What UAE employee benefits must you provide in 2026?
The end-of-service gratuity is the UAE's defining statutory benefit. It accrues at 21 days of basic wage per completed year for the first five years, rising to 30 days per year after that, capped at 24 months of basic wage.
· United Arab Emirates guide
Illustration · Dubai, United Arab Emirates
The UAE has no income tax. Take-home pay is the gross offer.
Annual leave is 30 days after one year of service. Public holidays add 7 official occasions per year.
Sick leave runs in three tiers: 15 days at full pay, 30 days at half pay, then 45 days unpaid.
Every employee earns end-of-service gratuity from year one. The rate is 21 days of basic wage per year for the first five years. It rises to 30 days per year after that.
What benefits must you provide UAE employees by law?
The law sets a clear floor. You must provide 30 days of paid annual leave after one year of service. Sick leave is tiered: 15 days at full pay, then 30 days at half pay, then 45 days unpaid.
End-of-service gratuity is the biggest mandatory benefit. It kicks in after 1 completed year. The rate is 21 days of basic wage per year for the first five years.
| Benefit | Minimum (2026) | Source |
|---|---|---|
| Annual leave | 30 days (after 1 year of service) | Federal Decree-Law No. 33 of 2021, Article 29 |
| Public holidays | 7 official occasions per year | UAE Cabinet Resolution on Public Holidays |
| Sick leave (full pay) | 15 days | Federal Decree-Law No. 33 of 2021, Article 31 |
| Sick leave (half pay) | 30 days | Federal Decree-Law No. 33 of 2021, Article 31 |
| Sick leave (unpaid) | 45 days | Federal Decree-Law No. 33 of 2021, Article 31 |
| Maternity leave | 45 days at full pay, then 15 days at half pay | Federal Decree-Law No. 33 of 2021, Article 30 |
| Paternity leave | 5 days (paid) | Federal Decree-Law No. 33 of 2021, Article 32 |
| End-of-service gratuity (years 1 to 5) | 21 days of basic wage per completed year | Federal Decree-Law No. 33 of 2021, Article 51 |
| End-of-service gratuity (after year 5) | 30 days of basic wage per additional year | Federal Decree-Law No. 33 of 2021, Article 51 |
| Gratuity cap | 24 months of basic wage | Federal Decree-Law No. 33 of 2021, Article 51 |
| GPSSA pension (UAE nationals only, employer) | 15% of contribution account salary | Federal Decree-Law No. 57 of 2023, GPSSA |
| GPSSA pension (UAE nationals only, employee) | 11% of contribution account salary | Federal Decree-Law No. 57 of 2023, GPSSA |
There is no personal income tax in the UAE. Expatriate employees are not enrolled in GPSSA. Their retirement provision is the end-of-service gratuity.
What does a competitive UAE benefits package look like?
The zero-tax environment makes gross salary the take-home figure. That means your benefits package carries more weight than the headline number.
Competitive packages in Dubai and Abu Dhabi typically add private medical insurance, housing or rent allowance, school fees support for children, annual flight allowance, and enhanced gratuity on top of the legal floor.
| Benefit | Typical mid-market practice | What it signals |
|---|---|---|
| Private medical insurance | Mandatory in Dubai (DHA); common across UAE; cost varies 2,000 to 8,000 AED per year per employee | Dubai Health Authority requires employers to provide cover |
| Housing or rent allowance | 20 to 30% of basic salary, or a cash allowance of 40,000 to 100,000 AED per year | Housing costs are high; candidates factor this in before accepting |
| Annual flight allowance | One or two return tickets to home country per year | Standard expectation for expatriate hires across sectors |
| School fees support | Full or partial school fees for dependent children; 30,000 to 80,000 AED per child per year at mid-market | A top differentiator for senior hires with families |
| Transport allowance | 1,500 to 3,000 AED per month cash, or company car for senior roles | Public transport is limited outside central Dubai |
| Enhanced gratuity | Some employers accelerate the gratuity schedule or top up above the statutory rate | Signals long-term intent; reduces exit risk for tenured staff |
| Life assurance | 3 to 5 times annual salary; typical cost 1,500 to 4,000 AED per year per employee | Not required by law; expected in professional services and tech |
Model your loaded benefit cost on the Employer Cost Calculator to see the full picture for a specific salary and package.
What pension provision should you plan for?
UAE nationals must be enrolled in GPSSA. The employer contributes 15% and the employee contributes 11% of the contribution account salary.
Expatriate employees have no pension auto-enrolment. The end-of-service gratuity is their statutory retirement provision.
The two populations in a UAE workforce require separate planning:
UAE national employees (GPSSA)
Employers of UAE nationals must register with the General Pension and Social Security Authority (GPSSA) and make monthly contributions. The employer rate is 15% of the contribution account salary. The employee rate is 11%. These rates apply to employees who joined from 31 October 2023 under Federal Decree-Law No. 57 of 2023.
Abu Dhabi nationals are covered by the Abu Dhabi Pension Fund (ADPF) rather than GPSSA. The contribution mechanics differ. An EOR handles the registration, contribution calculation, and monthly transfer for both schemes.
Expatriate employees
There is no pension auto-enrolment for expatriates. Their mandatory retirement benefit is the end-of-service gratuity. The gratuity accrues throughout service and is paid as a lump sum on termination, resignation after one year, or retirement.
Some competitive employers layer a voluntary savings plan on top, typically a defined contribution scheme administered through an offshore trust or a UAE-based investment platform. This is a market benefit, not a legal requirement. The cost and structure vary by provider and headcount.
The gratuity as a pension substitute
For a 10-year employee earning AED 30,000 basic wage per month, the gratuity would be: 5 years at 21 days per year (105 days, or 3.5 months) plus 5 years at 30 days per year (150 days, or 5 months), totalling 8.5 months of basic wage. The statutory cap is 24 months of basic wage for any length of service.
End-of-service gratuity: the UAE retention lever
The gratuity is not a severance payment in the Western sense. It accrues for every completed year of service, regardless of who ends the contract.
After 1 completed year, the right is established. It cannot be waived in the employment contract.
The gratuity formula under Federal Decree-Law No. 33 of 2021, Article 51:
- Years 1 to 5: 21 days of basic wage per completed year.
- Year 6 and beyond: 30 days of basic wage per additional completed year.
- Cap: 24 months of basic wage, regardless of tenure.
Calculated on basic wage only. Allowances (housing, transport, school fees) are excluded from the gratuity base. An employee on AED 20,000 basic and AED 15,000 allowances earns gratuity on the AED 20,000 figure only.
Final pay including the gratuity must be settled within 14 days of the last working day. Late payment carries a penalty of 9% annual interest under Article 18 of Ministerial Resolution No. 27 of 2023.
Using gratuity as a retention tool
The step-up from 21 days to 30 days at the five-year mark creates a natural retention incentive. Employees approaching that threshold have a financial reason to stay. Some employers make this explicit by communicating gratuity projections on the annual total-compensation statement.
Enhanced gratuity schemes go further: doubling the statutory rate, removing the cap, or paying gratuity as a quarterly accrual into a trust rather than as a terminal lump sum. These are market benefits, not legal requirements.
Official source: All gratuity rules are set by Federal Decree-Law No. 33 of 2021 (MOHRE). MOHRE also runs a free gratuity calculator at mohre.gov.ae.
Repatriation and end-of-service planning: the 2024 to 2026 shift
Most UAE employees are expatriates hired on fixed or unlimited-term contracts. Repatriation at contract end is an employer obligation.
The shift over 2024 to 2026 is a move toward total-package thinking. Employers who plan gratuity, repatriation, and succession together retain staff longer.
The competitive conversation in 2024 to 2026 has moved from salary to total package. Several trends are driving this:
- Repatriation flights. The employer must fund return travel to the employee's home country at the end of the contract. This is a legal obligation under Article 20 of Federal Decree-Law No. 33 of 2021, not just a market norm. Budget for one business-class or two economy tickets per employee at each contract cycle.
- Gratuity accrual visibility. Employers who show employees a running gratuity balance on their payslip or total-comp statement see higher retention at the four-year mark. The five-year step-up is an easy prompt.
- Voluntary end-of-service savings schemes. DIFC and ADGM free zone employers are increasingly moving to defined contribution schemes that replace or top up the statutory gratuity. DIFC introduced a workplace savings scheme in 2020; Abu Dhabi followed. These schemes let employees invest accrued benefits rather than waiting for a terminal lump sum.
- Wellness and mental health. The post-pandemic shift to EAP and therapy benefits that reshaped UK and US packages is arriving in Dubai and Abu Dhabi. Large regional employers in financial services and tech now routinely include mental health sessions and wellness stipends.
- Flexible working. UAE federal law permits part-time and remote arrangements under Federal Decree-Law No. 33 of 2021. Competitive employers codify hybrid working policies rather than relying on informal discretion.
For employers scaling into the UAE, the practical question is not whether to offer these benefits but how to administer them without a local entity. An EOR absorbs the administrative complexity of GPSSA registration, WPS payroll, gratuity accrual tracking, and repatriation coordination.
How does Teamed handle UAE benefits for you?
Teamed becomes your legal employer of record in the United Arab Emirates for from $599 per employee per month, with zero FX mark-up in any currency.
Gratuity accrual, GPSSA registration for UAE nationals, and WPS-compliant payroll all run on one platform.
Most UAE employers start with a single hire and graduate to a team of five or twenty as the market proves out. The package that works at one hire until it isn't quite right for the team you have built is easy to adjust. Real HR and legal experts handle the gratuity calculation, GPSSA and ADPF enrollments for national employees, and the Dubai Health Authority (DHA) medical insurance compliance for Dubai-based staff. An actual person, not a chatbot or a pooled queue. There is no setup fee and no exit fee. Employer cost passes through at cost, itemised on every invoice.
What is included in Teamed's standard EOR fee:
- Gratuity accrual tracking and lump-sum calculation on exit
- WPS-compliant monthly payroll processing
- GPSSA registration and monthly contribution transfer for UAE national employees
- Annual leave tracking and public holiday management
- Maternity and paternity leave administration
- Employment contract drafting in compliance with Federal Decree-Law No. 33 of 2021
What clients pass through at cost on the invoice:
- Private medical insurance premiums (including DHA-mandated cover for Dubai employees)
- Housing and transport allowances
- Annual flight allowance and repatriation travel
- School fees reimbursement
- Enhanced or accelerated gratuity top-ups above the statutory floor
- Voluntary end-of-service savings scheme contributions
The zero-tax environment means every AED of employer cost goes directly into visible take-home pay or benefits. Teamed's job is to make the mechanics frictionless so you spend your attention on the package design, not the administration.
Key sources: MOHRE Federal Decree-Law No. 33 of 2021 and GPSSA pension authority.
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Share your headcount and roles
Tell Teamed the nationalities, salaries, and locations. We map the statutory obligations: GPSSA for UAE nationals, gratuity accrual for expatriates, DHA medical cover for Dubai-based staff.
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Choose your package above the floor
The statutory floor covers the legal minimum. We help you add housing allowance, flight cover, school fees, and enhanced gratuity to match the market. Every element passes through at cost.
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We handle enrolment and payroll
Teamed registers with GPSSA, sets up WPS-compliant payroll, and administers the benefits from day one. You get one consolidated invoice.
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Gratuity accrues and is tracked
Every employee's gratuity balance is tracked in real time. When the contract ends, Teamed calculates and pays out within the legal deadline.
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Review and scale
Benefits packages can be adjusted as your UAE team grows. Teamed reviews the package annually and flags regulatory changes that affect your cost.
Frequently asked questions
How much annual leave must UAE employees receive by law?
Employees are entitled to 30 days of paid annual leave after completing one year of service. The UAE also has 7 official public holiday occasions per year. For the first year of service, leave is calculated on a pro-rata basis.
How does sick leave work in the UAE?
Sick leave runs in three tiers after 3 months of service. The first 15 days are at full pay. The next 30 days are at half pay. The remaining 45 days are unpaid. The employer may terminate the contract if the employee remains sick beyond the unpaid period. (Federal Decree-Law No. 33 of 2021, Article 31)
What is the end-of-service gratuity and who receives it?
The end-of-service gratuity is a mandatory lump-sum payment owed to every employee who completes at least 1 year of continuous service. The rate is 21 days of basic wage per completed year for the first five years, then 30 days per year after that. The total cannot exceed 24 months of basic wage. All final pay including gratuity must be settled within 14 days of the last working day.
Does the employer need to provide a pension for UAE employees?
It depends on the employee's nationality. UAE national employees must be enrolled in GPSSA (or ADPF for Abu Dhabi nationals). The employer contributes 15% of the contribution account salary and the employee contributes 11%. Expatriate employees are not enrolled in GPSSA. Their mandatory retirement provision is the end-of-service gratuity.
What maternity and paternity leave must UAE employers provide?
Maternity leave is 45 days at full pay followed by 15 days at half pay, for a total of 60 days. Paternity leave is 5 days of paid leave. Both are set by Federal Decree-Law No. 33 of 2021.
In the UAE the gratuity is not a severance cost. It is a benefit that accrues from day one. Employers who treat it as a line item at exit rather than a running commitment get the calculation wrong and the relationship wrong at the same time.
The UAE has no income tax. Your offer price is the take-home price. That means every AED in your benefits package hits differently.
The gratuity cap is 24 months of basic wage. Senior hires know this number before they sign.
Plan gratuity, repatriation, and GPSSA together or plan to unwind each one separately when someone leaves.
