Creating and running a UAE payroll
The sovereign state of UAE has the second-largest economy in the Middle East after Saudi Arabia, making it an economic powerhouse on the world stage. Its economy is largely based on exports of oil and gas, but it has diversified somewhat in recent years to include other industries. This, along with its favorable tax laws, makes it a popular destination for foreign businesses to expand into.
If your organization is considering a UAE expansion, an important early step will probably be creating a UAE payroll and hiring staff locally. This can be a lengthy, difficult, and confusing process for many organizations, often leading to delays of weeks or months and potentially harming profits.
At Horizons, we offer UAE payroll outsourcing services for organizations expanding into UAE. We will set up and run your UAE payroll, helping you to expand more rapidly, whether or not you have an established entity in the UAE.
Why choose the Horizons payroll solution?
If you have an entity
If your organization has already established an entity in UAE, we provide payroll setup and management services to help you stay compliant and kickstart your expansion faster.
This solution is ideally suited for larger businesses aiming to expand in the region on a long-term basis.
If you don’t have an entity
Many organizations do not have an entity and want to remain flexible in their commitment to expansion. For these situations, we can provide the use of our UAE PEO to act as employer of record for your new hires. In addition, we will handle the setup, management, and compliance work for your UAE payroll.
This is a low-risk and flexible way to start your expansion into the UAE market, helping you focus on your expansion operations.
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UAE payroll guide
What are the withholdings and tax requirements in UAE?
UAE taxes are comparatively low in relation to most of the world. There is no income tax on employees, making this element of employment very simple. There is also no general corporate tax, although some companies do need to pay, such as foreign banks and oil and gas companies.
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Social Security
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12.50%
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Total Employment Cost
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12.50% |
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Social Security
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5.00%
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Total Employee Cost
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5.00%
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Entitlements and terminations in the UAE
As always, we strongly advise producing a formal contract of employment when hiring, laying out all the terms of entitlements and terminations in writing to simplify procedures.
Upon termination of an employment contract, employers will usually need to pay severance, and this depends on the length of service. More than one year of employment results in 21-days of pay, and more than five years results in 30 days of pay per year of employment.
How to establish UAE payroll outsourcing
When hiring in the UAE, you will generally need to set up a UAE-based entity to act as employer of record. This can be a long and expensive process, potentially causing delays of weeks or even months to your expansion efforts.
Horizons offers an alternative to this process, handling all of your payroll setup and management, keeping you compliant and speeding up your entry into the UAE marketplace. We can also provide the use of our UAE subsidiary to act as employer of record for your hires, so you can benefit from our solutions even if you don’t have a registered entity in the UAE.
Manage payroll in UAE
Whether it’s EOR service or just payroll management, Horizons’ employment experts can help you get started in 24h.
