Hiring in United Arab Emirates

The terms set out role, salary in AED split between basic pay and allowances, working time, leave, notice and any restrictive covenants. The EOR is the counterparty to the employee, which is what removes the need for your own entity.

Contracts use the MOHRE standard form in Arabic and English, and the Arabic text prevails in a dispute. DIFC and ADGM run their own employment law, so check which regime the EOR's entity sits under.

Every contract is fixed-term by law, but there is no maximum term and renewal is routine, so in practice most behave like open-ended contracts.

Set probation from day one. It is capped at 6 months and can be used only once with the same employer, so there is no extension. An employee leaving during probation owes 14 days' notice, or a month if joining another UAE employer.

Some EORs shorten probation as policy because they, not you, carry the dismissal risk. Ask before you agree a start date.

Overtime is paid at basic pay plus 25%, rising to 50% between 10pm and 4am, and is capped at two extra hours a day.

The exclusion covers supervisory roles that carry employer powers, not professionals generally, so a senior individual contributor can still qualify. Put the position in writing either way.

The statutory 30 days is also the market norm for professional roles, so budget for it in full. In the first year, leave accrues at 2 days a month once the employee passes six months.

Sick leave runs to 90 days a year after probation, split between full pay, half pay and unpaid. Maternity leave is 60 days and parental leave 5 working days, both funded by the employer with no state reimbursement, so treat them as a salary cost.

Either side may terminate on notice or pay in lieu. Gratuity is owed whatever the reason for leaving once the employee completes a year: 21 days' basic pay per year for the first five years, then 30 days, capped at two years' total pay.

The EOR runs the process as the legal employer and will want the paperwork in order, including final pay, gratuity, unused leave and visa cancellation. Arbitrary dismissal claims can cost up to three months' pay, so keep a documented reason.

Health insurance has been mandatory and employer-paid in every emirate since January 2025. Unemployment insurance is compulsory too, but the employee pays for it. Richer medical plans, dental and group life are standard for professional roles, well above the basic package.

EORs often bundle benefits through a group scheme. Ask what is included in the fee and what is billed on top.

Expatriate hires attract no employer social contributions, but gratuity accrues at roughly 5.8% of basic pay a year and health insurance sits on top. Employer pension contributions of 12.5% to 15% apply to UAE national hires. That is before the EOR fee.

Salary structure is the trap. Gratuity and overtime are calculated on basic pay only, so the split between basic and allowances drives the cost. Agree it before the offer goes out.

Since June 2026, any payment after the 1st counts as late, and new work permits can be suspended from day five. Ask how the EOR funds payroll if your invoice is paid late.

Ask whether the EOR sponsors directly or refers to a partner. A partner-model EOR often cannot sponsor at all, and visa quotas and Emiratisation targets apply to the sponsor, not to you.

Mainland and free zone sponsors face different rules on where the employee may work, so check the set-up against the role. Set start dates after approval, not before.

Get the data processing terms in the service agreement, not just the privacy notice. Cross-border transfers need a lawful basis, and the federal law's implementing regulations have been slow to arrive, so expect the detail to shift.

Ask where payroll data is hosted and who in the partner chain can see it.

Setting up a mainland or free zone company is quick, but the running cost is the point: annual licence renewal, an office lease that sets your visa quota, audited accounts in most free zones, corporate tax filings and visa administration set an annual floor.

Permanent establishment risk is about what people do, not where payroll sits. With 9% corporate tax in force since 2023, revenue-generating activity can create exposure regardless of the employment route.