Employer of Record UAE: A Comprehensive Guide on Employer of Record 2025

If you are planning to expand your business into the UAE, navigating the complex landscape of labor laws and tax regulations can prove to be a significant challenge. The UAE has distinct compliance frameworks for onshore and free zone entities, and understanding these differences is critical before onboarding any new talent. To ensure seamless business operations and avoid costly missteps, relying on a third-party solution becomes not just smart, but essential. Partnering with an Employer of Record (EOR) service provider can significantly simplify your expansion strategy. This approach allows you to focus on core business growth while the EOR partner manages legal compliance and local HR intricacies. Keep reading this blog to learn more about Employer of Record Services UAE and discover how working with an EOR can help you cut operational costs and reduce expansion risks as you grow your business across the Emirates.

Table of Content

• Overview about UAE
• What is an Employer of Record in UAE
• Employer of Record vs Legal Entity
• What are the Use Cases for Availing of Services Under Employer of Record UAE?
• Laws and Compliance Best Practices to Hire Employees in UAE
• Best EOR Companies in UAE
• What are EOR Services in UAE
• How to Hire Employees Through an EOR UAE Partner
• Taxes in UAE
• Salary Cost Calculator for Hiring Employees in UAE
• Key Considerations While Hiring Employees Through EOR in UAE
• Terminations in UAE
• What are the Key Steps Involved in Terminating Employees in UAE?
• How to Choose the Right EOR UAE Services?
• Benefits of Working With an Employer of Record (EOR) Service Provider in UAE
• Visa Types in UAE
• Risks or Drawbacks of EOR UAE
• How Does Employer of Record UAE (EOR) Differ From Usual HR Software?
• How Much Does it Cost to Avail Services Under EOR UAE?
• Conclusion: EOR UAE
• FAQS

Overview about UAE

The United Arab Emirates (UAE), with its strategic geographic location and investor-friendly ecosystem, has emerged as a gateway to the Middle East and North Africa (MENA) region for businesses seeking global expansion. The UAE is known for its diversified economy, offers numerous free zones, and imposes zero corporate tax on many entities. However, the UAE’s dual legal frameworks—mainland and free zone—and its unique employment laws can be complex to navigate, making Employer of Record (EOR) services a highly effective option.

What is an Employer of Record in UAE

An Employer of Record (EOR) in the UAE is a specialized third-party provider that becomes the legal employer of a company’s workforce in the country. The EOR handles all administrative and compliance-related responsibilities such as visa sponsorship, payroll, and adherence to UAE labor laws. This enables businesses to onboard talent in the UAE swiftly and legally, without needing to set up a local entity or navigate the complexities of labor regulations themselves.

Employer of Record vs Legal Entity

Criteria	Legal Entity	Employer of Record (EOR)
Definition	A legal entity is a business that is officially registered in the UAE (mainland or free zone) and can directly hire employees.	An Employer of Record (EOR) is a third-party partner that legally employs talent on behalf of another company while ensuring compliance.
Ownership	Fully owned and operated by the registering business or its shareholders.	The EOR is the legal employer, while the client maintains day-to-day operational control.
Employment Contracts	Contracts are executed directly between the employee and the legal entity, based on UAE labor laws.	The EOR issues contracts and ensures they meet local labor requirements while aligning with the client’s operational needs.
Compliance Responsibility	The legal entity is responsible for all aspects of UAE labor, immigration, tax, and health insurance compliance.	The EOR ensures all employment and immigration compliance is met, reducing the client’s legal exposure.
Payroll & Benefits Management	Payroll, end-of-service benefits, and health insurance must be managed by the company under UAE rules.	The EOR administers payroll, benefits, and other statutory obligations on behalf of the client.
Tax Liabilities	Mainland entities may be subject to new corporate tax laws; compliance is handled internally.	The EOR assumes responsibility for employee tax handling, if applicable, ensuring up-to-date compliance.
Time to Set Up	Setting up a UAE entity can take several weeks and may involve local sponsorship, licensing, and office lease requirements.	The EOR setup process is rapid—typically within a few days—leveraging existing licenses and infrastructure.
Employee Onboarding	Requires in-house HR systems, visa processing knowledge, and ministry approvals.	The EOR manages onboarding, including visa processes, contracts, and labor department registration.
Employment Law Expertise	Requires local legal and HR advisors to stay updated on changing laws, especially regarding visa categories and insurance.	The EOR brings deep expertise in local employment laws, providing a turnkey solution.
Risk & Liability	The company is liable for employment disputes, fines, or visa violations under UAE law.	The EOR takes on the employment-related liabilities, offering legal protection to the client.
Control Over Workforce	The company has direct and complete authority over employee activities and management.	The client manages employees operationally; the EOR handles only the legal employment framework.
Flexibility	Lower flexibility, especially when transitioning between free zones or mainland regulations.	High flexibility, ideal for short-term projects, quick scaling, or testing market entry.
Cost & Investment	Requires upfront capital for licensing, visas, office space, and administrative setup.	More cost-efficient, avoiding the need for local incorporation or fixed infrastructure.
Global Expansion	Requires local registration and licenses in every country of expansion, adding time and complexity.	Enables fast UAE market entry and broader Middle East hiring without setting up a UAE legal entity.

Suggested Read: EOR- A Detailed Guide on Employer of Record 2024

Choose Between an EOR UAE Partner and a Legal Entity

Legal Entity in UAE
Establishing a legal entity in the UAE requires choosing between mainland or free zone setups, registering with relevant authorities, and securing trade licenses and office space. While this approach grants full control over operations, it demands substantial investment in local infrastructure, visa processing, payroll systems, and an in-depth understanding of UAE labor regulations.

On the other hand, partnering with an EOR UAE provider offers a smooth market entry with minimized compliance risks and administrative burden. Businesses can utilize EOR services in the UAE to efficiently manage hiring, payroll, visas, and labor law compliance—without needing to establish a physical or legal presence.

What are the Use Cases for Availing of Services Under Employer of Record UAE?

1. Business Expansion Without a Legal Entity

For international businesses, entering the UAE market involves navigating a complex dual framework of mainland and free zone jurisdictions. An Employer of Record (EOR) allows companies to begin operations without setting up a legal entity. The EOR serves as the official local employer, managing payroll, visas, and labor compliance while the company concentrates on strategic growth.

This is particularly advantageous for:

• Startups exploring market potential in the Gulf region.
  
• Multinationals executing short-term projects in the UAE.
  
• Companies seeking fast, low-risk market entry strategies.
  

2. Offering Full-time Employment to Contractors or Freelancers

Many companies initially engage UAE-based professionals as contractors to avoid complex immigration and licensing procedures. When a company transitions a worker to full-time employment, the EOR handles legal contracts, administers benefits, and sponsors visas. This enables a compliant and smooth employment transition within UAE law.

3. Recruiting Talent Globally

The UAE is a global business hub that attracts talent from across Asia, Africa, and Europe. An EOR facilitates cross-border recruitment by handling work permits, residency visas, and employment contracts. Businesses can build multinational teams while avoiding the burden of operating separate legal entities across different emirates or zones.

Laws and Compliance Best Practices to Hire Employees in UAE

The UAE labor market is governed by both federal labor laws and zone-specific regulations. Proper compliance is essential to avoid penalties and legal disputes. Here are key areas to focus on:

• Understanding UAE Labor Laws: Employers must comply with Federal Decree-Law No. 33 of 2021 and free zone-specific rules such as those of DIFC and DMCC. These govern employment contracts, work hours, end-of-service benefits, and employee rights.
  
• Taxation in UAE: While there is no personal income tax, businesses must adhere to corporate tax and VAT regulations where applicable. EORs help ensure that businesses comply with UAE’s evolving tax landscape.
  
• Employee Benefits in UAE: Mandatory benefits include health insurance, paid leave, and end-of-service gratuity. An EOR ensures these are applied accurately and in line with the law.
  
• Contract Structuring: All employment agreements must be in Arabic or bilingual and compliant with UAE labor policies, including termination clauses, notice periods, and dispute resolution mechanisms.
  

Best practices include maintaining digital records, regularly auditing HR processes, and working with a knowledgeable EOR to navigate legal changes.

Best EOR Companies in UAE

Partnering with a reliable EOR is crucial to success in the UAE. Leading providers offer expertise across both mainland and free zone jurisdictions and manage everything from visa processing to payroll. Explore the best EOR companies in the UAE to find a partner aligned with your scale, budget, and industry.

What are EOR Services in UAE

Payroll Management

Payroll in the UAE requires strict compliance with WPS (Wage Protection System) regulations. EOR providers ensure timely and accurate salary processing, statutory deductions, and compliance with government reporting requirements. They also manage end-of-service gratuity calculations and ensure payroll transparency.

Employee Onboarding

The onboarding process in the UAE includes visa issuance, medical testing, Emirates ID registration, and compliant employment contracts. EORs handle this from start to finish, ensuring a smooth and timely integration for new hires and meeting all government requirements.

HR Administration

EORs manage HR functions such as leave tracking, records management, and performance documentation. Their systems often include cloud-based self-service platforms, allowing employees to access personal records, payslips, and benefits information, ensuring operational efficiency and transparency.

Equipment Procurement and Management

For remote or hybrid UAE teams, EORs assist in sourcing and distributing work tools such as laptops and mobile devices. They also manage the logistics of hardware return during employee offboarding, reducing administrative load for the business.

EOR UAE Services

Compliance and Legal Support

EORs offer deep expertise in UAE labor laws and help businesses comply with federal laws and free zone-specific policies. This includes managing employment contracts, visa renewals, and labor inspections while minimizing legal risks and administrative workload.

Taxation and Statutory Compliance

Though the UAE does not levy personal income tax, corporate and VAT laws apply under certain conditions. EORs stay up to date on regulatory developments, ensure accurate filings, and help businesses remain compliant with federal tax and zone-based financial rules.

Employee Insurance and Benefits Administration

EORs handle statutory health insurance enrollment and optional benefits like life and travel insurance. They ensure packages are culturally appropriate and legally compliant, supporting employee wellbeing and aiding talent retention.

Risk Management and Insurance

EORs mitigate employment-related risks including wrongful termination claims, visa fines, or labor disputes. They act as the legal employer, absorbing compliance liability and protecting client businesses from unexpected disruptions.

Self-Serve Employee Portal

A self-serve portal enhances the employee experience by offering access to payslips, leave balances, contract documents, and insurance coverage details. This minimizes HR involvement while improving employee engagement.

Employee Tax Optimization

Though income is tax-free, EORs help structure compensation in a way that aligns with employee expectations and UAE regulations. For foreign employees, EORs assist in reporting income to home-country tax authorities when required.

Employee Retirement

EORs manage the statutory end-of-service gratuity required under UAE law, calculated based on tenure and final salary. They ensure accurate fund allocation and assist with financial planning for employees nearing retirement or exiting the company.

Offboarding & Recovery

EORs ensure compliant offboarding, managing final payroll, visa cancellations, and recovery of company assets. They also handle documentation, ensuring a smooth transition while protecting the employer’s legal and operational interests.

How to Hire Employees Through an EOR UAE Partner

Hiring employees through an EOR UAE Partner offers businesses a compliant, cost-effective way to establish operations in the UAE without forming a local company. By working with an EOR provider, companies can avoid navigating the complexities of UAE’s dual regulatory structures (mainland and free zones), visa processing, and employment legislation.

EOR UAE Partner

An EOR UAE Partner is a third-party service provider that becomes the legal employer for your workforce in the UAE. The EOR takes full responsibility for labor law compliance, employment contracts, visa sponsorship, payroll, insurance, and end-of-service benefits. An EOR handles all legal and HR-related obligations, allowing your business to focus on recruitment, business strategy, and operational scaling. The EOR also mitigates risk by ensuring your business adheres to UAE Federal Decree-Law No. 33 of 2021 and free zone regulations, preventing penalties and legal complications.

Select the Best EOR Service Provider in UAE for Your Business

Choosing a reliable EOR provider is key to operating smoothly in the UAE. The best EOR partner should demonstrate strong familiarity with UAE labor laws, visa procedures, and end-of-service entitlements. When evaluating EOR providers, assess their capabilities in managing visa processing, WPS-compliant payroll, employee insurance, and government documentation. It’s also important to choose a provider with flexible service models that can cater to both mainland and free zone operations, depending on your business strategy.

Hire & Onboard Your New Employees

Once your EOR UAE partner is selected, the next step is to begin the recruitment and onboarding process. The EOR will guide you through advertising roles, selecting candidates, and finalizing employment contracts. They also manage local onboarding activities, including medical testing, Emirates ID registration, and visa issuance. The EOR ensures new hires receive proper documentation and are legally compliant with UAE employment requirements—enabling a smooth start for both employer and employee.

Remote EOR Employee Onboarding Checklist for UAE

Onboarding Step	Responsibility	Details
Before Offer Letter
Collect Employee Details	Company	Gather employee’s passport copy, visa history, education and employment docs.
After Offer Letter
Draft Employment Contract	EOR	Create bilingual contracts compliant with UAE labor and visa requirements.
Background Verification	EOR	Conduct reference checks and verify qualifications with employee consent.
Welcome Email	Company & EOR	Company sends introduction; EOR prepares visa and onboarding documentation.
On Joining Day
Employment Documentation	EOR	Finalize contracts, NDAs, and collect labor card documentation.
Payroll Setup	EOR	Register employee under WPS and prepare monthly salary disbursement cycle.
Policy Briefing	Company	Introduce HR policies, grievance redressal, and business ethics.
Account Setup	EOR	Assist with opening a UAE bank account for salary credit.
Introduction to Systems	EOR	Guide on using HRIS, leave management, and payslip portals.
IT Setup	Company/EOR	Arrange necessary hardware, secure logins, and collaboration tools.
Mentor Assignment	Company	Assign a mentor to integrate employee into company culture.
Post-Onboarding
Payroll Explanation (First Paycheck)	EOR	Review WPS slip, end-of-service accruals, and deductions.
Ongoing Support	Company	Schedule regular syncs, performance reviews, and feedback loops.
HR Operations	EOR	Handle routine HR, contract renewals, visa renewals, and health insurance.

Processing Payroll

Processing payroll in the UAE requires compliance with the Ministry of Human Resources and Emiratisation (MOHRE) guidelines and the Wages Protection System (WPS). An EOR UAE partner ensures payroll accuracy, legal compliance, and timely disbursement of employee compensation in accordance with federal and zone-specific labor policies.

Key components of payroll management in UAE include:

• Salary and Wages: The salary structure includes base pay, allowances (such as housing, transportation), and incentives. EORs ensure these are processed in accordance with the employment contract and UAE payroll standards.
  
• Statutory Contributions: While there’s no income tax, contributions such as end-of-service gratuity and UAE pension (for GCC nationals) must be managed correctly.
  
• WPS Registration: All employers are required to process salaries through the government-mandated WPS. EORs ensure accurate WPS registration and timely reporting.
  
• Other Benefits: Health insurance is mandatory for all employees in the UAE. EORs manage this along with other voluntary benefits like wellness programs or travel allowances.
  

The payroll process in the UAE typically involves three main phases:

• Payroll Calculation: This stage includes calculating monthly wages, allowances, leave encashment, and any bonuses while ensuring compliance with employment terms.
  
• Legal Compliance: The EOR ensures accurate tracking of leave balances, proper calculation of end-of-service benefits, and compliance with labor and immigration regulations.
  
• Salary Disbursement: Finalized payslips are processed through WPS, and salaries are deposited in the employee’s UAE bank account. EORs manage the entire process to avoid delays and ensure compliance.

Suggested Read: Hire Employees in India Through EOR

Taxes in UAE

The UAE offers a highly attractive tax environment, especially for employees. There is no personal income tax on salaries, wages, or most employment-related earnings. However, with the introduction of Corporate Tax in 2023 and existing Value-Added Tax (VAT) regulations, it’s important for employers and employees to understand their responsibilities. Businesses operating in the UAE must adhere to federal tax obligations under the Federal Tax Authority (FTA).

Corporate Tax in UAE (Effective 2023)

Taxable Income	Corporate Tax Rate
Up to AED 375,000	0%
Above AED 375,000	9%

Corporate tax applies to net profits earned by UAE businesses. However, free zone entities that meet qualifying criteria may continue to benefit from 0% corporate tax under specific conditions.

VAT Compliance in UAE

The UAE implemented Value Added Tax (VAT) at a standard rate of 5% in 2018. While this doesn’t directly affect employee paychecks, businesses must remain VAT-compliant on goods and services provided. Employers registered for VAT are required to file returns quarterly or monthly and maintain proper documentation to avoid penalties.

Tax Due Dates in UAE

• Corporate Tax filings are required annually based on the business’s financial year, with returns due nine months after the end of the financial period.
  
• VAT Returns must be filed either quarterly or monthly, typically by the 28th of the following month.
  
• Employers must keep accurate records of salary, payroll, and benefits in case of FTA audit, even if employee income is tax-free.
  

Tax Thresholds in UAE

Since there is no personal income tax, individual earnings do not follow tax slab structures. However, employers must be aware of:

• Corporate tax thresholds (AED 375,000 and above).
  
• Eligibility for free zone exemptions, which are conditional and sector-specific.
  
• Applicability of pension contributions for UAE and GCC nationals.
  

Foreign businesses should consult with EOR providers to determine whether their operations meet thresholds for mandatory corporate tax registration and filing.

Wages Protection System (WPS)

The UAE mandates salary payments through the Wages Protection System (WPS). Employers must ensure:

• Salaries are transferred to employee bank accounts via WPS on time.
  
• Any delay or discrepancy may lead to fines or suspension of work permits.
  
• EORs ensure compliance by managing all WPS requirements seamlessly.
  

Social Security Contributions

UAE nationals and GCC citizens working in the UAE are covered by the General Pension and Social Security Authority (GPSSA). Contributions include:

• Employer Contribution: 12.5%
  
• Employee Contribution: 5%
  

Foreign expatriates are exempt from social security contributions, but employers are expected to offer benefits such as health insurance, end-of-service gratuity, and leave entitlements.

End-of-Service Gratuity

Gratuity is a mandatory benefit in the UAE that replaces the concept of retirement pensions for expatriate workers. It is calculated as:

• 21 days’ basic salary per year for the first five years.
  
• 30 days’ basic salary per year after five years of service.
  

This applies only if the employee completes at least one year of continuous service. EORs handle accruals and payouts in line with UAE labor laws.

Health Insurance Obligations

Health insurance is legally required in most emirates (e.g., Dubai and Abu Dhabi). Employers must:

• Provide compliant health insurance coverage for all employees.
  
• Renew policies and maintain documentation for visa renewals and legal audits.
  
• EORs manage all health insurance registration, premium payments, and renewals.
  

No Personal Income Tax in UAE

Unlike India, the UAE does not impose income tax on salaries, rental income, capital gains, or investment returns for individuals. This makes it a highly attractive destination for professionals and employers alike. Employees receive full salary without tax deductions, increasing take-home pay.

Asanify’s Support for UAE Payroll and Compliance

Asanify supports businesses expanding into the UAE through its robust Employer of Record platform. While the UAE lacks personal income tax, corporate tax compliance, WPS filing, social benefits, and end-of-service gratuity are mandatory. Asanify ensures:

• Accurate salary disbursements through WPS.
  
• Compliance with corporate tax and FTA obligations.
  
• Proper administration of health insurance and gratuity.
  
• Efficient onboarding and HR documentation support.
  

Asanify’s UAE EOR solutions allow global businesses to remain compliant, attract talent, and scale with confidence across the Emirates.

Salary Cost Calculator for Hiring Employees in UAE

When hiring employees in the UAE, understanding the total employment cost is essential for employers to budget effectively and maintain compliance. Unlike India, the UAE does not use a “CTC” model. Instead, employers calculate the Total Cost of Employment (TCE), which includes base salary, allowances, end-of-service benefits, visa and licensing fees, insurance, and other statutory expenses. A Salary Cost Calculator helps businesses itemize these components, giving clear insight into the employer’s total financial obligation. It also helps estimate the employee’s net benefits, especially when structuring allowances like housing or transport. For more details on UAE salary breakdowns and how to calculate total employment cost, check out our blog!

Key Considerations While Hiring Employees Through EOR in UAE

Employee Agreements in UAE

Employee agreements are a foundational aspect of employment in the UAE. An EOR partner ensures that contracts are legally compliant with Federal Decree-Law No. 33 of 2021 and free zone regulations. Key components include job title, responsibilities, compensation, working hours, non-compete clauses, confidentiality agreements, and termination provisions. Employment contracts must be bilingual (Arabic and English) and submitted to relevant authorities (MOHRE or free zone regulators). Properly structured agreements protect both employer and employee and ensure enforceability under UAE labor laws.

Work Hours and Probation

The standard workweek in the UAE is 48 hours, with 8 hours per day, and Friday-Saturday or Saturday-Sunday off, depending on the employer. During Ramadan, daily work hours are reduced by 2 hours for all Muslim employees. The probation period can be up to 6 months and must be clearly stated in the employment contract. During probation, either party can terminate the agreement with 14 days’ notice, unless otherwise agreed. EOR providers ensure that probation terms align with UAE legal standards and are communicated transparently.

Leave Policies

The UAE mandates specific leave types that employers must offer. These must be explicitly stated in employment contracts. An EOR assists in drafting leave policies that comply with labor regulations while maintaining fairness and transparency.

Standard Leave Policy in UAE

Leave Type	Description	Duration
Annual Leave	Paid leave for personal use or vacation	30 calendar days per year
Sick Leave	Paid/unpaid leave for medical issues (with proof)	Up to 90 days (first 15 paid)
Maternity Leave	Leave for childbirth and recovery	60 days (45 paid + 15 unpaid)
Paternity Leave	Paid leave for fathers after childbirth	5 working days
Bereavement Leave	Time off to grieve the loss of a family member	3–5 days depending on relation
Hajj/Umrah Leave	Optional leave to perform pilgrimage (once only)	Up to 30 days unpaid (optional)

EORs ensure leave policies are in line with UAE law and include appropriate tracking systems.

Types of Leave in UAE Employment Law

• Annual Leave: Full-time employees are entitled to 30 calendar days of paid leave after completing one year of service. If employed for less than a year, leave is calculated pro-rata.
  
• Sick Leave: Eligible after 3 months of service, with the first 15 days paid, next 30 half-paid, and final 45 days unpaid.
  
• Maternity Leave: Female employees receive 60 days of leave—45 days paid and 15 days unpaid. Additional unpaid leave of up to 45 days is allowed under certain conditions.
  
• Paternity Leave: New fathers receive 5 days of paid leave within 6 months of the child’s birth.
  
• Bereavement Leave: Employees receive 3–5 days depending on the family member’s relationship.
  
• Marriage Leave & Pilgrimage Leave: Offered optionally by employers. EORs may include them as part of enhanced benefit packages.
  

List of General Public Holidays in UAE – 2025

Date	Occasion	Category
1 January 2025	New Year’s Day	Public Holiday
29 March 2025	Eid Al Fitr (Start)	Public Holiday (TBC)
30 March 2025	Eid Al Fitr Holiday	Public Holiday (TBC)
1 April 2025	Eid Al Fitr Holiday	Public Holiday (TBC)
6 June 2025	Arafat Day	Public Holiday (TBC)
7 June 2025	Eid Al Adha	Public Holiday (TBC)
8 June 2025	Eid Al Adha Holiday	Public Holiday (TBC)
7 July 2025	Islamic New Year	Public Holiday
15 September 2025	Prophet’s Birthday	Public Holiday
1 December 2025	Commemoration Day	Public Holiday
2 December 2025	UAE National Day	Public Holiday
3 December 2025	National Day Holiday	Public Holiday

Note: Islamic holidays are subject to moon sightings and may vary.

Gratuity Payments

End-of-service gratuity is mandatory in the UAE for employees completing at least one year of service. It is calculated as follows:

• 21 days’ basic salary per year for the first 5 years.
  
• 30 days’ basic salary for each year after 5 years.
  

EORs calculate and disburse gratuity in compliance with Article 51 of UAE Labor Law, ensuring timely and correct payments upon resignation, termination, or retirement. Gratuity is a key financial safety net and enhances employee retention.

Termination Policies

Termination in the UAE must comply with legal procedures, including written notice, final settlements, and visa cancellation. Standard notice periods are:

• 14 days during probation,
  
• 30 days after probation.
  

Termination for valid reasons (misconduct, poor performance) must be documented. Unlawful termination may result in compensation claims. EORs ensure compliant exits by handling:

• Visa cancellations,
  
• WPS clearance,
  
• End-of-service benefits,
  
• Ministry notifications.
  

This mitigates risk for the employer and safeguards employee rights.

Bonus Payments in UAE

While there is no statutory bonus requirement, many companies offer performance-based incentives or annual bonuses to retain talent. These are usually agreed upon in the employment contract or company policy. Common types of bonuses include:

• Discretionary performance bonuses,
  
• Annual retention bonuses,
  
• Commission-based incentives (common in sales roles).
  

An EOR partner manages these payments accurately, aligning with contract terms and WPS filings.

Health Insurance in UAE

Health insurance is mandatory in most emirates. Employers must:

• Provide compliant health insurance policies,
  
• Renew coverage annually,
  
• Cover dependents (optional in Dubai, mandatory in Abu Dhabi).
  

EORs arrange:

• Plan selection,
  
• Employee registration,
  
• Premium payments,
  
• Claims coordination.
  

Compliance with the Dubai Health Authority (DHA) or Abu Dhabi Department of Health is essential to avoid fines and visa delays.

Suggested Read: PEO vs EOR Differences- All That You Need to Know 

Employee Benefits in UAE

Employee benefits in the UAE are a critical part of overall compensation and are shaped by the UAE Labour Law and Emirate-level mandates. These benefits help organizations attract top talent, promote retention, and ensure employee welfare. UAE benefits are generally categorized into statutory and supplementary benefits.

Statutory Benefits in UAE

Statutory benefits are mandated under Federal Decree-Law No. 33 of 2021 and cover all full-time employees working in the private sector (mainland and free zones). These include:

• Health Insurance: Employers are legally required to provide health insurance coverage for employees, especially in Dubai and Abu Dhabi. Coverage must include essential medical services.
  
• End-of-Service Gratuity: Employees are entitled to gratuity upon completing at least one year of service. The gratuity is calculated based on the final basic salary and years of service.
  
• Annual Leave: A minimum of 30 calendar days of paid leave after one year of continuous service.
  
• Sick Leave: Up to 90 days of sick leave, with the first 15 days fully paid, the next 30 half-paid, and the rest unpaid.
  
• Maternity and Paternity Leave: 60 days for maternity (45 paid + 15 unpaid) and 5 days for paternity (within 6 months of childbirth).
  

Supplementary Benefits in UAE

Employers often offer additional, non-mandatory benefits to stay competitive and improve employee morale. These include:

• Performance Bonuses: Discretionary bonuses based on individual or company performance.
  
• Accommodation and Transport Allowances: Provided as part of salary or separately, depending on the employee’s contract.
  
• Flight Allowance: Annual air tickets for travel to the employee’s home country are commonly offered.
  
• Life and Accident Insurance: Optional policies covering death, disability, or workplace injuries.
  
• Education Allowance: Support for employee children’s school fees, particularly for senior roles.
  

Asanify’s Flexible Benefits Support in UAE

Asanify helps businesses offer customized benefits structures that align with UAE norms. Through its intuitive EOR platform, employers can configure tax-compliant allowances, bonuses, and perquisites to match employee preferences. While the UAE does not follow India’s CTC format, Asanify’s payroll engine ensures:

• Accurate end-of-service accruals
  
• Real-time leave and benefits tracking
  
• Transparent salary disbursement through WPS
  
• Integrated health insurance enrollment
  

This flexibility improves employee satisfaction and streamlines compliance for international employers.

Terminations in UAE

Terminating employment in the UAE requires strict adherence to UAE Labor Law and the applicable free zone or mainland rules. The law ensures a fair process for both employer and employee, including notice periods, final settlements, and visa cancellation.

Notice Periods in UAE

The standard notice period under the law is 30 days, but it may range from 14 to 90 days, depending on the contract. Both parties must serve this notice unless dismissal is due to serious misconduct. During probation, only 14 days’ notice is required by either party.

Severance Pay in UAE

End-of-service gratuity acts as severance pay in the UAE and is payable upon completion of at least one year of continuous service. It is calculated as:

• 21 days’ basic pay for each of the first 5 years
  
• 30 days’ basic pay for each year after 5 years
  

Gratuity does not apply if an employee is terminated for gross misconduct. EOR partners ensure these calculations and payments are handled accurately during offboarding.

Key Points:

• Legal Compliance: Terminations must follow statutory notice, settlement, and visa cancellation procedures.
  
• Documentation: Termination letters, MOHRE cancellation receipts, and payment receipts are essential.
  
• Employment Contracts: Contracts must clearly state termination grounds and severance entitlements.
  
• Employee Rights: Employees are entitled to unpaid leave encashments and fair settlement unless dismissed for cause.
  

Types of Termination

Termination for Cause

Dismissal for cause includes serious misconduct such as fraud, violence, or breach of confidentiality. The employer may terminate without notice, but evidence must be documented, and the employee must be allowed to defend themselves.

Termination Without Cause

Employers may terminate employees due to restructuring or performance-related issues. In such cases, proper notice and settlement of dues (including gratuity and unused leave) are required by law.

Collective Termination

Large-scale layoffs (e.g., company shutdown or merger) must be coordinated with labor authorities. While UAE law does not mandate prior approval for collective terminations, companies must ensure full compliance with all due settlements and visa regulations.

Voluntary Termination (Resignation)

Employees can resign with 30 days’ notice, or as per their contract. The employer must cancel the work permit, process final settlement, and provide an NOC if needed. The employee is entitled to gratuity, unused leave payout, and final salary.

What are the Key Steps Involved in Terminating Employees in UAE?

1. Serve Notice Period

Both the employer and the employee must serve the agreed notice. During probation, 14 days is sufficient. For confirmed employees, 30–90 days is typical.

2. Termination for Cause

The employer must document the reason and notify the employee in writing. A disciplinary hearing or explanation opportunity must be provided.

3. Full and Final Settlement

Once the notice period is completed:

• Final salary (including days worked)
  
• Unused leave encashment
  
• Gratuity (if eligible)
  
• Unpaid bonuses or allowances
  
• End-of-service letter
  

4. Documentation

Maintain a file containing:

• Termination letter
  
• Visa cancellation records
  
• Exit clearance forms
  
• Acknowledgment of dues received
  
• Health insurance cancellation proof
  

EOR providers like Asanify ensure that all these steps are managed professionally, mitigating compliance risks and maintaining a positive exit experience.

Recommended Read: How to Hire in India Easily- 10 Key Considerations

How to Choose the Right EOR UAE Services?

Expertise and Local Knowledge

When choosing an EOR UAE partner, it’s essential to select a provider with strong knowledge of UAE labor laws, immigration regulations, and free zone compliance. The provider should be well-versed in managing MOHRE procedures, visa sponsorships, WPS payroll regulations, and Emirate-specific employment norms. This expertise helps ensure your business remains compliant, avoids legal risks, and can confidently manage cross-border hiring in the UAE.

Comprehensive Service Offerings

The right EOR service provider should deliver a complete suite of services, including visa processing, payroll and WPS administration, health insurance setup, employment contracts, end-of-service benefits management, and HR compliance support. A full-service EOR takes over the complex regulatory burdens, allowing your business to focus on expansion, employee engagement, and local market growth without navigating UAE bureaucracy on your own.

Scalability and Flexibility

Your hiring needs in the UAE may evolve depending on project cycles, operational shifts, or regional expansions. The EOR you choose should provide flexible and scalable support—whether you’re hiring a single employee in Dubai or expanding a remote team across multiple Emirates or free zones. Look for providers who can quickly onboard or offboard employees, adjust services per your evolving business model, and offer multilingual support for diverse teams.

Technology and Data Security

Data protection is a key concern in the UAE, where businesses must comply with regulations such as the UAE Personal Data Protection Law (PDPL). Your EOR partner should use a secure, cloud-based HR and payroll platform to manage employee information, ensure salary disbursements via WPS, and track compliance. Robust data encryption, user access controls, and compliance audits should be part of their security framework to protect sensitive employee data and uphold your company’s reputation.

Benefits of Working With an Employer of Record (EOR) Service Provider in UAE

Compliance and Legal Expertise

UAE labor laws differ across mainland and over 40 free zones. EOR providers bring expert knowledge of these regulations, including visa classifications, labor contracts, and end-of-service benefit calculations. They ensure your hiring and HR practices are fully compliant, helping you avoid government fines or operational delays.

Time and Cost Efficiency

Partnering with an EOR allows businesses to avoid the time-consuming process of setting up a legal entity, obtaining trade licenses, and managing visa applications. The EOR handles payroll, onboarding, WPS, and legal filings—allowing you to focus on core functions while significantly reducing operational overhead and setup costs.

Swift Market Entry

An EOR allows companies to hire talent in the UAE within days, bypassing the need to incorporate or lease office space. This enables immediate access to regional opportunities and supports test expansions, pilot teams, or client service without long lead times. It’s ideal for businesses exploring the UAE market before committing to a full-scale launch.

Local HR Support

Local HR support is critical in a multicultural environment like the UAE. EOR providers help with employee onboarding, policy implementation, and handling grievances. Their familiarity with local culture, Arabic-English language norms, and HR protocols ensures smooth communication and enhances employee engagement.

Flexibility and Scalability

Whether you’re scaling a team across Dubai, Abu Dhabi, or a specialized free zone like DMCC or DIFC, EORs offer flexibility to adjust workforce size without legal hassle. They handle fast hiring, offboarding, and transitions efficiently—allowing businesses to stay agile in dynamic markets.

Risk Mitigation

By acting as the official employer, the EOR assumes liabilities related to labor law compliance, visa sponsorship, and insurance. This protects your company from risks like wrongful dismissal claims, visa overstays, or non-payment fines. The EOR also ensures proper exit documentation, minimizing the risk of future disputes.

Cost Efficiency

Outsourcing to an EOR eliminates the need to maintain internal legal, HR, and payroll departments for UAE operations. This significantly reduces costs associated with HR staffing, visa renewals, insurance processing, and PRO services. It also removes the need for long-term office leases or admin infrastructure.

Mitigating Cultural and Language Barriers

UAE’s diverse workforce and regional customs can pose challenges for foreign employers. EOR partners help bridge the gap by managing bilingual communication, advising on workplace etiquette, and aligning benefits with local expectations. This ensures that your employee experience is positive and culturally respectful.

Focus on Core Business Activities

Outsourcing employee administration, visa handling, and payroll through an EOR enables you to devote resources to sales, operations, product development, and growth strategy. With administrative burdens off your plate, your leadership team can focus on scaling your business in the UAE and beyond.

Visa Types in UAE

Asanify simplifies the UAE hiring process by offering end-to-end visa and work permit support for your employees. Our expert team ensures full compliance with UAE immigration laws, handling the paperwork, documentation, and coordination with MOHRE (Ministry of Human Resources and Emiratisation) or relevant free zone authorities. This allows your business to focus on operations while we manage the legalities of workforce mobilization in the Emirates.

If you prefer to handle visa and work permit procedures independently, here’s a step-by-step overview:

Visa Application Process

The process for hiring foreign nationals in the UAE begins with securing a job offer and selecting the appropriate jurisdiction—mainland or free zone. The employer (or EOR partner) then submits an employment visa application via the relevant immigration authority. The process typically includes:

• Submission of a job offer letter
  
• Passport copy of the employee
  
• Medical fitness certificate (post-arrival)
  
• Education and professional credentials
  
• Emirates ID biometric appointment
  

Once pre-approval is granted, the employee receives an entry permit to travel to the UAE. Upon arrival, the visa is finalized with medical testing, Emirates ID registration, and stamping of the residency visa in the passport.

Work Permit (Employment Visa) Requirements

Foreign employees require a UAE Work Permit (Labor Card) and Residency Visa to live and work legally in the UAE. Key requirements include:

• A passport valid for at least 6 months
  
• A valid job contract with a licensed UAE company
  
• Proof of educational qualifications (attested if required)
  
• Successful medical fitness test and background checks
  
• Processing of labor approval and employment entry permit
  

Employment visas are generally valid for 2 years (mainland) or 1–3 years (free zones), depending on the jurisdiction. Renewal is possible if the employment contract is extended.

Asanify handles these tasks for businesses, including document collection, PRO coordination, and visa tracking, ensuring employees start work quickly and compliantly.

Post-Arrival Registration

Unlike India, the UAE does not require separate foreigner registration like FRRO. However, the following steps must be completed after the employee’s arrival:

• Medical fitness test at an approved UAE health center
  
• Emirates ID biometric capture
  
• Visa stamping on passport (for residency confirmation)
  
• Issuance of Labor Card / Work Permit
  

These steps are mandatory for legal employment and must be completed within 60 days of arrival. Failure to meet deadlines can result in fines, visa rejection, or blacklisting.

Risks or Drawbacks of EOR UAE

1. Limited Control

One common concern when using an EOR in the UAE is limited direct control over employees. As the EOR becomes the legal employer, they manage administrative responsibilities such as payroll, visa processing, and HR compliance. This structure may create a disconnect between the client and its workforce in terms of enforcing company culture, management standards, and internal processes.

2. Potential Cultural Differences

UAE’s workplace environment is diverse, with employees from across Asia, Europe, and Africa. However, foreign companies unfamiliar with the UAE’s unique blend of Arab, Islamic, and expatriate business cultures may face integration challenges. While EORs assist in bridging these cultural gaps, differences in communication styles, religious observances, and work ethics may still impact employee alignment.

3. Cost

Although using an EOR avoids the high costs of forming a legal entity in the UAE, EOR services are still a premium offering. Depending on the visa type, free zone vs. mainland jurisdiction, and services included, EOR fees can add up. For small teams or short-term projects, businesses must evaluate if the benefits outweigh the expenses.

4. Data Security and Confidentiality

Entrusting a third-party with employee data—including visa details, salary, and legal documentation—raises data privacy concerns. The UAE has introduced the Personal Data Protection Law (PDPL), and reputable EORs ensure compliance. Still, businesses should assess the provider’s cybersecurity protocols to avoid breaches or misuse of confidential information.

5. Scalability Challenges

While EORs enable flexible hiring, extremely rapid scaling—especially across multiple Emirates or regulatory zones—may strain an EOR’s operational capacity. Delays in onboarding, visa renewals, or payroll processing can affect productivity. Businesses should ensure the EOR partner is equipped with scalable systems and staffing support.

6. Communication Challenges

If the EOR operates outside the UAE or lacks Arabic-speaking personnel, communication may be delayed or inconsistent. This can complicate time-sensitive decisions like visa renewals or employee terminations. Maintaining a dedicated liaison or account manager helps minimize communication gaps and ensures alignment on HR strategy.

How Does Employer of Record UAE (EOR) Differ From Usual HR Software?

1. Employer of Record (EOR)

An Employer of Record in the UAE acts as the legal employer for foreign businesses hiring within the country. The EOR manages visa sponsorship, WPS-compliant payroll, end-of-service calculations, health insurance, and legal compliance. EORs are essential for businesses without a UAE entity that want to legally hire staff across mainland or free zones.

Key responsibilities of an EOR include:

• Sponsorship and visa processing
  
• Payroll execution via Wages Protection System (WPS)
  
• End-of-service gratuity and leave tracking
  
• Compliance with UAE labor law and MOHRE or free zone regulations
  
• Risk and liability mitigation
  

EOR UAE services are especially valuable for rapid expansion or short-term project staffing without legal incorporation.

2. HR Software

HR software is designed to digitize and streamline internal HR processes—such as employee records, leave management, and attendance tracking. Unlike an EOR, HR software does not handle legal employment, visa processing, or labor compliance. It is most effective for companies with existing legal entities in the UAE.

Key features of HR software include:

• Digital record-keeping and time management
  
• Employee onboarding and workflow automation
  
• Performance reviews and team analytics
  
• Document management and communication tools
  

While HR software supports efficient operations, it cannot replace an EOR for businesses that require legal employment and immigration sponsorship in the UAE.

How Much Does it Cost to Avail Services Under EOR UAE?

Scope of Services

EOR costs vary based on the services needed. A basic plan might include visa sponsorship and payroll, while a comprehensive solution could cover onboarding, HR support, insurance, and compliance across multiple Emirates or free zones.

Employee Strength

EOR pricing is often per-employee-per-month (PEPM). The higher the number of employees, the more the cost—but volume-based pricing may offer discounts for larger headcounts.

Complexity of Employment Regulations

UAE labor rules differ between mainland and free zones, and vary by Emirate. Companies operating in regulated sectors (like finance or healthcare) may incur higher fees due to added compliance requirements.

Customization and Additional Services

EORs may offer add-ons such as private medical coverage, housing allowances, visa renewals for dependents, and gratuity forecasting. These premium services can raise the total cost of EOR support.

Technology Infrastructure

Advanced EORs use secure platforms for payroll, document storage, and compliance alerts. Providers offering dashboards with real-time data and automated notifications often charge more due to the technology-driven experience.

Pricing Models and Contract Terms

EOR UAE partners may offer flexible pricing—flat-rate monthly packages, custom SLAs, or performance-based fees. Longer-term contracts often come with favorable rates, while short-term or project-based agreements may carry setup charges or onboarding fees.

Conclusion: EOR UAE

The Employer of Record (EOR) model is a strategic gateway for businesses looking to hire in the UAE without the burden of setting up a local company. It enables legal and compliant workforce expansion across mainland and over 40 free zones, while ensuring adherence to UAE labor laws, visa regulations, and WPS standards.

EOR UAE services are ideal for:

• Testing new markets or running short-term projects
  
• Hiring remote or hybrid teams across the Emirates
  
• Avoiding administrative delays in entity setup
  

By managing payroll, compliance, and government relations, an EOR allows your company to focus on revenue generation, client delivery, and strategic operations—while minimizing risk and maximizing speed-to-market.

FAQS

Not to be considered as tax, legal, financial or HR advice. Regulations change over time so please consult a lawyer, accountant  or Labour Law  expert for specific guidance.