Cost of Employment in UAE

Cost of Employment in UAE



Cost of Employment in UAE

Presently there are NO employer taxes in the UAE. However, the costs you need to take into account include:


Item

Cost

Comments

Work Permit 

Employee – USD 5,750
Each dependent – USD 3,500

The cost includes lawyers cost, govt. fees, and disbursement (translations, notarisations, etc)

Private Medical Insurance 

Basic – USD 1,250/year (est.)
Higher – EUR 4-5K/Year (est.)

 

Gratuity / End of Service Benefit (‘EOSB’) 

Under 1yr => No EOSB
Above 1yr, under 5yrs => 21 days for each year
Above 5yrs => 30 days for each year above the first 5

Allowances are not included in the calculation of the EOSB

Annual Leave 

30 calendar days/year 

 

Flights 

See comments

If a foreign employee is terminated, the employer is required to pay his/her return flight ticket to their home country


Common Benefits
  1. Given the calibre of professionals one maybe looking to hire, it is recommended that you include the following elements:
  2. Flights: Arrival and return; and 1 roundtrip flight for every 12 months of service
  3. Housing allowance: probably between AED 8-18K/month, depending on the size of the household. Comment: a deposit/upfront payment is not uncommon, and the employer is typically expected to advance this on account of the housing allowance.
  4. Transportation allowance: between AED 5-10K for the mid-high level employees (decent family-sized car). The Top senior people/executives, and professionals who travel frequently outside the city would need a 4x4 car, which would cost between AED 10-20K/month.
  5. Childcare/school fees – only for the very senior people, cost depends on age of kids, rough estimate between USD 15-25/year per kid.
  6. One-off relocation bonus – not everyone pays it, but the companies who do, typically pay between USD 4-8K

 Allowances vs Base Pay

Allowances do not count towards employees’ EOSB, so we recommend to specifically separate between Salary and Allowances.

Comments

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