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Global Payroll Team
Written by Global Payroll Team
Last updated May 1, 2026
Expert Reviewed
Payroll in United Arab Emirates
EOR in United Arab Emirates
PEO in United Arab Emirates

United Arab Emirates map

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Employer of Record/PEO and Payroll Services in United Arab Emirates (UAE)

A constitutional federation of seven emirates, the UAE (United Arab Emirates) is politically and economically stable. A progressive policy of economic diversification, free zones and increased foreign direct investment has contributed to the UAE’s robust economy, with non-oil sectors continuing to play a leading role in growth.

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Doing Business in UAE

The UAE is stable economically and its positive features include a strategic location, strong financial reserves, consistent government spending, several multi-specialty free zones and a progressive policy of economic diversification.

Entity Registration & Incorporation Requirements

Setting up a new business or expanding an existing one in the UAE is straightforward. Choose how your company operates from a range of entity types which suit your individual circumstance.

Banking

Banks are open from Monday to Friday 9 am to 4 pm.

Working Week

The standard private-sector working week is usually worked from Monday to Friday. Normal working hours are generally 8 hours per day or 48 hours per week.

Labor Law

The UAE is implementing a strategic plan to promote Emiratisation in the private sector, that is an initiative to employ its citizens in a meaningful and efficient manner in the public and private sectors. Federal Decree-Law No. 33 of 2021, as amended, governs labour relations in the private sector and applies to employees working in the UAE, whether UAE nationals or expatriates.

Main Industries

Petroleum, petrochemicals, travel and tourism, logistics, financial services, trade, real estate and construction

GDP Growth

4.0%

Dates & Numbers

dd/mm/yyyy

Official State Name

The United Arab Emirates

Population

11.4 million

Capital

Abu Dhabi

Major Languages

Arabic

Currency

Dirhams

Internet Domain

.ae

International Dialing Code

+971

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United Arab Emirates
Abu Dhabi, AE
3:21 am, May 2, 2026
28°C
clear sky
51 %
Wind Gust: 0 mph
Clouds: 0%
Sunrise: 5:47 am
Sunset: 6:51 pm

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Payroll in UAE

Mercans provides accurate and compliant payroll solutions in the UAE, ensuring on-time salary payments and compliance with local regulations for businesses operating in the region. Our UAE payroll team is among the best in the industry when it comes to outsourcing payroll services, thanks to their experience, expertise, and smart payroll technology. Known as a leading Dubai payroll provider, Mercans is listed as one of the top, most-reliable payroll companies in UAE. We are also listed as one of the largest payroll outsourcing companies for the provision of payroll services, making us a leader in this field.

Our expertise as a payroll provider in the UAE allows us to guide your team through ever-evolving regulations by removing the hassle out of complex and time-consuming payroll procedures, including managing Wages Protection System requirements, reporting, and statutory compliance, so that your team can focus on what they do best.

With our dedicated payroll services in Dubai and our payroll experts at your disposal, you can rest assured that we will be able to respond to all your payroll-related queries and requirements in real time. Known for being one of the top payroll outsourcing companies in UAE, we tailor our services to fit in with the ways in which your company operates, so that you can focus on your core business activities.

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Global Payroll Solutions, UAE

Private sector employers should pay staff salaries through the Wages Protection System to avoid penalties or fines. Wages are generally due at least once a month, and salary delay consequences arise if payment is not made within the first 15 days after the due date, unless the contract provides a shorter payment period.

It is acceptable to provide employees with online pay slips

Payslip

Payroll reports must be kept in line with applicable labour, tax and accounting recordkeeping requirements

Reports

30 calendar days after one year of service, or 2 days per month after six months and before one year

Annual Leave

90 days sick leave, with the first 15 days on full pay, the next 30 days on half pay and the remaining 45 days unpaid

Sick Leave

60 days of maternity leave, of which 45 days are on full pay and 15 days on half pay, plus 5 days of paid parental leave

Maternity & Paternity Leave

On provision of 30 to 90 days prior notice

Employee Termination

No requirement by law for provision of a 13th month salary. This payment is made based on employer’s discretion

13th Salary

No general statutory minimum wage. For Emiratis in the private sector, the minimum wage is AED 6,000 per month from 1 January 2026

Minimum Wage

Employees must receive an overtime wage equivalent to regular hour pay with a 25 per cent increase, or 50 per cent for work between 10 pm and 4 am in applicable cases

Overtime

First 5 years: 21 days’ basic salary for each year of service. More than 5 years: 30 days’ basic salary for each additional year

Severance Pay

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Employer of Record (EOR) in the United Arab Emirates

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Mercans serves as an Employer of Record in the UAE, assuming legal and administrative responsibilities for compliance, payroll, and HR management, allowing businesses to establish their presence without the need for a local entity. With our localized contracts, easy-to-use invoicing system, and best-in-class compliance standards, you can grow your global team with confidence.

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In the event that you are concerned with speed and local expertise when expanding into or hiring workers in the UAE, an employer of record may be the best option for achieving your goals with regard to international expansion in order to achieve your target results.

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With a payroll employer of record in the UAE/ EOR in UAE, sometimes called an international PEO, you can hire and onboard workers quickly without incurring the costs and risks of setting up a local company.

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By using our Global Employer of Record solution, you can hire your team directly through our local legal entities in each country while we handle payroll, tax, benefits, and compliance so you can focus on what really matters.

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Our platform has been designed to work as a unified employment platform with automated workflows, digital signatures, payroll, contractor payouts, and all types of compliance solutions that you might require to maintain compliance within your organization.

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Learn about the requirements for hiring, employment, payroll, and benefits for workers in the UAE and how we can help you in dealing with your international employment needs through our employer of record services, Professional employer organization (PEO) services, and with the assistance of our local HR experts.

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PEO United Arab Emirates (UAE)

Mercans offers PEO services in the UAE, providing companies with access to local talent and markets while we handle all employment-related tasks and legal compliance, reducing risk and ensuring seamless expansion. With Mercans’ PEO in UAE, companies can manage their HR and payroll needs conveniently.

As a Professional Employer Organization, Mercans provides a comprehensive range of services, including employee benefits, payroll administration, and compliance with UAE labor laws. With their extensive knowledge and experience, Mercans ensures that companies can focus on their core business activities while they handle the HR and payroll responsibilities.

Partnering with our PEO in the UAE presents the fastest and most efficient way to enter the UAE market.
Contact us to explore how PEO United Arab Emirates solutions from Mercans can support your seamless expansion!

Benefits of Hiring an Employee through a PEO in UAE

Looking to expand your business into the United Arab Emirates? Partnering with a PEO in UAE offers a strategic, compliant, and cost-efficient way to build your presence in this dynamic Gulf market without needing to establish a local entity. Here are the top benefits of using a UAE PEO:

Accelerated Market Entry

Hiring through a PEO UAE solution allows your business to quickly onboard employees without waiting months to set up a local business structure. This rapid entry is ideal for companies wanting to test the market or scale operations efficiently.

Compliance with UAE Labor Laws

UAE labor regulations are unique, especially concerning employment contracts, gratuity, and visa sponsorship. A PEO in UAE ensures that your employment practices align with federal and free zone laws, helping you avoid penalties and legal disputes.

Visa and Work Permit Management

Securing work visas in the UAE can be complex. A UAE PEO manages sponsorship, visa processing, and renewals, eliminating bureaucratic hurdles and ensuring that your workforce is legally authorized to work.

Cost and Time Savings

Setting up a legal entity in the UAE involves licensing, office space, and government approvals. A PEO UAE solution lets you bypass those setup costs, while also handling payroll, benefits, and HR compliance.

Reduced Operational Risk

With evolving labor rules and strict enforcement, non-compliance in the UAE can be costly. A UAE PEO keeps your operations aligned with current laws and employment standards, protecting your brand and financial stability.

Access to Multinational Talent

The UAE is home to a diverse, multilingual talent pool. A PEO in UAE helps you source and hire skilled professionals familiar with local and regional business practices, giving you a competitive edge.

Flexible Growth Model

Whether you’re hiring one employee or building a full team, a UAE PEO enables scalable workforce expansion. You can easily adjust to market conditions without long-term infrastructure commitments.

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Tax and Social Security

Companies that manage multi country global payroll should take note of the unique situation in the UAE. The UAE does not levy income tax on individuals. Social security contributions are generally applicable only for UAE nationals and GCC nationals under the relevant pension coordination rules.

Tax

Corporate tax is now levied more broadly in the UAE, while value added tax continues to apply to the majority of goods and services. Oil companies and foreign banks may also be subject to sector-specific tax rules.

9%

Corporate Income Tax

0%

Personal Income Tax

5%

Sales Tax

5%

VAT

Social Security

If UAE or GCC nationals are employed, both the employer and employee are required to make contributions under the applicable pension and social security framework. Expatriate employees are generally not subject to UAE social security contributions.

26%

Social Security Rate

15%

Social Security Rate for Employers

11%

Social Security Rate for Employees

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Employment Law

If an individual is offered a job in the UAE, they must be provided an offer letter issued through the Ministry of Human Resources and Emiratisation process where applicable. Tourist or visit entry permissions do not provide the right to work in the UAE, and default may result in penalties being incurred and deportation.

Employment agreement

Employment contracts in the private sector are based on the offer letter signed by both parties and submitted to the Ministry within the prescribed timeline. Fixed-term employment contracts are standard under the current framework.

Working Condition

The Labour Law provides rules about safety and the protection of employees of the private sector including the midday break rule which bans labourers from working outdoors directly under the sun during the afternoons in the summer. Several decrees have been passed to protect worker rights covering recruitment, pay, housing and health.

Leaves

Private sector employees in the UAE are entitled to annual leave, sick leave, maternity leave, parental leave, bereavement leave and leave to complete the Hajj.

Employment termination

Either party may terminate the employment relationship subject to the notice period and legal procedures set out in the Labour Law. In all cases, termination should comply with statutory requirements and any agreed contractual provisions.

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30 to 90 days

Terminating Employment Minimum notice period for terminating an employee

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varies

Total number of public holidays

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48

Working hours per week

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3 to 5 days

Total number of days for Compassionate & Bereavement Leave

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Immigration

Employment, once accepted, must follow the formal work permit and residence procedures applicable in the UAE. The worker must receive the official job offer form and the employer must complete the relevant work permit and residence sponsorship steps before lawful employment begins.

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Residency Permits

An individual’s residency permit must be paid for by the employer who must also pay recruitment costs and the individual’s travel costs to the UAE where applicable. Residence visas for ordinary private-sector employment are commonly issued for two years and are renewable subject to the applicable rules.

Work Permit validity

Commonly 2 years for standard employment residence visas

Required Documents

Valid passport copy with at least six months validity

Clear coloured photograph with a white background

Official job offer form issued by the Ministry and signed by employer and employee

Professional licence from the competent authority where required for regulated occupations

Visa and residence processing documents required by the competent immigration authority

Compliant, reliable, error-free and touchless payroll in United Arab Emirates

Build the best team and hire top talent compliantly in United Arab Emirates. Get in touch with United Arab Emirates payroll outsourcing & PEO specialists for a free consultation!

This document was prepared for informational purposes only. As local laws & regulations keeps on changing. Please consult your tax & legal advisors as well.
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    FAQs

    What is an Employer of Record (EOR) in the UAE and how does it support foreign companies?

    An Employer of Record in the UAE allows international businesses to hire employees locally without establishing a legal entity. The EOR acts as the legal employer, managing employment contracts, payroll, visa sponsorship, benefits, and compliance with UAE labour and immigration laws, while the client oversees daily operations.

    Why should businesses use an EOR instead of establishing a legal entity in the UAE?

    Using an EOR in the UAE enables fast and cost-effective market entry. It eliminates the need for company registration, licensing, and administrative setup, ensuring full legal compliance while reducing overhead and allowing businesses to focus on growth.

    How does payroll outsourcing in the UAE ensure compliance with labor and tax regulations?

    Payroll outsourcing in the UAE ensures timely salary payments through the Wage Protection System, accurate end-of-service calculations, and adherence to social security and employment regulations. All payroll processes are handled in line with UAE labour laws, ensuring accuracy and compliance.

    Can an Employer of Record in the UAE hire employees and manage work permits for international companies?

    Yes. An EOR in the UAE can hire both local and expatriate employees, manage visa and work permit applications, and handle residency and labour approvals. This ensures that all employees are legally employed and that companies remain compliant with immigration and employment laws.

    What are the main benefits of using EOR and payroll services in the UAE for global expansion?

    Key benefits include rapid and compliant market entry, reduced administrative burden, full compliance with UAE labour and immigration laws, access to expert HR and payroll support, and the flexibility to scale workforce operations across the UAE with ease.

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