Employee Benefits UAE: A Comprehensive Guide to Employment Perks and Compensation

Employee Benefits UAE includes government-mandated benefits, Employment perks, and optional add-ons that firms can provide to UAE locals and expats in the Middle East’s economic superpower. A generous benefits package can help you stand out from the competition and hire the best individuals in your business, as 92% of employees believe benefits are essential for overall job happiness, productivity, and retention. Offering competitive pay is vital in attracting top talent, but it is not the only factor prospective workers consider when deciding where to work.

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Employee Benefits UAE

If you are recruiting or want to hire remote employees in the UAE, you must be familiar with the laws and regulations that regulate employment contracts and employee perks. The UAE Labor Law (Federal Law No.8 Organization of Labor Relations, 1980) was updated in February 2022 by Federal Decree-Law No33, establishing the mandatory benefits employers must provide employees.

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Employee Benefits in the UAE: A Legal Overview

The Federal Decree-Law No 33, popularly known as the New Labor Law, applies to all private enterprises but not to the employees listed below:

• Officers and employees of federal and local governments.
• Armed forces, law enforcement, and security personnel.
• Workers are covered under DIFC (Dubai International Financial Centre) Employment Law No. 2 of 2019 and ADGM (Abu Dhabi Global Market) Employment Regulations 2019.

The DIFC and ADGM employees are not subject to UAE employment laws because the Free Trade Zones have legal systems and employment regulations that govern everything from hiring foreigners to minimum pay, health and safety, and contract termination.

Take a look at: UAE Industry Trends

UAE Mandatory Employee Benefits

Unless they engage with an Employer of Record (EOR) organization, international enterprises wanting to hire in the UAE must create a legal corporation in one of the Emirates to operate within the necessary statutory framework. Consider the mandatory benefits that all employers in the UAE are required to provide.

Annual Leave Entitlement

Employees with more than one year of service are entitled to 30 days of annual leave per year, while those with six to twelve months of service are entitled to two days for each month worked. Employees can take time off whenever they choose, but they must give at least one month’s notice if they want to depart.

It is crucial to note that public holidays and sick leave days that come within the holiday season are included in the UAE’s yearly leave allocation. Employers can decide whether to enable employees to carry unused leave into the following year if they have unused leave days at the end of the entitlement year.

The Sick Leave

Employees are entitled to a maximum of 90 days of sick leave each year, continuously or in portions, as long as a medical certificate is provided within three days after leaving work. Employees on sick leave receive full pay for the first 15 days, half for the following 30 days, and no for the last 15 days. If a probationer takes sick absence during their trial time, they will not be paid.

Parental Leave

The New Labor Law establishes minimum entitlements for women working in the private sector:

• Forty-five days of full pay + 15 days of half pay, with no minimum qualifying term.
• Women in the public sector who work in government departments are eligible for 90 days of paid maternity leave.
• A woman’s employment cannot be terminated while pregnant or after disclosing her pregnancy to her employer.
• When a pregnant woman becomes ill, she is entitled to an additional 45 days of unpaid leave.
• If the kid is disabled, the mother is entitled to an additional 30 days of paid and unpaid leave.
• If a female employee has worked for the company for at least six months, she is entitled to full maternity leave for stillbirth at any point of the pregnancy.
• Fathers are entitled to five working days of pay, which can be taken whenever they like during the first six months after birth, consecutively or not.

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Primary Employee Benefits in the UAE

Within 14 days of termination of employment, the employee is entitled to all essential subscription amounts paid by the employer and any returns coming from it during the subscription period. He can also choose to continue investing in the scheme. Employees may withdraw a portion or all of their voluntary contributions or investment returns at any point during their employment, subject to the fund manager’s rules.

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The Scheme Under Supervision

According to the appropriate legislation, MoHRE and SCA monitor, manage and examine the alternative system. The MoHRE accepts labor complaints concerning this alternative system and examines complaints and breaches detected during inspections. SCA will investigate complaints about the performance of investment fund service providers. Authorities in financial-free zones supervise and address concerns about the alternative end-of-service benefits system with social security benefits fund and benefits valuation services.

Take a look at: UAE labor law

End of Service Gratuity

The service termination Gratuity is a statutory monetary right that employees must receive from their employers upon termination of their employment contract if they are qualified.

If an employee has been with the company for more than a year but less than five, they are entitled to 21 days’ pay for each year of service. They receive 30 days’ income for each year of employment after the first five years if they have been with the company for more than five years. The new law requires that:

• All end-of-service benefits must be paid within 14 days of the termination of employment.
• Employee contracts can only be canceled if end-of-service benefits (EOSB) are paid.

Read more: Annual Leave Entitlement UAE

Additional Benefits Employers in UAE

The following are additional advantages to consider in your employee benefits programs. At the same time, they are not needed by UAE law; they can make your organization a more appealing employer:

• Health coverage.
• Life insurance.
• Pension programs and retirement benefits.
• 13th month’s pay.
• Employee support services are available.
• Working hours are flexible.
• Additional vacation days.
• Work authorization.
• Memberships to a gym.
• Programs for health and wellness.

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Employee Rights Under UAE Law

Although benefits are not strictly offered, it is critical to understand the legal safeguards to protect benefits for employees and jobs in the UAE. Among them are the following:

• Discrimination based on race, color, gender, religion, national origin, ethnic origin, or disability is prohibited under the law.
• The New Labor Law of 2020 included clauses requiring equal compensation for equal work for men and women.
• Employees may not be harassed, bullied, or subjected to verbal, physical, or mental aggression under the law.
• Employers must give employees protection.

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UAE Employee Benefits Trends & GCC

Employee perks in the UAE and GCC can give businesses a competitive advantage in attracting and maintaining top talent. The UAE and GCC job markets continuously evolve, with a growing demand for competent labor. Employee perks have emerged as a significant aspect of attracting and maintaining top personnel in this competitive landscape.

According to a recent Willis Towers Watson report, 73% of businesses in the UAE and GCC seek to improve their employee benefit programs. According to the survey, the most in-demand financial benefits are:

• Salary advances, access to investment accounts, ESOPs, and long-term incentive schemes are examples of financial perks.
• Benefits for health care.
• Advantages for health.
• Opportunities for advancement in one’s career.

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Ideal Employee Benefits in Dubai 2024

As part of the UAE, international company growth in Dubai allows enterprises to access new markets, acquire a competitive advantage, and boost income. To compete in the UAE, businesses must attract top talent and keep their employees happy. As a result, many firms in Dubai are glad to provide additional employee benefits in addition to those required by law.

Full compliance with local labor regulations necessitates expertise in employer responsibilities and the systems to manage HR tasks effectively. As an employer in the UAE, you must be able to handle all employee benefits in Dubai while also adhering to local benchmarks to provide good optional benefits.

Take a look at: UAE Cartography

Mandatory Employee Benefits in Dubai

Labor regulations in Dubai compel firms to give certain employee benefits to comply with local requirements and avoid fines or penalties for noncompliance. Many of these national criteria apply only to Emiratis and those with residency. Private alternatives are more common for many international employees. In Dubai, the following are mandatory employee benefits:

• Benefit from retirement.
• Medical insurance coverage.
• Unemployment compensation.
• Workplace injury and disability insurance.
• Maternity leave.
• Wage Standards.

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The Cost of Hiring an Employee in the UAE

With the remote working trend, firms worldwide seek top-tier remote talent outside corporate headquarters. If you want to develop abroad, the United Arab Emirates (UAE) is an ideal choice because of its brilliant workforce in information technology, financial services, engineering, and sales.

When hiring talent from the UAE, salaries aren’t the only monetary consideration to factor into your budget. It is crucial to consider the costs of setting up an employment package, including taxes, social security contributions, overtime and vacation pay, stipends, and benefits.

This comprises both required and optional fees, allowing you to increase your global presence without increasing recruiting costs. The following are the primary hiring costs in the UAE around the world:

• The gross salary of the employee.
• Benefits and taxes.
• Pay for vacation and other leaves.
• Overtime pay is available.
• Pay of severance.
• Benefits, bonuses, and extras are optional costs.

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UAE Mandatory Costs of Hiring

When employing remote, UAE-based personnel, mandatory hiring costs are non-negotiable expenses. Keeping accurate records of salary, taxes, overtime, and vacation pay is critical. Otherwise, you risk violating local labor laws and regulations.

The UAE boasts a broad pool of skilled individuals in an economy that has embraced new technology, such as artificial intelligence and cryptocurrencies. It is a well-known hub for banking, trade, travel and tourism, and hospitality. There is no established minimum salary for non-citizens. Their level of education determines the minimum wage for citizens:

• College degree or higher: 5,000 AED (USD 1,361.32).
• High school certificate: 4,000 AED (USD 1,089.06).
• No high school certificate: 3,000 AED (USD 816.79).

However, salaries will vary significantly between industries and job kinds; therefore, it is prudent to give competitive compensation to attract top-tier UAE talent to your organization.

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Supplemental Hiring Costs in the United Arab Emirates

When the entire world is your competitor, it pays to entice new and existing employees with enticing supplemental benefits such as medical, dentistry, vision, life insurance, retirement savings plans, and other stipends and incentives. When you provide appealing additional benefits, you raise morale and increase retention, which decreases onboarding costs and helps you build a solid and reliable remote staff.

According to Asinta, the global benefits company, UAE employers’ most popular supplementary benefits are insurance for death, disability, and retirement plans. The average cost of hiring one employee in the UAE is based on a $100,000 pay. This salary is intended to make calculating average costs easier and does not represent actual average salaries in the country. The real wage will depend on your hiring objectives. The Average Mandatory Cost of Hiring One Employee in the UAE (Annual in USD):

• Salary: USD 100,000
• Employer Taxes: USD 12,500
• Total: USD 112,500

Read more: UAE work benefits

Employee Benefits UAE, considering all the accompanying expenditures, growing your remote, global team, and hiring UAE talent can seem daunting. Employer of Record (EOR) will handle all administrative tasks, maintaining compliance and saving you money so you can focus on developing your business.