United Arab Emirates Guide
|VAT||5% standard rate|
Employer of record Services
TopSource offers complete payroll, EOR and contractor management services for UAE. TopSource provides Employer of Record services to global companies establishing a presence in UAE that do not wish to be burdened with the complications of UAE employment regulations.
TopSource serves as an outsourced Global Employment Solutions provider. We provide comprehensive employment services such as payroll, payroll related compliances, leave and attendance administration, HR management, and assistance with employer compliances.
If you have an established presence in UAE, our payroll bureau services are available. But if you are seeking to avoid the complications of a subsidiary—or wish to establish a presence quickly an convert to a subsidiary later—our EOR service is ready to support you today.
Services we offer
|• Payroll bureau solutions for your UAE entity|
|• Employment solutions/leasing||• Providing documents associated with employment|
|• Employee on-boarding process and documentation||• Monthly salary calculation|
|• Salary disbursement to employee’s account||• Pay slip generation (If applicable)|
|• Employee statutory benefits administration and deduction|
|• Foreign exchange and money transfer services for payment of employees and 3rd parties|
Company formation in United Arab Emirates
We can help with company registration, company incorporation along with all the necessary documentation in UAE. We can also assist foreign companies to smoothly setup a company anywhere in UAE.
- Minimum Wage
For expatriates, there is no mandatory minimum wage. For UAE nationals, minimum wage is determined by level of education:
• No high school certificate- 3,000 AED
• High school certificate- 4,000 AED
• College degree or higher- 5,000 AED
Employer Social Security 12.50% Employee Social Security 5.00%
Working HoursThe work week in the UAE is from Sunday to Thursday with full time employment considered 48 hours weekly and 8 hours daily.
For businesses, hotels and cafes employees, the workday is 9 hours. During Ramadan, working hours are reduced by 2 daily.
OvertimeOvertime pay is paid at a rate of 125% of the regular pay, however, for overtime hours worked between 9pm and 4am, overtime is calculated at 150% of the regular pay.
Maternity LeaveA woman is entitled to 45 days of fully paid maternity leave if they have completed at least 1 year of employment.
For women who work under the DIFC employment law, maternity leave is 65 days if the woman has worked for at least 1 year. The first 33 days is paid at a rate of 100% of the normal pay and the remaining 32 days is paid at the rate of 50% of the regular pay.
Paternity Leave/Parental LeavePaternity Leave
There is no statutory entitlement in the UAE.
Under the DIFC, Pregnant employees are entitled to paid leave for prenatal care.
Social Security• Employer contributions- 12.50% of the employee’s monthly salary and housing allowance if the employer is a private entity. If the employer is a government body, the contribution is 15%.
• Employee contributions- 5% of the monthly salary and housing allowance
The minimum salary that is subject to social security contributions is 1,000 AED and the maximum is 50,000 AED.
For expatriates, social security is not available and therefore, no contributions need to be made.
Pension Fund/Health InsuranceTotal pension fund contributions are 26%, with 6% contribution from the government. Employers are required to contribute 15% of employees’ wages to their pension fund. Employees are required to contribute 5% of their wages to their pension fund.
Health Insurance – For UAE nationals, healthcare is low-cost. For expatriates, in order to gain access to health services, one must pay a fee and have a health card.
TerminationTermination Process – The termination of an employment agreement must be given in writing.
For expatriates, the final payment is made when the employment visa is cancelled. In addition, the employer is obligated to notify the authorities when an employee leaves the UAE.
Notice Period – A minimum of 30 days of advance notice is required by law. The employer can choose to give pay in lieu of notice if they so choose.
Under the DIFC employment law, notice period depends on the length of service:
• 1-5 months of employment- 1 weeks’ notice
• Up to 5 years or employment- 30 days’ notice
• 5+ years of employment- 90 days’ notice
DIFC also allows for pay in lieu of notice.
Severance Pay – Workers are entitled to 21 days pay for every year up to 5, and 30 days for each additional year.
Termination Pay – • 1-5 years of employment – the employee is entitled to 21 days of wages for each year employed
• 30 days of wages for each additional year after 5 years of service.
The total amount of severance cannot be more than the total of 2 years’ salary.