UAE Employee Cost Calculator Guide 2026 — Total Employment Cost in UAE
Hiring in UAE comes with multiple costs beyond the salary. Here is the 2026 guide to calculating the true total cost of an employee for a UAE free zone company.
In this guide:
Total Employee Cost Components
- Base salary: Agreed monthly amount (AED per month)
- Employment visa: AED 3,000-6,000 per employee (one-time; renewal every 2-3 years)
- Health insurance (mandatory): AED 1,500-5,000/year depending on plan and emirate
- End of Service Gratuity (ESG) accrual: 21 days of basic salary per year for first 5 years
- Annual leave cost: 30 calendar days paid leave per year
- WPS salary processing: Small administrative cost (AED 50-100/month for payroll software)
Total Employment Cost Examples
Junior Employee (AED 5,000/month salary)
- Annual salary: AED 60,000
- Visa cost (amortized over 2 years): AED 2,250/year
- Health insurance: AED 2,500/year
- ESG accrual (21 days basic = ~AED 3,500): AED 3,500/year
- Total annual employment cost: AED 68,250 (14% above base salary)
Mid-Level Employee (AED 15,000/month salary)
- Annual salary: AED 180,000
- Visa cost: AED 2,500/year
- Health insurance: AED 4,000/year
- ESG accrual: AED 10,500/year
- Total annual employment cost: AED 197,000 (9.5% above base salary)
UAE vs. Home Country Employer Costs
- UAE: No payroll tax; no employer social security contributions; no pension contributions (except voluntary)
- UK: Employer NI 13.8% + pension 3% = 16.8% on top of salary
- Germany: Employer social security ~20% on top of salary
- UAE advantage: Significantly lower employer-side employment cost than most developed countries