Perfect Employee Benefits in Dubai (2024)

Perfect Employee Benefits in Dubai (2024)

Perfect Employee Benefits in Dubai (2024)

August 22, 2023

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Key Takeaways

  1. The General Pension and Social Security Authority (GPSSA) provides pension-related services to citizens employed in federal government entities and the private sector
  2. Employers must share contributions equivalent to 20% of an employee’s standard salary. This 20% is split into 5% payable by the employee, 12.5% payable by the company, and 2.5% payable by the government
  3. As of 2022, Emirati and resident employees must pay a minimal fee per month which goes towards their unemployment insurance
Summary

 

 

As part of the UAE, international business expansion into Dubai allows companies to access new markets, gain competitive advantage, and grow revenue. However, it’s key for companies to attract top talent and maintain a happy workforce to succeed in the UAE. As a result, many employers are happy to offer extra employee benefits in Dubai in addition to those which are by law.

Full compliance with local labor laws requires being familiar with employer duties and the structures to properly manage HR functions. As an employer in the UAE, you must be able to manage all employee benefits in Dubai, as well as follow local benchmarks to offer good optional benefits.

Because of the risks for non-compliant companies, INS Global has created this article which shows the importance of employee benefits in the UAE, which benefits are mandatory or optional, and how companies can profit from outsourcing such duties to an Employer of Record in Dubai.

 

Mandatory Employee Benefits in Dubai

 

Labor laws in Dubai demand that employers provide certain employee benefits to comply with the local requirements and avoid fines or penalties due to non-compliance.

In general, many of these national requirements relate only to Emiratis and those with residency status. For many foreign employees, private alternatives are more common.

The following are mandatory employee benefits in Dubai:

 

–       Retirement benefit

–       Medical care benefit

–       Unemployment benefit

–       Work-Injury and disability benefit

–       Maternity benefit

–       Wage Requirements

 

Retirement Benefits in Dubai

 

The retirement age in Dubai is 60 years, and foreign employees must stop working by age 65. The General Pension and Social Security Authority (GPSSA) provides pension-related services to citizens employed in federal government entities and the private sector across The United Arab Emirates.

An employee can have a pension if they complete 20 years of service and are at least 50 years of age.

The GPSSA only covers UAE nationals and not expatriates or foreign workers. Expatriate employees in the UAE typically have different pension arrangements, and many private companies offer their own pension or end-of-service gratuity plans to foreign workers.

 

Social Security Benefits and Employer Contributions in Dubai

 

As part of the UAE, company taxation is a complex subject, requiring an understanding of the law in both theory and practice. In practice, many foreign companies will only pay around 9% tax on company income (although this increases dramatically in some sectors like oil).

Instead, employers must share contributions equivalent to 20% of an employee’s standard salary. This 20% is split into 5% payable by the employee, 12.5% payable by the company, and 2.5% payable by the government, and contributions are part of monthly payroll procedures.

In Dubai, foreign employers also contribute to the Dubai International Financial Centre (DIFC), the DIFC Employee Workplace Savings Scheme (DEWS), at 5.83%-8.33% of an employee’s monthly salary.

These contributions largely pay for the mandatory employee benefits in Dubai below.

 

Health and Medical Care Benefits in Dubai

 

The GPSSA provides medical care benefits to UAE nationals and their dependents. Employers in Dubai must register their local employees with this scheme.

However, the medical care benefits for expatriates in Dubai are employer-sponsored health insurance plans since the GPSSA does not cover expatriates.

 

Unemployment Benefits in Dubai

 

As of 2022, Emirati and resident employees must pay a minimal fee per month which goes towards their unemployment insurance. This fee is according to whether the employee earns more than AED16,000 per month and costs between AED5-10 per month.

Those who make use of their unemployment insurance can receive 60% of their previous salary for 3 months after losing their job, capped at AED10,000 or AED20,000 depending on their contributions.

 

Work-Injury and Disability Benefits in Dubai

 

In Dubai, work-injury and disability benefits are part of the social security system for supporting employees who suffer from work-related injuries and disabilities. The GPSSA provides these benefits, covering hospital care and the cost of medication for injured or disabled workers.

 

Paid Leave in Dubai

 

In Dubai, employees have 8 days of paid public holidays yearly.

Similarly, employees can have annual paid vacation days based on the length of their employment as follows:

 

  • 0 days – Less than 6 months of employment
  • 2 days monthly – For 6 -12 months of employment
  • 30 days – 1 year and above of employment

Additionally, employees in Dubai can take up to 90 days of sick leave in a year.

 

Maternity Benefits in Dubai

 

Female employees with an employment tenure of at least one year can have up to 45 days of fully paid maternity leave and 15 days of half-paid leave in Dubai. Employees who have been with their company for less than a year will receive 50% of their wages during those 45 days and may also take an additional 10 days of unpaid leave.

In Dubai, new fathers are eligible for 3 days of paternity leave. Parents can also have 5 working days of parental leave in the first 6 months after a child’s birth.

 

Minimum Wage in Dubai

 

There is no set minimum salary in Dubai. However, according to the laws of the UAE, employers must provide a salary that meets the needs of their workers. While open to interpretation, this does mean that employees can expect a salary that covers their basic expenses at the very least and differs according to their experience and education.

 

 

Common Types of Additional Employee Benefits in Dubai

 

 

In addition to the mandatory employee benefits in Dubai described above, companies in the UAE might also be offering fringe benefits payments as a way to attract talent and promote productivity.

 

Extra Healthcare Coverage

 

In Dubai, it’s common for employers to offer employees supplementary health coverage, including massage therapy or physical therapy, dental, and vision coverage. Also, these healthcare benefits may cover 3-4 employee dependents, such as spouses and children.

You can also add better life insurance options through group plans if your employees ask for it.

 

Performance-based Incentives

 

Some employers in Dubai have a compensation and reward system for motivating employees. These incentives as employee benefits in Dubai may be cash bonuses, gift cards, or recognition awards for encouraging productivity, higher quality work, and close alignment with the company’s objectives.

 

Additional Perks

 

Many employers will also provide guaranteed employee benefits in Dubai as part of the overall employment package, including paying for travel expenses or providing transportation and offering housing, or paying education fees for foreign employees with dependents.

 

Flexible working options

 

Since the COVID-19 pandemic, more companies with employees living in Dubai now favor remote work or hybrid working hours, allowing employees to enjoy a better work-life balance and be more productive.

 

Personal development opportunities

 

Some organizations in Dubai offer upskilling opportunities to employees through training programs, workshops, and online learning platforms. This initiative helps employees become more skillful and valuable to their organizations.

 

Virtual team-building activities

 

As remote work becomes more prevalent, Dubaian companies are organizing virtual team-building activities to foster trust and friendship among team members.

 

An Analysis of Employee Benefits Trends in Dubai in 2024

 

Labor rights and protections in Dubai and the wider UAE are subject to a lot of criticism globally. Despite a legal framework protecting the rights of workers, in practice, there is widespread exploitation of migrant labor, and as a result, potential employees may be cautious about joining a company in Dubai. However, foreign companies must guarantee the rights and benefits of the workers they hire in Dubai in order to be compliant with local laws.

Labor market competition, local employment regulation, and global HR trends have dramatically impacted employee benefits in Dubai in recent years. Reforms in 2021 and 2022 were attempts to better organize labor on a national level, but much work remains. The full effects of these reforms may not be apparent for some time.

Recent changes are part of a general desire to develop and diversify the economy, bringing in skilled professionals to boost the productivity of local and foreign companies. To find the best talent in the progressively more competitive labor market, many employers offer extra pension plans and healthcare benefits, including medical check-ups and insurance coverage, in addition to government-mandated employee benefits in Dubai.

However, it’s vital to remember that the best candidates in Dubai still think about salary levels when considering job prospects, especially as wage increases have slowed in recent years. This means that while offering benefits is a good way to create a well-rounded EVP (Employer Value Proposition), it can’t simply replace competitive wages. Instead, these benefits must be part of a holistic hiring process.

 

Understanding the Importance of Employee Benefits

 

Offering a robust benefits package to employees in Dubai allows companies to attract a skillful and talented workforce since job seekers evaluate employment benefits when choosing job opportunities. Such benefits promote employee satisfaction through a positive work environment and are crucial for talent retention and maintaining high morale among employees.

Similarly, employee health and wellness benefits like health insurance or on-site fitness facilities help to improve workers’ overall well-being, leading to timely and consistent work outputs.

 

How Can INS Global Boost Your Business in Dubai?

 

Offering robust employee benefits in Dubai allows employers to attract, retain, and motivate skilled and talented employees. However, taking care of such benefits yourself can distract you from your main expansion objectives or cause more complications than they’re worth.

Consequently, more and more companies now prefer to outsource their employer duties overseas to an Employer of Record (EOR) partner. An EOR in Dubai handles all employer liabilities, including hiring employees, documenting and issuing employment contracts, managing payroll, benefits, and ensuring regulatory compliance on your behalf.

With these professional support services, companies do not need to establish a branch office in Dubai. Instead, your EOR partner becomes the legal employer to your local staff, handling your employment and HR-related duties. This includes accurate and competitive employee benefits in Dubai, allowing you to focus on core business activities.

An EOR partner like INS Global, with over 15 years of multiple-industry expansion experience and a local presence, can facilitate your expansion in Dubai and beyond.

So, why not contact our team of employment, HR, legal, and recruitment service specialists today for a free consultation to learn more about how an EOR solution can help offer the best employee benefits in Dubai?

 

employee benefits in Dubai

 

FAQ

 

Which piece of legislation guarantees employee benefits in Dubai?

Dubai labor law mandates certain benefits for employees in Dubai and the UAE, including annual leave, end-of-service gratuity, and medical coverage. Employers must comply with these regulations.

The majority of labor laws in Dubai that outline the employer-employee relationship and mandatory employee benefits this brings are in Federal Decree (Law No. 33) of 2021. There are also relevant government decrees which provide further details.

 

Can a company in Dubai offer additional employee benefits in Dubai beyond those required by law?

Many companies will provide extra employee benefits in Dubai to attract and retain talent. These benefits and perks in Dubai may include as many performance bonuses or flexible working arrangements as you want, alongside fringe benefits like gym memberships, cars, and more.

 

What is an Employer of Record (EOR) in Dubai? How does an EOR service in Dubai work?

An Employer of Record in Dubai is an employment outsourcing solution that allows companies to hire employees abroad without a local legal entity. The EOR acts as the official employer for your employees, handling payroll, taxes, compliance, and all other HR responsibilities including employee benefits in Dubai.

 

Why would my company use an EOR service in Dubai?

Using an EOR service in Dubai is beneficial for all companies looking to expand without setting up a local entity. Professional EOR support streamlines hiring, ensures compliance with local labor laws, and saves time and resources by making the most of local resources, expertise, and established networks.

 

Can an EOR service in Dubai handle all my required and further employee benefits in Dubai?

Yes, many EOR services in Dubai can manage employee benefits like healthcare, insurance, and other perks on your behalf for a single monthly fee.

 

What are the advantages of using an EOR service in Dubai?

Using an EOR service to offer employee benefits in Dubai provides:

  • cost savings
  • a much faster market entry
  • legal compliance guarantees
  • access to local expertise and resources
  • a reduced administrative burden
  • work visas and required permits support

 

How do I choose the right EOR service in Dubai?

In recent years, many companies have begun to offer low-cost, low-quality EOR services promising the best employee benefits in Dubai at cut-rate prices. They promise new horizons without the right amount of experience or expertise to guarantee the safety of your employees and business. That’s why it’s essential to consider every factor. This includes an EOR’s experience, reputation, range of services, pricing, and ability to handle your specific needs in Dubai.

 

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