Employer of Record (EOR) in United Arab Emirates
An EOR in the UAE allows businesses to enter the market quickly and help maintain compliance with local laws, all while reducing the overhead costs of establishing a local entity. Atlas HXM offers a seamless EOR service that handles all aspects of employment from payroll processing to visa coordination and compliance administration.
Partner with Atlas HXM for a cost-effective, compliant solution to hire and manage your workforce in the UAE.
Quick Overview of EOR in United Arab Emirates
Expanding into the United Arab Emirates doesn't have to mean drowning in paperwork or hefty setup costs. With an Employer of Record (EOR), you can bypass the complexities of local regulations and quickly hire employees, all while maintaining compliance with the UAE's labor laws. From payroll processing and tax compliance to benefits management, an EOR takes care of the legal nitty-gritty like end-of-service gratuity calculations and work permit coordination, so you can focus on growing your business without the need to set up a costly local entity.
The EOR model offers a low-risk, cost-effective alternative to setting up a subsidiary. Establishing a local entity in the UAE can cost anywhere from USD 13,600 to USD 27,200 (AED 50,000 to AED 100,000) plus the cost of maintaining human resources (HR), legal assistance, accountants and more. It can also become highly administrative. By partnering with an EOR, you can avoid these setup costs and enter the market faster, avoiding the overhead of a physical office. This is especially beneficial for startups, SMEs, and businesses testing new markets, who need to act quickly and comply with complex local regulations.
How an EOR Works
Atlas HXM provides EOR services that ensure your business remains compliant with the UAE's labor laws while you focus on growing your operations, free from administrative and legal burdens.
Candidate Selection
Atlas HXM does not recruit candidates but will check the employment setup for compliance around new hires like validating right-to-work, reviewing contract terms against UAE rules, and configuring payroll and statutory obligations correctly. EOR providers in the UAE, including Atlas HXM, can assist with work permit and visa applications through the Ministry of Human Resources and Emiratisation (MoHRE), ensuring proper documentation and compliance with UAE immigration requirements.
Employment Contracts
Atlas HXM drafts and administers employment contracts in compliance with Federal Decree-Law No. 33 of 2021 on the Regulation of Labor Relations. In the contract, we clearly outline employment terms to reduce the risk of future disputes, such as:
Job title and responsibilities
Salary, benefits, and working hours
Leave entitlements and notice periods
Termination terms and conditions
Payroll & Benefits Management
Payroll is processed in UAE Dirhams (AED), including:
Accurate end-of-service gratuity calculations and mandatory benefits
Statutory benefits such as medical insurance and annual leave
Remitting Social Security contributions for the local employees to GPSSA
The EOR also helps maintain compliance with mandatory benefits, so employees are protected under the UAE's laws.
Work Permit Compliance
In the UAE, Atlas HXM coordinates with MoHRE to obtain necessary work permits and residence visas for foreign employees, managing the complex visa application process including medical examinations and Emirates ID applications.
Ongoing HR Support
Provides HR support, including: Leave management, employee relations and regulatory updates throughout the employee's tenure. This allows businesses to focus on core operations, while Atlas HXM handles ongoing compliance.
What to Choose: EOR vs PEO
Work Life in United Arab Emirates
The UAE's employment framework is designed to balance operational needs with employee protections. Here's what you need to know:
Employment Types:
Fixed-Term: Hired for a specific project or defined duration,with full statutory benefits.
Temporary: Short-term assignments; entitled to statutory benefits like leave and overtime.
Probation Periods: The probation period cannot exceed six months from the date of employment, allowing both parties to evaluate suitability. Employers must give 14 days' written notice to terminate during probation. Employees must provide 30 days' notice to resign to join another local firm, or 14 days if leaving the UAE The EOR ensures that all terms are compliant with UAE labor law.
Working Hours & Overtime: In the UAE, the maximum workweek is 48 hours, with a maximum of 8 hours per day (7 hours for arduous or unhealthy jobs). Employees under 18 cannot work over 6 hours daily. During Ramadan, working hours are reduced to 6 hours per day for employees. Overtime is paid at 125% of regular pay (150% for working in Weekend/Rest Day or night shifts between 10 PM and 6AM), limited to 2 hours daily. The EOR ensures that all overtime is calculated correctly and that employee work hours comply with local regulations.
Leave Entitlements
Leave Type | Eligibility / Duration | Payment / Notes |
|---|---|---|
Annual Leave | a minimum of 30 calendar days of paid annual leave after completing one year of service. If employment lasts between six months and one year, a minimum of 2 days per month is accrued | Unused leave can be carried forward, encashed, or paid out upon service termination, based on basic salary |
Maternity Leave | 60 days | Full pay for 45 days, half pay for 15 days; additional 30 days for sick/disabled child |
Paternity Leave | 5 days | Eligibility: Applies to both parents (mother or father) in the private sector to care for a child. Timeline: Must be used within 6 months of the child’s birth. Flexibility: Days can be taken consecutively or intermittently. |
Sick Leave | 90 days annually after probation | 15 days full pay, 30 days half pay, 45 days unpaid; medical certificate required |
Public Holidays | All statutory holidays | Paid; compensatory day off or 50% additional pay if worked |
Payroll & Benefits: UAE nationals must receive minimum AED 6,000 monthly from January 2026. Atlas HXM manages payroll in AED, end-of-service gratuity calculations, statutory benefits, bonuses, and medical insurance. Supplemental benefits can include housing allowances, transportation allowances, and annual flight tickets.
Atlas HXM can help you manage these aspects and can help ensure that employees are supported and compliant with the UAE's labor laws while businesses can focus on operations without administrative burdens.
What to Choose: Indirect vs Direct EOR
Taxes & Compliance
The UAE operates a unique tax system with no personal income tax. Corporate tax was introduced in 2023 at 9% for profits exceeding AED 375,000. VAT returns are due quarterly by the 28th of the following month, while corporate tax returns are due within 9 months of financial year-end.
Category | Details |
|---|---|
Employer Payroll Tax | No payroll taxes; Social security contributions for UAE nationals (rates vary by emirate)
|
Employee Payroll Tax | No personal income tax
|
Pension System | Retirement age: 60 for expatriates (varies by emirate), 49 for UAE nationals with 20 years service
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VAT & EOR Costs: The UAE applies 5% VAT on most goods and services, including EOR services. Companies may recover input VAT if VAT-registered and using services for business purposes.
Atlas HXM handles compliance including end-of-service gratuity calculations, social security contributions for UAE nationals, VAT management on services, and coordination with labor authorities, ensuring businesses remain compliant with local laws while minimizing administrative burden.
Termination
Employment contracts can be terminated with 30-90 days written notice.
During probation, employers must give 14 days' written notice to terminate during probation. Employees must provide 30 days' notice to resign to join another local firm, or 14 days if leaving the UAE
End-of-service gratuity is mandatory: 21 days salary per year (1-5 years service) or 30 days salary per year (5+ years), capped at 2 years total salary.
Employers must maintain AED 3,000 bank guarantee per employee.
The EOR helps ensure proper handling of terminations, including gratuity calculations, final wages, and required documentation.
Visas & Work Permits
In the UAE, foreign nationals generally require a work permit in order to be employed by a UAE entity. For mainland companies, work permits are issued by the Ministry of Human Resources and Emiratisation (MoHRE), while employees sponsored by free zone entities obtain work authorization through the relevant free zone authority. Work permits require a signed employment contract and employer sponsorship. Typically, the process of obtaining the work permit takes approximately 4–5 business weeks. Atlas HXM coordinates the end-to-end immigration process, including work permit applications, medical examinations, Emirates ID registration, and residence permit processing, while ensuring compliance with all applicable labor and immigration requirements.
5 Things to Look for in an EOR Provider in United Arab Emirates
Local expertise and knowledge of UAE labor laws, emirate-specific requirements, and MoHRE procedures.
Advanced technology for payroll, end-of-service calculations, and HR system integration.
Experience with visa processing, work permit management, and Emiratisation compliance.
Strong compliance track record and relationships with government agencies and legal advisors.
Global presence to support multi-country expansion, with verified security and compliance standards (ISO 27001/27017/27018, GDPR).
Atlas HXM provides direct EOR services, managing payroll, compliance and benefits efficiently. Atlas HXM's unified platform automates HR, payroll, and compliance tasks, while offering premium employee support, global benefits, and access to 9,000+ learning courses. Recognized by Everest Group PEAK Matrix 2025 and NelsonHall NEAT Assessment 2026, Atlas HXM combines compliance, technology, and global expertise.
FAQs
How long does it take to hire an employee through an EOR in the UAE?
The typical timeline is 2-3 weeks from contract signing to employee start date, including visa processing and work permit approval.
What is the minimum wage in the UAE?
UAE nationals must receive a minimum AED 6,000 monthly starting January 2026. No statutory minimum for expatriates.
What is the typical probation period?
Usually 3-6 months and must be in the employment contract.
How much notice is required for termination?
30-90 days written notice for standard employment; 14 days from employer during probation.
How is end-of-service gratuity calculated?
1-5 years: 21 days salary per year; 5+ years: 30 days salary per year, capped at 2 years total.
Can employees work overtime without limits in the UAE?
. Overtime is paid at 125% of regular pay (150% for wroking in Weekend/Rest Day or night shifts between 10 PM and 6AM), limited to 2 hours daily.