A Guide to Mandatory Employee Benefits in UAE
HLB UAE Payroll Team
Phone:- +971 4 327 7775
Mobile:- +971 55 971 5959
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Email:- dubai@hlbhamt.com
The benefits granted to employees in the UAE are as follows:
- Contractual Salary
- Other Benefits mentioned in Employment agreement.
- Statutory Leaves
- Weekly Holidays
- Public Holidays
- End of Service Gratuity
- Health Insurance
- Overtime if applicable
- Repatriation ticket
- Social Contribution for GCC nationals
Contractual Salary
The employees must be paid salary at least once a month. Private sector employers should ensure to pay their staff salaries as specified in employment contract.
Other Benefits mentioned in Employment Agreement
The employees must be paid other benefits specified in employment contract. For example, Transport allowance, commission, one month salary as bonus as specified in contract.
Statutory Leaves
Employees are eligible for statutory leave mentioned in UAE Labour law. Please see below.
Annual Leave
Article 29 of the new UAE Labor law states “The employee must be granted an annual leave for each year of service which may not be less than:
- Two days per month in respect of any employee with more than six months and less than one year of service.
- Thirty days per annum in respect of any employee whose period of service exceeds one year.”
For more details, please read our blog: Annual Leaves in UAE
Maternity Leave
A female employee working in UAE shall be entitled to maternity leave as given below.
- 60 days out of which 45 days at full pay and 15 days at half pay .
- After completion of the 60 days paid leave, a female employee is entitled to take unpaid maternity leave for a maximum period of 45 days. This leave can be continuous or taken in non-consecutive days.
For more details, please read our blog: Maternity Leave in UAE
Parental Leave
A Parental leave for a period of (5) five working days is entitled for the employee (either the father or the mother), who has a newly born child, in order to take care of his/ her child and the employee is entitled to such leave for a continuous or intermittent period, within (6) six months from the date of the child’s birth. Weekends and public holidays are not considered for parental leave.
For more details, please read our blog: Parental Leave in UAE
Sick Leave
As per UAE labour law Sick leave is granted for 90 days per annum (calendar year) at the following rate after the end of the probationary period, the worker may be entitled to a sick leave.
- The first 15 days: with full pay.
- The next 30 days: with half pay.
- Any subsequent period to a maximum of 45 days: without pay.
- The article 31 of the UAE labor law states the following about sick leave:
For more details, please read our blog: Sick Leave in UAE
Bereavement Leave
Compassionate or bereavement leave may be granted to employees to mourn the death of a close relative. In UAE, a private sector employee is eligible to:
- 5 days – death of spouse
- 3 days – death of a parent, child, sibling, grandchild or grandparent
Compassionate or bereavement leave starts from the date in the event of the death of a family member.
For more details, please read our blog: Bereavement Leave in UAEStudy Leave
Employees in the UAE can avail a paid leave of 10 days to appear for examinations, provided they are studying in one of the certified educational institutions in the country. Only employees who were part of the company for at least 2 years can apply for study leave.
For more details, please read our blog: Study Leave in UAESabbatical Leave
The national worker shall be entitled to a sabbatical paid leave to perform the national service, in accordance with the legislation in force in the state.
Weekly Holidays
it is a common practice in UAE that companies are providing two days weekly off to their employees even though it is not mandatory. Standard weekly off days are Saturday and Sunday.
RFor more details, please read our blog: Weekly Off in UAE
Public Holidays
Every Employee is entitled to the national holidays that are announced by the UAE Government. An Employee is entitled to be paid a daily wage for national holidays.
If an employee work in public holiday, entitled with 150% off overtime.
Here is a list of public holidays in UAE
- Gregorian New year: 1 January
- Eid Al Fitr: From 29 Ramadan to 3 Shawwal
- Eid AL Adha from 9 to 12 Dhu al Hijjah
- Islamic New Year
- Prophet Mohammed’s birthday
- National Day
Note: Islamic Holidays are determined according to moon sighting
End of Service Gratuity
Article 51 of the new UAE labor law Federal Decree-Law No. 33 of 2021 states as follows regarding End of Service gratuity:
A full-time foreign worker, who completed a year or more in continuous service, shall be entitled to end of service benefits at the end of his service, calculated according to the basic wage as per the following:
- A wage of (21) twenty-one days for each year of the first five years of service;
- A wage of (30) thirty days for each year exceeding such period.
Employee’s most recent basic salary as the base amount for calculating gratuities.
For more details, please read our blog: Gratuity Policy in UAE
Health Insurance
The health insurance law requires the employer to offer a minimum level of healthcare coverage to their employees without deducting the premium amount from them or reducing their salary to compensate for the premiums.
While organizations are accountable for the health insurance of their employees, this responsibility does not extend towards their employee’s dependents. In cases where family members are not insured by a company, the employee may avail a separate policy for their benefit.
Overtime
When an employee works extra hours than the normal working hours, those extra hours are considered as overtime and the payment made for the extra hours worked is known as overtime payment. As per UAE labor law, overtime is calculated against employee’s basic salary.
There are 2 types of overtime as mentioned below;
- 125% applicable for additional daytime working hours.
- 150% applicable for night hours, weekly off and public holidays. The time between 10 PM and 4 AM will be taken into consideration while calculating night hours’ overtime; workers working based on shifts shall be excluded from this overtime. Also, work performed during the weekly off day or during the official holidays is also compensated with another day off or 150% of overtime.
For more details, please read our blog: Overtime Calculation in UAE
Repatriation ticket
Employe is bears the repatriation expenses of the worker to his place of recruitment or any other place that both parties had agreed upon, unless he/she has already joined the service of another employer or unless the reason for terminating the contract was attributed to the worker, then that the latter shall be liable for incurring those expenses.
Pension/Social Contribution
Pension is provided to eligible Emiratis and other GCC nationals working in the UAE.
GPSSA (General Pension and Social Security Authority) was established in the UAE under Federal Law No. 6 of 1999 to provide pension and social security for the citizens of the UAE. The GPSSA Law applies to all UAE citizens who work in the government or private sectors in Dubai, Sharjah, Ajman, Ras Al Khaimah, Fujairah, and Um Al Quwain. The percentage of contribution to UAE national is
- Employer Contribution = 12.5%
- Employee Contribution = 5%
- Government Contribution = 2.5
For more details, please read our blog: Social Contribution in UAE
Abu Dhabi pensions
In Abu Dhabi, Abu Dhabi Retirement Pensions and Benefits Fund manages pensions on behalf of Abu Dhabi-based and employed UAE nationals. However, it does not manage pensions for GCC nationals and this responsibility lies with GPSSA. The percentage of contribution to UAE national is
- Employer Contribution = 15%
- Employee Contribution = 5%
Pension for GCC nationals
A GCC citizen who works in another GCC country, has the right to enjoy pension in the same ways as he/she would enjoy if working in his/her own home country. He/she is eligible to receive pension as per the respective law of his/her country. The employer’s in the UAE are liable to mandatory subscription for their GCC employees according to the social security law in their home countries in terms of registration and subscription provided that the same may not exceed the subscription share designated for the employers to UAE nationals working for them and the GCC employees assume the contribution variances if any.
Payroll Process
The process of payroll is little complicated and time-consuming; hence it is always recommended to outsource your company’s payroll function. Outsourcing payroll will ensure the assistance of a team of trained payroll professionals and it frees up the time of the organization, helping them focus on other projects that add value to their business.
One should be extra vigilant while selecting their payroll provider, as payroll data is highly sensitive, and one should opt for a provider that can ensure high levels of data security.
As a leading payroll outsourcing company, HLB HAMT can help solve your payroll complexities through customized strategies. We take care of our clients’ entire payroll cycle that includes preparation of payroll reports, processing salary payment with WPS compliance, accrual management including Gratuity, pension funds, an online portal for accessing payslips, and many more. Our leadership team spends the necessary hours in every project, ensuring our clients get refined consulting services to take your business forward.
To know more about our payroll process, click here
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