Employer of Record United Arab Emirates
Employer of Record United Arab Emirates
The United Arab Emirates’ complex labor regulations often present challenges for businesses. Agility provides a streamlined solution for hiring local talent.
Currency
Dinar (DHS)
Population
10 million
Capital City
Abu Dhabi
Minimum Wage
No specified minimum wage
Local Language
Arabic and English
Working Hours
48 hours per week maximum
Employer of record in the United Arab Emirates
When you hire in United Arab emirates, the Employer of Record acts as the legal employer for your workers, taking care of the entire employment life cycle. This includes handling all the legal legwork, such as payroll, taxes, mandatory benefits, employment contracts, and ensuring compliance with United Arab emirates labor laws.
- Manages all employment aspects
- Acts as a legal employer
- Simplifies hiring
- Compliantly employing a worker
How does an Employer of Record the United Arab Emirates work?
Agility
We handle the legal aspects of hiring workers, including managing HR, benefits, payroll, and taxes.
Company
Focuses on core business activities. Manages assigned employee’s tasks and performance.
Employee
Performs the assigned work, just like any other employee.
Payment Frequency
In the UAE, employees are typically paid on the last business day of the month. A 13th-month wage payment is not required.
Employee Tax – 0% to 5%
Foreign nationals are exempt from paying income tax in the UAE
UAE nationals pay 5% social security tax.
Employer Tax – 12.5% to 15%
Social Security: 12.5% (15% in Abu Dhabi)
Probation Period
The United Arab Emirates, it is common practice for probationary periods to last between three and six months.
Employment Law
Safe and Healthy Workplace
Employment Contract
Equal Treatment and Non-Discrimination
Whistleblower Protection (limited to certain sectors)
Reasonable Accommodation of Disabilities
Overtime Pay
End-of-Service Gratuity
Protection from Unfair Dismissal
No Forced Labor
Employee Termination
Termination can occur by mutual agreement, with notice, or without notice in cases of serious misconduct. The standard notice period is 30 days, regardless of the length of service, unless a different period is agreed upon in the employment contract.
Termination must follow proper procedures, and while there is no legal requirement for a disciplinary hearing, employers should provide a fair reason for dismissal, such as redundancy or misconduct, along with a written notice specifying the reason and date of termination.
Employees dismissed due to redundancy or at the end of their contract are entitled to an end-of-service gratuity, which is calculated based on 21 days of pay for each year of service for the first 5 years, and 30 days for each subsequent year.
Employee Benefits
Statutory Benefits
End-of-Service Gratuity: A lump-sum payment based on the employee’s length of service, calculated as 21 days of wages for each year of the first five years and 30 days for each subsequent year.
Compensatory Rest: For employees required to work on rest days or public holidays, they are entitled to additional compensation or a compensatory rest day.
Common Additional Benefits
Medical Insurance
Housing Allowance
Transportation Allowance
Performance Bonuses
Annual Flights
Education Assistance
Wellness Programs
Flexible Working Hours
Statutory Leave
FAQ
Think of it like this: Agility EOR becomes the legal employer of your employees, taking care of all the paperwork and compliance headaches.
Agility EOR
- We manage the onboarding process and ensure everything’s in order before your employee starts
- We make sure your employees are treated fairly and compliantly in their relevant territory
- We take care of all HR matters, and can answer any and all HR queries you may have e.g. maternity/paternity leave, holidays, sick pay, and more
- We provide compliant contracts, process local payroll, and file taxes
- We issue payslips and handle payments to the employee and authorities
Your Company
- You find and manage your employees’ daily tasks
- You support their development through their work
- You follow our guidance on employment laws and best practices
- You ensure payroll bills are paid to Agility EOR on time
Benefits of using an Employer of Record (EOR)
- Faster and easier hiring: No need to set up your own legal entity.
- Reduced risk and compliance burden: We handle the legal and administrative complexities.
- More time and resources: Focus on your core business while we manage your employees.
There are various ways to employ people in the United Arab Emirates, each with differing levels of costs and compliance:
Employee is employed by you and paid by you from your overseas Company
- Pros: It seems like the most straightforward and affordable choice.
- Cons: The employee is subject to United Arab Emirates employment legislation and is unable to make the legally required social security contributions.
Entity Set-up
- Pros: If you employ a large number of people — typically more than 15 — this may be the most economical choice.
- Cons: Creating a formal corporate structure and upholding stringent adherence to employment and tax laws in the United Arab Emirates can be expensive and time-consuming, particularly for smaller businesses. This strategy frequently proves unworkable for companies with fewer than 15 employees.
Using an Employer of Record
- Pros: In the United Arab emirates, utilizing an Employer of Record service proves to be the most time-and-cost-effective solution for managing payroll, HR, and compliance tasks, particularly for establishing employer-employee relationships with teams smaller than 15 individuals.
- Cons: Costly when hiring a large number of employees. Knowing which Employer of Record provider to choose can be difficult.
Hire a contractor in the United Arab Emirates
- Pros: When the employee isn’t contracted to your business, this approach works well because it gives you the option to send a stand-in for them on their days off.
- Cons: In the United Arab Emirates, hiring a full-time employee who is exclusively committed to your business without the appropriate employment categorization is illegal. Such misclassification may result in fines or even criminal prosecution.
Yes, provided that the employee has other jobs, has the independence to choose how to complete tasks, and has the ability to choose a substitute contractor for when they are not available. An employee in the United Arab Emirates is an individual who works only for your company and whose responsibilities are set by your company. Employment legislation in the United Arab Emirates is broken if this isn’t done.
Under the United Arab Emirates, misclassifying an employee may result in hefty fines, unpaid holiday pay and social security contributions, the requirement to create a local presence, or even legal action from the employee for violation of their job rights.
Securing a trade license from the appropriate authorities and registering your company with the Commercial Register are the first stages in starting a business in the United Arab Emirates.
Despite the initial registration process seems straightforward, there are additional complexities to the setup process, such as setting up a physical office for tax purposes, opening a bank account in the United Arab Emirates (which frequently requires in-person presence), managing payroll software compliant with United Arab Emirates regulations, and achieving tax filing obligations.
Employing individuals in the United Arab Emirates requires observing certain regulatory requirements. Put more simply, HR compliance guarantees that your business adheres to all employment and work practice laws. However, why is it so crucial?
HR compliance in the United Arab Emirates protects your company and your employees, going beyond simple paperwork. Adhering to employment laws ensures that your employees receive equitable treatment, including minimum salary, yearly leave, sick leave, and suitable working hours. This reduces the possibility of financial penalties, legal ramifications, and even litigation resulting from non-compliance, in addition to creating a healthy work atmosphere.
Tax and social security duties are made simpler when Agility EOR is partnered with you as your Employer of Record in the United Arab Emirates. We handle all employee-related files and contributions, guaranteeing full compliance, so you may worry-free concentrate on operating your company.
The day-to-day management and communication with your team, including handling performance issues, enforcing disciplinary actions when needed, and cultivating a positive work environment through open communication, remain the responsibility of your company. Agility EOR takes care of the complexities of employment law and compliance in the United Arab Emirates.
Agility EOR handles the legal side of things in the United Arab Emirates , so you can focus on managing your team and their daily tasks.
The UAE’s tax structure is highly favorable, especially for expatriate workers.
Employees do not pay personal income tax, but employers must contribute 12.5% of gross salary to social security for UAE nationals, with employees contributing 5%. Expatriates are exempt from social security contributions but are entitled to an end-of-service gratuity based on their length of service.
Workers who are covered by a regular employment contract and legal safeguards are provided by their Employer of Record in the United Arab Emirates. This covers relevant tax credits as well as statutory benefits including maternity leave, yearly leave, and sick pay. It’s crucial to remember that everyone living in the United Arab Emirates, not just employees, is covered by the public healthcare system.
Agility EOR handles the administrative burden of HR compliance for you:
Trusted Partners: Top United Arab Emirates employment attorneys and experts work together with Agility EOR. This guarantees that all local legal requirements are strictly followed by your employment contracts and other important paperwork.
Comprehensive Understanding: We keep up-to-date knowledge of all the nuances of employment law in the United Arab Emirates, including rules pertaining to remote work, payroll, social security, and data protection.
Quick Action: Our internal team is available to help and support you as soon as a problem develops.
Wondering if expanding in the United Arab Emirates is right for you?
Read on or speak to a member of our team now
United Arab Emirates Employer of Record Benefits
When you choose Agility EOR to expand in the United Arab Emirates, we guarantee an EOR Service tailored to the needs of your business
Compliance
We are on top of regulatory changes in the United Arab Emirates so you can relax.
Cost reduction
Allow our economies of scale to work in your favour.
High Service Levels
You and your employees have a dedicated account manager.
Fixed Cost Pricing
We will agree our professional fees up front based on your needs – no nasty surprises!
Consolidated Invoicing & Payments
Make one monthly payment to cover all your tax, social and wages costs from one to one thousand employees.
Fast delivery
You can have 'boots on the ground' within days on our infrastructure.
Reduced Risk
All wage taxes are remitted in full to the the United Arab Emirates authorities by professionals ensuring liabilities are met, giving you peace of mind.
Supply Chain Transparency
We only pay employees through local full employed solutions meaning the United Arab Emirates payroll tax is paid on all funds.
Save Time and Money
Our expertise is at your disposal. The need for you to have internal HR, Payroll and admin staff is eliminated.
Download our full United Arab Emirates Employment Guide
Find out all about employing in the United Arab Emirates
Get in touch
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