security contributions for expatriate employees. The primary employer costs are the end-of-service gratuity provision, mandatory health insurance, and visa-related fees. This makes the UAE one of the simplest payroll environments in the world from a deductions perspective.
| Component | Monthly (AED) | Rate / Basis |
|---|---|---|
| Gross salary | 15,000 | — |
| Income tax | 0 | 0% (no personal income tax) |
| Social security (expat) | 0 | Not applicable for non-UAE nationals |
| Gratuity provision | ~875 | 5.83% of basic (21 days/year for first 5 years) |
| Health insurance | ~300 to 800 | Mandatory; varies by plan and emirate |
| Visa and Emirates ID | ~250 to 500 | Annualized; one-time costs spread monthly |
| Total employer cost | ~16,425 to 17,175 | ~110 to 115% |
* Gratuity is calculated on basic salary only (typically 40 to 60% of total package). First 5 years: 21 calendar days' basic per year (5.83% monthly). After 5 years: 30 calendar days' basic per year (8.33% monthly). Health insurance costs vary by emirate, plan level, employee age, and number of dependents. Visa and Emirates ID costs are one-time but shown annualized. For UAE nationals, employer contributes to GPSSA pension (12.5% in Abu Dhabi, 15% in other emirates). EOR management fee not included above.
The simplest payroll in the region: With zero income tax, zero social security for expats, and gratuity as the only major statutory employer cost, the UAE has the lightest payroll compliance burden of any RecruitGo market. The main complexity is WPS compliance (all salaries must flow through the Wage Protection System via approved banks) and visa/immigration administration.
How Hiring Works Through EOR
You share the role, salary package (basic + allowances), location (Dubai, Abu Dhabi, or any emirate), and start date. We confirm visa requirements, health insurance options, and return a cost breakdown within 24 hours.
We draft an employment contract compliant with Federal Decree-Law No. 33 of 2021 and register it with MoHRE. We apply for the employee’s work permit, entry visa, and Emirates ID. For employees already in the UAE, we process the visa transfer.
We run monthly payroll in AED through the Wage Protection System (WPS), provide payslips, arrange mandatory health insurance, and provision gratuity monthly. During Ramadan, we adjust working hours as required by law.
We monitor MoHRE regulatory changes, Emiratisation requirements, WPS enforcement updates, health insurance mandates across emirates, and gratuity law developments including the new voluntary Savings Scheme alternative.
EOR vs Mainland vs Free Zone vs Contractors
| EOR | Mainland LLC | Free Zone | Contractor | |
|---|---|---|---|---|
| Time to first hire | 3 to 5 days | 2 to 4 weeks | 1 to 3 weeks | Immediate |
| Setup cost | None | AED 15K to 50K+ | AED 10K to 30K+ | None |
| Foreign ownership | Not applicable | 100% (since 2021) | 100% | Not applicable |
| Visa sponsorship | Handled by EOR | Your responsibility | Zone-specific quotas | Not applicable |
| Trade across UAE | Any emirate | Full access | Restricted to zone | Not applicable |
| WPS compliance | Handled by EOR | Your responsibility | Your responsibility | Not applicable |
| Best for | 1 to 15 people, speed | 15+, client-facing | Tech, consulting | Short-term only |
Mainland vs free zone: Since 2021, mainland companies can be 100% foreign-owned for most activities. Free zones offer streamlined setup but restrict where you can operate (trade within the free zone, or with companies outside the UAE). Mainland allows you to trade anywhere in the UAE. EOR sidesteps this decision entirely because you are not forming any entity.
Gratuity (End-of-Service Benefits)
Gratuity is the UAE's primary employee protection for expatriates. There is no pension or social security system for foreign workers. Instead, employers must pay a lump-sum gratuity on termination based on the employee's basic salary and years of service. Since the 2022 labour law reform, all contracts are fixed-term (max 3 years, renewable), and employees who resign after 1 year of service receive their full gratuity entitlement.
| Length of service | Gratuity rate |
|---|---|
| Less than 1 year | None |
| 1 to 5 years | 21 calendar days’ basic salary per year |
| More than 5 years | 30 calendar days’ basic salary per year (for years beyond 5) |
| Maximum cap | Total gratuity cannot exceed 2 years’ salary |
Basic salary matters: Gratuity is calculated on basic salary only, not total compensation. Allowances for housing, transport, utilities, and bonuses are excluded. PwC UAE reports that average basic salary is approximately 48% of total compensation packages. This means structuring the basic/allowance split directly affects your gratuity liability. Your EOR advises on compliant salary structuring.
The new Savings Scheme (voluntary): Cabinet Resolution No. 96 of 2023 introduced a voluntary alternative to traditional gratuity. Employers can invest gratuity contributions (5.83% or 8.33% of basic monthly) into approved investment funds. Employees receive the principal plus investment returns on separation. This protects employees against employer insolvency and inflation. Participation is optional for employers.
UAE nationals: GPSSA pension
UAE nationals are covered by the General Pension and Social Security Authority (GPSSA) instead of the gratuity system. Employer contributions are 12.5% of salary in Abu Dhabi and 15% in other emirates. Employee contribution is 5%. These rates are significantly higher than the gratuity provision for expats, so hiring UAE nationals carries a higher statutory cost.
Employee Benefits and Leave Entitlements
Mandatory leave entitlements
Mandatory employer benefits
Ramadan working hours: During the holy month of Ramadan, daily working hours are reduced by 2 hours for all employees (including non-Muslims). Standard 8-hour days become 6 hours. This applies across the private sector. Plan project capacity accordingly for approximately 30 days each year.
Termination Rules and Notice Periods
Under the 2022 labour law, all contracts are fixed-term (maximum 3 years, renewable). Either party may terminate with written notice as specified in the contract. The minimum notice period is 30 days, and contracts may specify up to 90 days. Payment in lieu of notice is permitted. Employers must pay all outstanding wages, unused annual leave, and gratuity within 14 days of the final working day.
Probation period
Maximum 6 months. During probation, either party can terminate with 14 days' written notice. If the employee intends to leave the UAE, 14 days' notice is required. If the employee wants to join another UAE employer, 1 month's written notice is required. Probation time counts toward total service for gratuity purposes.
Termination for misconduct
Summary dismissal is permitted for serious misconduct (e.g., fraud, assault, drug use at work, disclosure of confidential information, or 20+ consecutive days of unexplained absence). Under the 2022 reforms, even employees dismissed for misconduct retain their gratuity entitlement. The employer must conduct a written investigation and issue a written warning before dismissal, except for the most serious offenses.
Arbitrary dismissal: If an employee is terminated without valid justification, they may file a complaint with MoHRE. If mediation fails, the case goes to the labour court. The court may award compensation of up to 3 months' salary for arbitrary dismissal, in addition to notice pay, gratuity, and other entitlements. Dubai Courts' 2025 statistics show a 94% employee win rate in gratuity disputes.
Visa cancellation on termination
When an expatriate employee's contract ends, the employer must cancel their work permit and residence visa. The employee typically has 30 days to leave the UAE or transfer to a new employer's sponsorship. The employer is responsible for the employee's repatriation flight if they are leaving the country. Your EOR manages the full exit process including final settlement, MoHRE notification, and visa cancellation.
Working Hours and Overtime
Standard working hours are 8 hours per day or 48 hours per week. During Ramadan, working hours are reduced by 2 hours daily for all employees. Employees who work for more than 5 consecutive hours are entitled to a rest break of at least 1 hour (not counted as working time).
| Scenario | Rate |
|---|---|
| Overtime (beyond 8 hours/day) | 125% of hourly rate (base + 25%) |
| Overtime between 10 PM and 4 AM | 150% of hourly rate (base + 50%) |
| Work on rest day | 150% of base pay or substitute rest day |
| Maximum overtime | 2 hours per day |
| Ramadan hours | Reduced by 2 hours daily for all employees |
Frequently Asked Questions
With zero income tax and zero social security for expats, the UAE has the lowest statutory employer burden. Your main costs above gross salary are gratuity provision (~5.83% of basic for the first 5 years), mandatory health insurance (AED 300 to 800/month), and visa fees (one-time, annualized). Total employer cost is roughly 110 to 115% of gross salary. The EOR management fee is additional.
No. The UAE has zero personal income tax. Employees receive their full gross salary with no tax deductions. The UAE introduced a 9% corporate tax in June 2023 on business profits exceeding AED 375,000, but this does not apply to individual employment income.
WPS is a mandatory electronic salary transfer system established by the Central Bank and MoHRE. All private sector employers must pay salaries through WPS via approved banks or exchange houses. If an employer does not pay through WPS or pays late (more than 15 days after the due date), MoHRE may restrict labour services, impose penalties, or refer the case for inspection.
Expat employees who complete 1+ years of continuous service are entitled to gratuity on separation. It is 21 days’ basic salary per year for the first 5 years, then 30 days’ basic per year after that. Total cannot exceed 2 years’ salary. Calculated on basic salary only, not total package. Employers can optionally enrol employees in the new Savings Scheme (Cabinet Resolution 96 of 2023) as an alternative.
Yes. Since February 2, 2022, all employment contracts in the UAE must be fixed-term (maximum 3 years, renewable). Unlimited contracts have been phased out. Employers who still had unlimited contracts were required to convert them by February 2025. The fixed-term structure simplifies gratuity calculations and removes the old distinction between resignation and termination entitlements.
Employers must provide at minimum basic health insurance for every employee. This is mandatory across all emirates and the employer cannot deduct the premium from the employee’s salary. The requirement covers the employee only. Coverage for dependents (spouse, children) is the employee’s responsibility unless the employer chooses to include them.
Companies with 50 or more employees must increase their Emirati workforce by 2% annually. Non-compliance results in monthly fines of AED 7,000 per unfilled position (increasing to AED 8,000 in 2025). The NAFIS program provides incentives for hiring UAE nationals. If you have fewer than 50 employees through EOR, Emiratisation quotas typically do not apply directly.
Minimum 30 days, up to 90 days as specified in the employment contract. Payment in lieu of notice is permitted. During probation (max 6 months), 14 days’ notice applies. All outstanding wages, leave, and gratuity must be settled within 14 days of the final working day.
Working hours are reduced by 2 hours per day for all employees, including non-Muslims. An 8-hour day becomes 6 hours. This is mandatory across the private sector and lasts approximately 30 days. Plan for reduced capacity during this period.
