EOR Service in UAE

Hire, Onboard and Pay Employees in UAE Quickly and Efficiently

Hiring in UAE at a glance

CURRENCY
United Arab Emirates Dirham (AED)
working hours
48 hours per week.
public/bank holidays
15 days
capital
Abu Dhabi
language
Arabic
date format
DD/MM/YYYY
remote workers
1.2M
tax year
1 January - 31 December
minimum hourly salary
No minimum wage
CURRENCY
United Arab Emirates Dirham (AED)
working hours
48 hours per week.
public/bank holidays
15 days
capital
Abu Dhabi
language
Arabic
date format
DD/MM/YYYY
tax year
1 January - 31 December
payroll frequency
Monthly
GDP
$507.53 billion USD (2022)

Employer of Record in UAE

For employers looking to operate in the United Arab Emirates (UAE), establishing a business and hiring local talent can be complex. As an employer, you'll need to navigate the intricacies of acquiring necessary licenses and work permits, crafting legally sound employment contracts, considering real estate options for your operations, and ensuring compliance with payroll and tax regulations. 

An EOR in the United Arab Emirates, like Gloroots, can help you easily navigate these challenges and quickly expand your business.

Why use UAE EOR?

If you're wondering about the role of an EOR or a Professional Employer Organization (PEO) in the UAE and whether your business needs one, here are the answers to your questions.

Businesses partner with a UAE Employer of Record for  two reasons: 1) To avoid setting up an entity and 2) To hire local talent in adherence with compliance.

And rightly so, because incorporating your business in the UAE can cost you anywhere between AED 17,000 and AED 50,000. These costs can be averted with an EOR. When partnering with an EOR, employers can use the EOR’s local entity to onboard local talent, negating the need for new entities. 

Secondly, UAE’s labor laws are vastly different from their US and UK counterparts. For example, the UAE standard workweek is Sunday to Thursday, with a maximum of 48 hours per week, different from the UK's Monday to Friday standard. Unlike many countries where gratuity payments are longer, UAE labor laws mandate that employers must offer gratuity pay for employees who complete one year or more of continuous service.

Navigating these complex laws can stump even experienced global employers, leading them to penalties and fines. Particularly, employers who hire contractors, without the knowledge of UAE’s labor laws, can fall into the employee misclassification trap. 

A UAE-based EOR can eliminate these hurdles and help you handle payroll, administer employee benefits, report expenses, maintain employee leave records, and manage timesheets.

EOR Costs in UAE

The pricing structure for UAE EOR/PEO services usually involves a monthly fee per employee or a percentage of the employee's salary. Extra charges may apply for additional services or customization.

Gloroots offers you EOR services for fixed fee. Such a predictable structure can help you plan your hiring budgets better. With gloroots, there are no hidden fees, whatsoever.  

Key Metrics For Foreign Employers 

The UAE ranks 22nd globally for talent competence in INSEAD’s Global Talent Competitiveness Report. The country is touted to be a leading provider of technology skills in the AMEA region. 

The table below depicts key indicators from the Global Talent Competitiveness Report for employers wishing to hire from the UAE.

Factors Global Ranking Interpretation
Rule of law 35 Indicates effectiveness of law enforcement
Labour-employer cooperation 15 Indicates positive labor-employee relationships
Reading Maths, and Science 46 Indicates average scores in OECD's survey of 15-year old students

University Ranking 34 Indicates average QS rankings
Labour productivity per employee 13 Indicates total output by the total labor input used to produce that output
Ease of finding skilled employees 17 Indicates findability of skilled talent
Workforce with tertiary education 29 Indicates % of the workforce with PG degrees
Digital Skills 3 Indicates prevalence of advanced digital skills in the population

Source: The Global Talent Competitiveness Index 2023

Through the Gloroots’ Recrew platform, you can discover amazing talent in the UAE.

Why work in UAE?

What’s a Rich Text element?

The rich text element allows you to create and format headings, paragraphs, blockquotes, images, and video all in one place instead of having to add and format them individually. Just double-click and easily create content.

Static and dynamic content editing

A rich text element can be used with static or dynamic content. For static content, just drop it into any page and begin editing. For dynamic content, add a rich text field to any collection and then connect a rich text element to that field in the settings panel. Voila!

How to customize formatting for each rich text

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Grow your team in UAE

Growing your team in the UAE requires making strategic hires at the right time and placing them in appropriate positions. Expanding in the UAE comes with its own set of challenges, including compliance, payroll, tax, and benefits management. At Gloroots, our global Employer of Record (EoR) service can alleviate these complexities, ensuring compliance and enabling you to concentrate on what truly matters: your employees and business expansion. Partner with us to simplify the process and succeed in the dynamic UAE market.

Risks of misclassification

Employee misclassification pertains to the incorrect labelling of workers as independent contractors and exempting them from specific benefits, when they should legally be considered employees with rights. 

Engaging a PEO/EOR like Gloroots effectively mitigates these risks. We  guarantee adherence to labor laws, precise worker classification, streamlined payroll management, and employee benefit provisions, enabling employers to focus on their core business activities. When you delegate these tasks to seasoned experts, you ensure a smooth and compliant hiring journey through the UAE labor landscape.

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Avoid hefty penalties with Gloroots.

Use our free employee misclassification risk calculator to estimate your risk level.

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Employing in UAE

What’s a Rich Text element?

The rich text element allows you to create and format headings, paragraphs, blockquotes, images, and video all in one place instead of having to add and format them individually. Just double-click and easily create content.

Static and dynamic content editing

A rich text element can be used with static or dynamic content. For static content, just drop it into any page and begin editing. For dynamic content, add a rich text field to any collection and then connect a rich text element to that field in the settings panel. Voila!

How to customize formatting for each rich text

Headings, paragraphs, blockquotes, figures, images, and figure captions can all be styled after a class is added to the rich text element using the "When inside of" nested selector system.

Tax

Tax and Social Security contribution

Employer Payroll Contribution

Payroll Tax Rate Description
Social Security 12.50 % In the UAE, social security comprises a basic component and a housing allowance, with a minimum monthly contribution of 1,000 AED and a maximum of 50,000 AED.
In this system, the government contributes an additional 2.5%, resulting in a total social security contribution of 20%.
In Abu Dhabi, which applies a higher rate of 26%, the breakdown is as follows: the employer contributes 15%, the government contributes 6%, and the employee contributes 5% towards social security.

Employee Payroll Contribution

Payroll Tax Rate Description
Social Security 5.00 % Social security, which encompasses both basic social security and a housing allowance, is applicable exclusively to Emirati nationals. Expatriates are not required to make these contributions.

Employee Income tax

There is no tax on personal income.

Separation

Either the employer or the employee can end employment for valid reasons. This requires written notification with the appropriate notice period. Valid reasons can include issues with performance, behavior, job redundancy, financial difficulties like bankruptcy, and if the worker doesn't renew their work permit.

Severance Pay

An employee becomes eligible for severance pay after completing a full year of service. The severance pay is calculated as follows: 

  • 21 days' wage for each year worked during the first 5 years of service 
  • 30 days' wage for each year beyond 5 years 

If the employment is less than a full year, the severance pay is prorated accordingly. For foreign employees, the severance pay is capped at two years' wage. The calculation is based on the employee's last basic wage.

In cases where the reason for termination is not recognized by UAE law, the employee may be entitled to an additional compensation of 3 months' pay. Even with recent changes in labor laws, employees who resign (provided they have worked for at least one year with the employer) are entitled to their full End of Service Gratuity (EOSG), and this also applies to employees terminated for serious misconduct.

Notice Period

Employment Length Notice Period
1-5 months 2 weeks
Up to 5 years 1 month
5+ years 90 days
  • If an employee resigns during the probation period to join another UAE-based company, they must provide a 30-day notice.
  • Foreign workers leaving the UAE need to give a 14-day notice.

Probation period

The probation period cannot extend beyond 6 months. While on probation, either the employer or the employee must provide a minimum notice of 14 days if they wish to terminate the employment. If an employee intends to join another company within the UAE, they are required to provide at least 30 days' notice. Furthermore, employers have the option to seek compensation from the new employer to cover the costs incurred in hiring the employee.

Start Hiring in UAE today

When hiring globally, ensuring compliance comes with its own set of battles. Employers must ensure all hiring and onboarding activities adhere to employment laws, payroll procedures, DE&I compliance, GDPR and similar data protection, etc. If you think it is hard to set up local entities and start hiring, keeping up with a dynamic compliance landscape is far harder. 

Gloroots helps you minimize all these efforts by providing a single window to manage all these tasks. Our in-house experts fully shield you from cross-border employment and payroll compliance risks. We do this by helping you generate employment contracts, on-time payments, compliant benefits, while you focus only on screening talent. 

Our promise is a stress-free global employment experience for both you and your employees.

Contact our experts today to kickstart your global hiring campaign.

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