Compensation and benefits are essential to ensure your employees’ happiness and longevity. These factors also play a crucial role in your compliance with United Arab Emirates (UAE) compensation laws.
G-P provides your company with access to local talent through our services in the UAE. We will hire employees who work on your projects and ensure that their payroll and benefits plans are locally compliant. You’ll be able to keep your focus on making sure your project succeeds.
United Arab Emirates Compensation Laws
The UAE does not have a national minimum wage for expatriates, but UAE nationals have specific salary requirements based on their education.
Another factor in the United Arab Emirates’ compensation laws is overtime. Employees who work on a Friday, which is designated as a statutory day off, are entitled to an increase of 50% or more in pay or another day off.
Guaranteed Benefits in the UAE
Your United Arab Emirates benefit management plan must include guaranteed benefits required by law. A good place to begin this plan is with time off. Employees are entitled to days off with full pay during the country’s official public holidays. Vacation leave depends on how long the employee has worked for your company, but the market norm is 30 calendar days of paid vacation.
Working women in the UAE who are pregnant are entitled to 60 days of maternity leave with full pay, 45 days full pay and 15 days half pay.
In UAE, 5 paid working days of Paternity leave is granted and can be taken consecutively or non-consecutively within the first six months of birth (available to mother and father).
United Arab Emirates Benefits Management
A strong United Arab Emirates benefit management plan includes both guaranteed benefits and additional perks that employees may expect in a particular position. UAE employment law stipulates all workers are entitled to a mandatory health insurance program that must be provided to all employees. It is not mandatory but common for employers in the UAE to provide employees’ dependents with employer-sponsored health insurance. If you work with G-P, our team in the UAE is all covered by private health insurance.
Restrictions for Benefits and Compensation
The United Arab Emirates does not have many restrictions on benefits and compensation, including no set minimum wage for expat employees. The UAE Penal Code (Law No. 3 of 1987, as amended) makes it a criminal offense for anyone to found to be, joining or participating in a Trade Union or to participate in a labor strike.
UAE Competitive Benefits Planning
As you grow your business in the United Arab Emirates (UAE), employee benefits planning is a pivotal consideration to help you recruit and retain employees. You’ll want to create a plan that balances crucial operational requirements, legal compliance, and local market standards.
UAE Employee Benefits Plans
When you build an employee benefits plan internationally, having an in-depth understanding of the economy and local expectations can help you create a program that offers more value. Beyond managing compliance, you want to build a benefits plan that addresses your employees’ needs and shows that you appreciate them. Supporting new hires as part of your team can help you set your company up for success.
Your benefits plan can also give you a competitive edge in the job market. You can provide a range of supplemental benefits to set your company apart, such as:
- Pension contributions
- Access to counseling services and support
- Flexible working hours
- Financial advisory services
- Part-time work opportunities
- In-house educational resources and support
- Supplemental maternity and paternity leave
- Wellness and health events
- Performance awards
Requirements for Employee Benefits in UAE
Compliance will also play a role in the benefits you offer. Your employees are entitled to these mandatory provisions in the UAE:
- Paid annual leave of 30 days each year
- Maternity leave of at least 60 days
- Holiday leave
- Parental leave of up to 5 days
- Sick leave
- Health insurance
How to Design Your Employee Benefits Program
Benefits requirements and market conditions will be unique to the local economy and labor laws. To successfully manage these standards, you can follow a consistent strategy.
1. Identify Your Budget and Objectives
As you establish your benefits program, you first need to determine your goals and set a budget. Setting the program’s scope and working with your available financial resources will help you develop a sustainable long-term plan.
Consider whether your current goal is to build and support a large team or if you’ll start by investing in a smaller core group of employees. You can build your plan around these factors.
2. Examine Employee Needs
Your employees in the region will have unique needs. The best way to ensure you’re meeting those needs is to discuss them directly.
Plan to hold interviews with local employees or send out questionnaires to learn more about market standards and employee expectations in the area. Research what employees look for in a benefits plan and identify underserved needs they may have. You might also research local companies’ benefits during this stage to see if you can match them.
3. Apply Your Research to Your Program
After you have reliable data on employee needs, integrate your research into the plan you build. Remember that outsourcing expenses, employee contributions, administration costs, and cost containment features will all influence your final program expenses.
Average Cost of Benefits Per Employee
Because benefits programs depend on a wide range of operational and local market factors, costs can vary from one company to another. Rather than aiming for a national average, ensure your plan works with your available financial resources and provides room for growth.
How to Calculate Employee Benefits
National labor laws outline the specific percentages you’ll use to calculate benefits such as annual leave, maternity leave, and sick leave.
As an employer, you must contribute 12.50 percent of each employee’s income for social security benefits. Note that the social security system is for Emiratis only, not for nonnationals.
As for any fringe benefits you may provide, you can determine competitive rates in the region based on your research.
How Are Employee Benefits Taxed in the UAE?
The UAE currently has no established personal income tax, so you do not need to withhold income taxes from your employees. As such, benefits are not subject to taxes in most cases. If you are unsure about a specific employee’s situation, you may consult the local tax authorities.
Employee Health Benefits Plans
In the emirate of Dubai, employers are responsible for providing health insurance for all employees. Other emirates within the UAE may vary, but providing health insurance options is a common practice. Many private insurance companies offer plans, so you have several options to choose from for your employees.
Choose G-P for Optimized Benefits Planning
G-P offers worldwide resources for your business. Request a proposal today.