Calculate the total monthly cost to a UAE employer. Includes basic salary, housing and transport allowances, gratuity accrual at 8.33%, MOHRE fees, and visa costs amortized monthly.
Find the true monthly cost of employing someone in the UAE.
Total employer monthly cost
--
Total cash package
--
Monthly gratuity accrual (8.33%)
--
Monthly overhead (visa, ins.)
--
Overhead as percent of package
--
Your breakdown
Updates live as you type
Item
Amount
True cost of employment in UAE
The salary package you offer an employee is not the full cost of employment. UAE employers must also fund end-of-service gratuity accruals throughout the employment period, pay for visa sponsorship costs, and provide mandatory health insurance. Together these statutory and quasi-mandatory costs typically add 15 to 25 percent on top of the cash package, depending on salary level and the employee’s visa and insurance needs.
Gratuity as a deferred cost
End-of-service gratuity is not paid monthly; it is settled when the employee leaves. However, it accrues throughout employment and represents a real liability for the employer. For the first five years, gratuity accrues at 21 days of basic salary per year. After five years it rises to 30 days per year. Many companies set aside a monthly provision to ensure they have funds available when employees depart. Using 8.33 percent of basic salary per month as the provision rate is a conservative and commonly used approach.
Visa and administrative overhead
Work permit and residence visa costs, Emirates ID fees, MOHRE registration, and medical fitness tests must be borne by the employer under UAE Labour Law. Visa renewals occur every 2 to 3 years and involve recurring costs. For high-turnover roles the annual per-head cost of visa administration can be substantial. Adding these costs into your per-employee budget helps with accurate workforce planning and avoids surprises when onboarding or renewing large cohorts of staff simultaneously.
Frequently asked questions
How much does it cost an employer to hire someone in the UAE?
The total cost to a UAE employer is the sum of the employee package plus employer-side statutory costs. The main items are: basic salary and allowances (100 percent of agreed package), end-of-service gratuity accrual (approximately 8.33 percent of basic salary for years 1 to 5, rising to 11.11 percent after 5 years for a monthly accrual), MOHRE work permit and quota fees (approximately AED 500 to 1,000 per year amortized), and visa sponsorship costs including Emirates ID, medical, and flight (approximately AED 4,000 to 6,000 every 2 to 3 years amortized). Health insurance is also mandatory and adds AED 500 to 2,500 per month depending on coverage.
How is gratuity accrual calculated for employers?
UAE employers must accrue end-of-service gratuity throughout employment. For the first 5 years, the statutory entitlement is 21 days of basic salary per year (21/30 months, which is 70 percent of one monthly basic per year, or approximately 5.83 percent per month). This calculator uses the commonly cited 8.33 percent figure (one month per year), which approximates to 30 days per year, a conservative accrual used by many employers to account for both tiers. Actual liability depends on final basic salary and total years served.
Are UAE employers required to contribute to a pension scheme?
Expatriate employees in the UAE are not covered by a mandatory pension scheme. End-of-service gratuity is the statutory severance equivalent. UAE and GCC national employees are covered by social security through GPSSA (General Pension and Social Security Authority), to which employers contribute 12.5 percent and employees contribute 5 percent of basic salary. For expatriates, the employer obligation ends with gratuity. Some employers voluntarily contribute to DEWS (Dirhams End of Service Scheme) as an alternative to holding gratuity reserves.
What visa costs does a UAE employer bear?
UAE employers sponsoring an employee typically bear: employment visa (AED 1,000 to 2,000), Emirates ID (AED 270 per year), medical fitness test (AED 300 to 500), MOHRE e-contract fee, and a return air ticket to home country at end of service or leave cycles. For Dubai Mainland, a refundable bank guarantee of AED 3,000 per employee may be required. These costs recur every 2 to 3 years when visas are renewed. The monthly amortized cost across a typical 2-year visa cycle adds AED 200 to 500 per employee per month.