How to Hire Employees in UAE: Work Permits, Contracts and Costs 2026

Hiring your first employee in the UAE involves more steps than most business owners expect. You are not just paying a salary — you are sponsoring a visa, registering with the labour ministry, setting up payroll, and taking on legal obligations around end-of-service gratuity, annual leave, and termination.

This guide covers the full process: who can hire, how to get a work permit, what contracts must include, what gratuity costs, and what to budget for when bringing someone on board.

Who Can Hire Employees in UAE

To sponsor employees in UAE, your company must have:

1. A valid trade licence (mainland or free zone)
2. An establishment card with MOHRE (Ministry of Human Resources and Emiratisation)
3. Sufficient quota — the number of visas you are allowed to issue under your licence

Mainland companies are regulated by MOHRE. They must comply with Emiratisation targets (if applicable), minimum wage rules, and labour law obligations.

Free zone companies can also hire employees, but visa allocations are managed by the free zone authority. Each free zone has its own visa quota rules — some allow 3 visas on the base licence, others allow up to 6 or more depending on your office package. Visas are processed through the free zone or through GDRFA for some categories.

Sole establishments and freelancers can hire employees but tend to have limited visa quotas. Check with your DED or free zone.

Step 1: Get Your MOHRE Establishment Card (Mainland)

If you are a mainland company and this is your first hire, you need an establishment card from MOHRE before you can issue any work permits. This card is effectively your company’s profile with the labour ministry.

How to get it:

• Apply online via the MOHRE portal (mohre.gov.ae) or through a service centre
• Submit your trade licence, owner’s passport copy, and company contact details
• Fee: approximately AED 600-800

Timeline: 1-3 working days.

Free zone companies typically do not use MOHRE establishment cards; they register within the free zone system.

Step 2: Apply for a Work Permit (Entry Permit)

To bring a new employee to UAE (or switch their visa status), you need to apply for a work permit. This creates the entry permit that allows them to enter the country under your sponsorship.

For overseas hires:

1. Apply for the work entry permit via MOHRE (mainland) or free zone portal
2. Employee travels to UAE on the entry permit (or completes a status adjustment if already in UAE on a different visa)
3. Within 60 days of entry, complete the visa stamping process

For in-country status change hires (already in UAE):

If you are hiring someone already in UAE on another visa (employment, tourist, etc.), they must either:

• Cancel their current visa and apply fresh, or
• Do a status adjustment within UAE (possible in many situations but not all — check with a PRO or immigration specialist)

Work permit fee: AED 300-600 depending on skill level category.

Step 3: Medical Test and Emirates ID

Once the employee has entered on the work permit, they must:

1. Medical fitness test: Done at an approved MOHRE medical centre. Cost: AED 230-300. Results in 1-3 days.
2. Emirates ID application: Submitted via ICA (Federal Authority for Identity and Citizenship). Biometrics are taken at an ICA centre. Fee: AED 370 for a 2-year ID, AED 570 for a 3-year ID.

Timeline: Emirates ID typically arrives within 5-10 working days. A digital copy is available via the ICP UAE app immediately after processing.

Step 4: Residence Visa Stamping

With the medical test cleared and Emirates ID in progress, the residence visa is stamped in the employee’s passport. This is done at GDRFA (Dubai) or ICA (other emirates).

Visa stamping fee: AED 550-750 depending on visa duration (2 or 3 years).

Total cost to get one employee’s visa sorted: approximately AED 3,000-5,000 including all fees, medical, Emirates ID, and administrative charges. Use this as your baseline cost per hire.

Employment Contracts

UAE Labour Law (Federal Decree-Law No. 33 of 2021, amended 2024) requires all employment relationships to be on a fixed-term contract. Open-ended contracts are no longer issued. Contracts are typically for 1-3 years and are renewable.

What every UAE employment contract must include:

• Employee name, nationality, and passport number
• Job title and description
• Start date and contract duration
• Basic salary (in AED)
• Allowances (housing, transport, etc.)
• Working hours
• Annual leave entitlement (minimum 30 calendar days for employees with 1+ year tenure; 2 days per month for the first year)
• Notice period (minimum 14 days, up to 90 days by agreement)
• Probation period (maximum 6 months)
• Confidentiality and non-compete clauses (if applicable)

Contracts must be in Arabic (or bilingual Arabic/English). The Arabic version is the legally binding one in case of dispute.

MOHRE requires contracts to be registered in the Wages Protection System (WPS) — more on that below.

Wages Protection System (WPS)

All mainland companies with employees must pay salaries through the Wages Protection System. WPS is an electronic salary transfer system managed by the Central Bank of UAE and monitored by MOHRE.

How it works:

• Salaries must be transferred via a WPS-approved payment agent (most UAE banks, payroll providers)
• Each transfer is logged and reported automatically to MOHRE
• If a salary is 10+ days overdue, MOHRE flags the company and can freeze new work permit applications
• Persistent WPS violations result in fines and potential suspension of the establishment card

WPS compliance is not optional. It catches salary non-payment quickly. Employers who delay salaries in UAE face real consequences.

Free zone companies are technically not subject to WPS in the same way, but most free zones have their own oversight on salary payment obligations.

Minimum Salary Requirements

UAE does not have a universal minimum wage for all workers. However:

• Skilled workers (holding a degree): minimum AED 12,000/month for residency visa purposes in some categories
• Semi-skilled workers: minimum AED 7,500/month in some categories
• Unskilled workers: lower thresholds apply in specific industries

In practice, for knowledge workers — sales, marketing, finance, operations — you will be looking at AED 8,000-20,000/month as the realistic range for candidates willing to relocate to UAE or take a new role.

Visa applications for dependants (family sponsorship) also have minimum salary thresholds. Employees earning below AED 4,000/month may have difficulty sponsoring family visas.

Working Hours

Standard working hours under UAE Labour Law:

• 8 hours per day, 48 hours per week maximum
• During Ramadan: 6 hours per day for Muslim employees
• Overtime is payable at 125% of hourly rate, rising to 150% for work between 10pm and 4am and on rest days

These rules apply to mainland companies. Free zone companies must also comply with UAE Labour Law unless they have specific exemptions (DIFC, for example, has its own employment law).

Annual Leave

Employees are entitled to:

• 2 days of paid annual leave per month during their first year
• 30 calendar days per year after completing one year of service

Public holidays (UAE national holidays) are additional. These are announced annually by the government.

Sick leave: 15 days fully paid, 30 days at 50%, 30 days unpaid — after completing the probation period.

End-of-Service Gratuity

Gratuity is a mandatory severance payment in UAE. It applies to all employees who have completed at least one year of service (those who resign before one year get nothing; those who resign after one year get a pro-rated amount under certain conditions).

How gratuity is calculated:

For employees on unlimited contracts (legacy) or fixed-term contracts:

• 21 days of basic salary for each year of service for the first 5 years
• 30 days of basic salary for each year of service beyond 5 years

Important: Gratuity is calculated on basic salary only, not total package including housing and transport allowances. This is why many UAE employers set a lower basic salary with a higher allowance component.

Example:

Employee on AED 15,000/month total (AED 8,000 basic + AED 4,000 housing + AED 3,000 transport). After 3 years:

• Daily basic rate: AED 8,000 / 30 = AED 267
• 21 days x 3 years = 63 days of gratuity
• Total gratuity owed: AED 267 x 63 = AED 16,821

This is a real liability you need to budget for from day one. Many UAE businesses set aside gratuity monthly rather than being hit with a large payment at termination.

Total Cost of a Hire: What to Budget

Here is a realistic total-cost breakdown for a mid-level hire at AED 12,000/month basic salary:

This means a AED 15,000/month package employee costs you closer to AED 200,000-240,000/year all-in. Factor this into pricing, billing rates, or headcount planning.

Health Insurance

Health insurance is mandatory for all employees in Dubai and Abu Dhabi. Employers must provide at least a basic plan meeting DHA (Dubai Health Authority) or DOH (Abu Dhabi) minimum requirements.

Minimum plan cost: AED 700-1,500 per year for the cheapest compliant plans in Dubai (the Essential Benefits Plan for low-income workers). Standard SME plans for knowledge workers: AED 3,000-8,000/year per person.

Adding dependants (family members) to the policy increases costs significantly.

Emiratisation

If you are a mainland company with 20 or more employees, you are subject to Emiratisation targets under the Nafis programme. This requires a percentage of your workforce to be UAE nationals.

The targets and deadlines have been adjusted multiple times. Check the current MOHRE requirements on mohre.gov.ae. Companies that fail Emiratisation targets face fines.

If you have fewer than 20 employees: you are not currently subject to the same mandatory quotas, though the rules change and it is worth tracking.

Free zone companies are generally exempt from Emiratisation requirements (with some exceptions for certain categories of free zones).

Key Resources

• MOHRE portal: mohre.gov.ae — work permits, WPS, complaints, contract templates
• ICA portal: icp.gov.ae — residence visa status, Emirates ID
• GDRFA Dubai: gdrfad.gov.ae — Dubai immigration services

Using a PRO or HR Service

For your first hire or two, using a PRO service or an HR outsourcing firm saves significant time. They know the current fees, required documents, and processing order. For AED 1,000-2,500 per hire, they handle the paperwork and follow-up.

See our guide to UAE PRO services for what to look for when choosing one.

If you are sourcing candidates rather than processing paperwork, Hirevia is an AI-powered recruitment platform that helps UAE businesses screen and shortlist candidates faster - useful when you are hiring at volume or across multiple roles at once.

Summary

Hiring in UAE is structured but manageable. The key obligations are:

1. Valid licence with visa quota
2. MOHRE establishment card (mainland)
3. Work permit, medical test, Emirates ID, and visa stamp
4. Compliant employment contract registered in WPS
5. Salary paid through WPS on time
6. Health insurance arranged
7. Gratuity accruing from day one

Budget AED 4,000-5,000 for the initial visa setup per employee, and model your true employment cost including gratuity accrual and health insurance before agreeing to a compensation package.

Once your company is set up and hiring, the next question is usually about financial management. Read our UAE corporate tax guide to understand your tax obligations as your team grows.

If you are managing more than 10 employees, a proper HR system will save you significant time on payroll, leave, and WPS compliance. Horilla HRM via WireApps is an open-source option built for UAE businesses — WPS-compatible payroll, gratuity calculations, and employee document management included.