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UAE Employee Cost Calculator — Full Cost of Hiring in UAE Guide 2026
The cost of hiring an employee in UAE goes well beyond their monthly salary. Employers must budget for visas, health insurance, end-of-service gratuity, workmen’s compensation, payroll processing, and other costs. This guide provides a complete UAE employee cost calculation for 2026.
UAE Employee Cost Components
Monthly Salary
- Gross salary: the agreed monthly salary; UAE has no statutory minimum wage for most private sector employees; market rates apply
- Basic salary: the “basic” component (typically 50-70% of gross); allowances (housing allowance, transport allowance, food allowance) make up the remainder; EOSG is calculated on basic salary, not gross
- UAE nationals (Emiratis): if hiring UAE nationals, additional costs apply — Social Insurance (GPSSA): employer contributes 15% of Emirati employee’s basic salary; General Pensions and Social Security Authority
Visa and Emirates ID
- New visa cost (first time): AED 4,000-7,000 per employee (including MOHRE work permit, GDRFA entry permit, medical, Emirates ID)
- Visa renewal (every 2 years): AED 3,500-5,500 per renewal
- Amortised annual cost: AED 2,000-3,500/year per employee (dividing biennial visa cost by 2)
Health Insurance
- Dubai (mandatory): minimum basic plan AED 1,200-2,500/year; comprehensive AED 3,000-8,000/year per employee
- Abu Dhabi (mandatory): DOH minimum cover AED 1,500-3,000/year
- Other Emirates (recommended): AED 800-2,500/year
End-of-Service Gratuity (EOSG)
- Accrual: 21 days basic salary per year for first 5 years; 30 days per year after 5 years
- Amortised monthly cost: approximately 5.8% of basic salary per month (21 days / 365 days = 5.75%)
- Example: AED 10,000 basic salary; EOSG accrual = AED 575/month = AED 6,900/year
Other Costs
- Workmen’s compensation insurance: AED 500-2,000/year per employee
- PRO/visa processing fees: AED 500-1,500/year per employee (amortised)
- Payroll processing: AED 50-200/employee/month if using payroll software or service
UAE Employee True Total Cost Example
- Employee gross salary: AED 10,000/month = AED 120,000/year
- Visa cost (amortised): AED 2,500/year
- Health insurance: AED 2,000/year
- EOSG accrual (5.8% of basic AED 7,000): AED 4,872/year
- Workmen’s comp: AED 800/year
- PRO fees: AED 600/year
- Total annual employer cost: ~AED 130,772/year = 109% of gross salary
- Rule of thumb: budget 1.1-1.2x the annual gross salary for total employer cost of a UAE employee
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