Hiring your first employee in Dubai: permits, contracts and payroll

Hiring in Dubai is a permit process before it is an HR process. On the mainland, nobody can start work until the Ministry of Human Resources and Emiratisation (MOHRE) has issued a work permit, and the residence visa, medical test and Emirates ID follow from that. In a free zone, the free zone authority issues the permit and visa instead. After the hire, three things run every month: salary through the Wage Protection System (WPS), health insurance, and gratuity building up in the background.

This guide covers the sequence for a first hire, the contract terms the law fixes and the costs beyond salary. The rules come from Federal Decree-Law No. 33 of 2021, the UAE Labour Law, and its amendments. It is general information, not legal advice.

Mainland or free zone: who issues the permit?

• Mainland companies need a MOHRE work permit for every employee. Article 6 of the Labour Law makes it illegal to work without one, and illegal to employ someone without one. Residence then goes through GDRFA Dubai.
• Free zone companies apply to their free zone authority for the employment permit and residence visa. Free zone employment rules generally sit alongside the federal Labour Law, but DIFC and ADGM run their own employment frameworks.

Either way, the number of people you can hire is limited. On the mainland, MOHRE sets a quota based on your legal form, the size of your premises, your projects and your business needs. In a free zone, the visa allocation depends largely on the package you sign up for. Check the visa numbers before you sign a lease or a package, not after. If you are still choosing a setup, our business setup team can size the licence and office to your hiring plan.

The hiring sequence on the mainland

1. Register with MOHRE. Open the establishment file and get an establishment card and number, then apply for the electronic signature card, which MOHRE may issue after inspecting your premises. Open an immigration file with GDRFA Dubai as well.
2. Agree the job offer. MOHRE's standard offer is in Arabic and English, with a third language if the worker asks for one. The worker signs it before you apply.
3. Apply for the work permit. The worker must be 18 or over, the job must match an activity on your licence, and the licence must be valid with no violations. Qualifications for the role must be attested by the UAE Ministry of Foreign Affairs. Pay the fees and the worker protection guarantee or insurance within 60 days of approval, or the permit lapses.
4. Entry permit or change of status. GDRFA Dubai issues a work entry permit valid for two months, or the worker changes status inside the UAE.
5. Medical test, fingerprints and insurance. Within those two months the worker passes the medical test and gives fingerprints for the Emirates ID. Health insurance must be in place before the residence is issued.
6. Register the contract. The contract, matching the signed offer, goes to MOHRE within 14 days of the worker's arrival or change of status.
7. Residence issued. GDRFA Dubai issues private-sector residence for two years.

In Dubai, the Work Bundle platform (workinuae.ae) combines most of these steps into one application. Attestation of qualifications happens in the worker's home country and can take longer than everything else, so start it as soon as the offer is agreed; our guide to document attestation explains the chain.

What the employment contract must cover

MOHRE's standard forms do much of the drafting, but these terms are set by law:

• A fixed term. The 2021 law abolished unlimited contracts. Contracts are fixed-term and can be renewed.
• Probation of up to six months, which cannot be extended. If you end employment during probation, give 14 days' written notice. An employee who leaves during probation to join another UAE employer gives one month's notice, and the new employer compensates you for recruitment costs unless you agreed otherwise.
• Notice of 30 to 90 days after probation, the same for both sides unless the difference favours the worker.
• Working hours of 8 a day or 48 a week, with overtime paid at basic pay plus 25 per cent, or plus 50 per cent between 10 pm and 4 am.
• Annual leave of 30 days after a year of service, and 2 days a month once the employee has served six months.
• A non-compete clause, if you need one, limited in time, place and type of work, and to no more than two years after the contract ends.

Pay attention to the split between basic salary and allowances. Gratuity, overtime and pay for unused leave are all calculated on basic pay, so the split is a cost decision, not a formatting choice. Say you hire a sales executive at AED 9,000 a month, with AED 6,000 basic and the rest as housing and transport. Every one of those entitlements is worked out on the AED 6,000. Decide the split deliberately, write it into the offer and keep it consistent across the team.

Payroll: WPS, health insurance and unemployment insurance

Wage Protection System. Every company registered with MOHRE pays salaries through WPS, using a bank, exchange house or other institution authorised by the Central Bank. Under Ministerial Resolution No. 340 of 2026, the previous month's salaries are due on the first day of each month, and at least 85 per cent of the wages due must be paid on time. Enforcement is quick: alerts from the second day after the due date, a freeze on new work permits from the fifth day, and on the eleventh day fines and a downgrade to MOHRE's third category for companies that repeat the violation within six months.

Health insurance. Since 1 January 2025, employers must buy health insurance before applying to issue or renew a private-sector employee's residence. In Dubai, employers must insure their staff in any case. Insuring the employee's family is the employee's responsibility as their sponsor, unless you choose to offer it as a benefit.

Unemployment insurance. Under Federal Decree-Law No. 13 of 2022, employees must subscribe to the Involuntary Loss of Employment scheme: no more than AED 5 a month on a basic salary under AED 16,000, and no more than AED 10 above that (as of October 2026). The obligation, and the AED 400 fines for not subscribing or not paying, sit with the worker, and owners working in their own company are exempt. Check at onboarding that new staff have subscribed anyway.

Worker protection. For each mainland employee you either lodge a bank guarantee of AED 3,000 or buy MOHRE's worker protection insurance, which covers unpaid wages, gratuity and repatriation up to AED 20,000 per worker if a company fails to pay.

What a hire costs beyond salary

Budget for these from the start, with fees as of October 2026:

• MOHRE work permit fees, from AED 250 to AED 3,450 depending on whether MOHRE classifies your company as A, B or C. The classification reflects your compliance record, so late salaries and violations push the fee up.
• Worker protection, from AED 137.50 per skilled worker if you choose the insurance policy rather than the guarantee.
• Immigration costs: the entry permit or change of status, the residence, the medical test and the Emirates ID, which ICP charges at AED 100 per year of residence plus a service fee.
• Health insurance for the employee.
• Gratuity, once the employee completes a year: 21 days of basic pay for each of the first five years and 30 days for each year after that, capped at two years' pay. MOHRE's voluntary Savings Scheme is an alternative, with monthly contributions of 5.83 per cent of basic pay, or 8.33 per cent after five years of service. Our guide to end-of-service gratuity has worked examples.

Emiratisation as you grow

None of this applies to a first hire, but it arrives once you scale.

• 20 to 49 employees in 14 listed sectors, including information and communications, real estate, construction, and professional, scientific and technical activities, had to employ one Emirati by the end of 2024 and a second by the end of 2025. The annual contributions for missing hires were AED 96,000 in January 2025 and AED 108,000 in January 2026.
• 50 or more employees had to raise Emiratis in skilled jobs by 2 per cent a year, reaching 10 per cent by 2026. Missing the target has cost AED 6,000 a month for each Emirati not hired since 2023, rising by AED 1,000 a year to 2026.

Emiratis in the private sector must earn at least AED 6,000 a month from 1 January 2026, and you register them with the pension authority within a month of their work permit. MOHRE penalises fake Emiratisation, such as hiring nationals on paper only.

Common mistakes

• Letting someone start before the permit. A visit visa does not allow work, and the Labour Law prohibits both working and employing without a permit.
• A job your licence does not cover. MOHRE requires the occupation to match your licensed activity, so check before you make the offer.
• Late or partial salaries. WPS enforcement starts within days and blocks your next hire.
• Treating a probation exit like a normal resignation. The notice rules are different during probation.
• Keeping staff documents. Companies may not withhold employees' Emirates ID cards.
• Cancelling without settling. To cancel a work permit, MOHRE needs confirmation that the worker has received all wages and end-of-service benefits, and any fines for late permits must be paid first.

Our PRO services team can handle MOHRE registration, the Work Bundle, permits and residence for your first hires, and our guide to Amer, Tasheel and typing centres explains which office does what. For the visa side, see how a UAE residence visa works. If you want a second opinion on your hiring plan, book a free consultation.

Sources

• UAE Government portal: Recruiting on the mainland
• UAE Government portal: Work permits and their cost
• UAE Government portal: Payment of wages and WPS
• UAE Government portal: Health insurance for private-sector employees
• UAE Government portal: Unemployment insurance scheme
• UAE Government portal: Emiratisation in the private sector