As of 2025, around 88% of the UAE’s workforce is expats. And while this makes the workplaces diverse with knowledge and skillset, it also brings up an important point: understanding employee benefits and leave entitlements is necessary for knowing your rights.
UAE labour law, specifically Federal Decree-Law No. 33 of 2021, goes far more into detail about how compensation, leave, health coverage, and gratuity work.
Understanding Employee Benefits in the UAE
Employee benefits in the UAE are a mix of rights, legal entitlements, and incentives. In a market as competitive as UAE’s, offering fair and comprehensive benefits builds loyalty and boosts productivity among your staff.
Mandatory vs. Non-Mandatory Benefits
Under employee benefits UAE regulations, mandatory benefits include essentials like annual leave, health insurance, and end-of-service gratuity. These are non-negotiable under UAE labour law.
Supplementary or non-mandatory benefits, on the other hand, are where employers can shine by offering bonuses, flexible work, or relocation support to stand out in hiring and retention.
Why Benefits Matter for Both Employers and Employees
For employers, benefits reinforce a positive reputation and keep turnover low. For employees, they’re a sign of value and respect. The right balance makes both sides win: compliance for employers, stability for employees.
Mandatory Employee Benefits as per UAE Labour Law
Every employee in the UAE is entitled to certain statutory benefits. These form the foundation of fair employment, safeguarding both employers’ and employees’ interests.
Salary and Payroll Cycle
Under Article 27 of the Labour Law, employees must be paid at least once a month through the Wage Protection System (WPS).
While there’s no federal minimum wage for expats, Emiratis have structured pay floors based on qualification levels. Employers should ensure prompt and transparent payments to avoid disputes and maintain trust.
Working Hours and Overtime
According to working hours in UAE guidelines, standard hours are capped at 8 per day or 48 per week.
Employees who work beyond this are entitled to overtime: 125% pay for regular overtime and 150% for work at night or on public holidays.
Health Insurance Coverage
Health coverage isn’t optional. Employers in Dubai and Abu Dhabi must provide valid insurance to every employee.
Dependents aren’t included under this obligation, but some employers extend it as part of premium packages. Without valid health insurance, an employee’s visa can face suspension, and employers can be fined.
End of Service Gratuity (EOSB)
Often the most anticipated part of employee benefits in UAE, gratuity acts as a retirement cushion.
Employees completing one year or more of service earn 21 days of basic pay per year for the first five years and 30 days thereafter, capped at two years’ salary.
Types of Leaves in the UAE
Work-life balance is upheld by the law as well. UAE’s labour law defines several types of leaves in UAE to help employees recharge, recover, and handle personal matters responsibly.
Annual Leave in the UAE
Under annual leave in UAE, employees who complete one year of service are entitled to 30 calendar days of paid leave. Those with six months to a year get two days per month. Employers must pay leave salary before the leave begins.
Sick Leaves in the UAE
For sick leave in UAE, employees with at least three months of continuous service qualify for up to 90 days per year: 15 with full pay, 30 with half pay, and 45 unpaid.
This directly answers your question of ‘how many medical leaves per year in UAE?’ Exactly 90 days with a valid medical certificate being required.
Maternity Leaves in the UAE
Under maternity leave in UAE rules, female employees get 60 days of leave: 45 with full pay and 15 with half pay. They have the option for another 45 unpaid days for medical reasons.
Paternity and Parental Leave
New parents, both mothers and fathers, get 5 days of paternity leave in UAE within six months of childbirth. These can be taken consecutively or split across days.
Compassionate (Bereavement) Leave
Employees can take bereavement leave in UAE: five days for a spouse’s death, three for a close family member.
Study Leave and Sabbatical Leave in UAE
Employees pursuing education in UAE-certified institutions get 10 days per year for exams after two years of service.
Sabbatical leave in UAE for expats doesn’t apply. But UAE nationals are eligible for it if they are serving in national programs.
Public Holidays and Eid Leaves in UAE
Employees enjoy all national holidays declared by the UAE government. These are usually about 14 days a year, covering Eid al-Fitr, Eid al-Adha, National Day, and more.
Additional Employee Benefits and Allowances in the UAE
In a market full of competitive employers, going beyond the law can be a dealbreaker or a dealmaker. Supplemental benefits can give you the edge as an employer.
Performance Bonuses and Allowances
Many companies offer housing, transport, and travel allowances or bonuses tied to performance goals. These perks motivate employees and show recognition beyond the monthly paycheck.
Pension and Social Security Contributions
For UAE nationals and GCC citizens, employers contribute 12.5% toward pensions, while employees contribute 5%, and the government adds 2.5%. It is managed by the General Pension and Social Security Authority (GPSSA).
Repatriation Ticket
When a contract ends, the employer should cover the cost of returning the employee to their home country unless they have already joined another employer.
How Employee Benefits Impact Engagement and Retention
When people feel valued, they stay. That’s the simplest summary of how UAE employee benefits affect engagement.
Financial and Emotional Security
Health insurance, fair pay, and gratuity go beyond financial comfort. These build trust too. Employees who feel secure are more productive and loyal.
Work-Life Balance
Balanced leave policies show employers care about life beyond work. It not only gives you a chance at rest, but also the opportunity for a mental reset.
Attraction of Top Talent
Companies offering competitive packages attract top candidates faster. With transparent UAE employee benefits calculator tools, job seekers can easily compare offers, making transparency even more vital.
How Employers Can Stay Compliant with UAE Labour Law
Ignoring benefit obligations leads to legal consequences. From fines to suspension of work permits, compliance matters.
Maintain Transparent Contracts
Outline all salary, benefits, and leave entitlements clearly in employment contracts. It prevents disputes and builds confidence.
Regularly Review MOHRE Updates
Laws tend to change and update. Stay current with updates from the Ministry of Human Resources and Emiratisation (MOHRE) to meet the latest requirements on benefits of terminated employees in UAE and avoid any lapses.
Conclusion
Understanding employee benefits as per UAE labour law empowers you to create workplaces that reward, protect, and empower your workforce.
Employers who invest in well-being and compliance enjoy stronger teams and fewer legal hassles. And employees who understand their rights can make informed career decisions confidently.
At RAAD Recruitment, we help businesses optimize their compensation and benefits strategy to attract and retain top talent while staying compliant with UAE’s labour law.
Get in touch with us to learn more about how our Emiratisation services support compliance and national hiring goals.
FAQs
What Are the Mandatory Employee Benefits in The UAE?
They include annual leave, health insurance, public holidays, end-of-service gratuity, and paid sick leave as defined by UAE Labour Law.
How to Calculate Benefits in UAE?
Use a UAE employee benefits calculator or consult MOHRE for formulas that account for tenure, basic pay, and unused leave days.
Do Expats Get Gratuity Benefits in The UAE?
Yes, gratuity applies to both UAE nationals and expatriates who complete at least one year of continuous service.
Are Employers Required to Provide Health Insurance to Employees?
Yes, in Dubai and Abu Dhabi, employers must provide valid health insurance coverage for every employee.
How Much Gratuity After 1 Year in UAE?
After one year, employees are entitled to 21 days of basic pay per completed year of service, as part of the gratuity and employee benefits program UAE.
