The UAE is one of the most popular locations for professionals that are looking for a job. However, one of the most common questions among job seekers is about the minimum wage in UAE. Similarly, foreign employers also want to know how to deal with Dubai minimum wage since they want to comply with the law.
In this article, you are going to learn more about the minimum wage in UAE. Moreover, you can gain more insight into the living cost in Dubai minimum salary. Let’s observe:
- What is the minimum wage in UAE?
- Does the UAE have a mandatory minimum wage?
- What are the average salaries of different job roles in the UAE?
- What does the UAE Labour Law state about a minimum wage?
- How can you pay employees in the UAE?
- What is the living cost in Dubai?
- How can Connect Resources help you with wages and payroll?
1. What is the minimum wage in UAE?
When it comes to employment, workers want to get paid a fair amount of money given their experience and knowledge. Some job roles may have higher salaries, while other positions that do not require expertise may have lower salaries.
Regardless, every employee should receive payment on time and according to his or her qualifications. Many countries have established a minimum wage or salary, which is the lowest contractual amount an employee can be legally paid for his or her work.
This means that if an employer offers less than the minimum wage to an employee, then the employer is not complying with the law.
It is important to point out that there is no minimum wage in UAE. And, it is also worth noting that the UAE minimum salary differs from the basic salary since they are not the same.
1.1 What is the basic salary?
The basic salary in UAE is the amount the employee gets paid and that is specified on the contract.
The basic salary is exclusive of allowances, benefits, expenses and any other. Thus, it is the amount the employer pays to the employee for carrying out their contractual obligations.
According to the new UAE Labour Law, the basic salary should be stipulated in the employment contract. Since it does not include other benefits-in-kind and allowances, it is also known as basic compensation.
However, workers in the UAE receive allowances in addition to their salary. Some of them are phone, housing, communication, transport allowance, and more.
Thus, the basic salary plus the allowances are the gross salaries. And, allowances should also be stated in the contract. Lastly, we have the net salary, which is the gross salary minus deductions.
To sum up, there is not a min salary in Dubai, but there are three types of salaries:
- Basic salary: basic compensation stated in the contract.
- Gross salary: basic compensation + allowances.
- Net salary: gross salary – deductions.
2. Does the UAE have a mandatory minimum wage?
This is one of the most common questions among individuals that are looking for a job in the UAE. Likewise, foreign employers also want to know if there is a minimum wage in UAE so they can comply with the law.
However, there is no minimum wage UAE. This means that there is no mandatory minimum amount that an employer should pay an employee.
Since there are no minimum wages in UAE, employers and employees have to negotiate pay rates.
Many individuals believe that there is a minimum salary in Dubai, but the truth is that the UAE Labour Law does not state anything about it. Moreover, the law does not state anything about a UAE basic salary percentage.
Although at first, it may seem like a disadvantage, the UAE takes very seriously the conditions of the people working in the country. Thus, the law states that the salary must be sufficient for the employees to cover their basic needs.
According to Article 27 of UAE Labour Law, the Cabinet may issue a resolution at any time regarding the minimum wage for workers of any category. This means that there is a likelihood that in the future, the UAE issues minimum wage legislation. But, it is not still a reality.
3. What are the average salaries of different job roles in the UAE?
Even though there is no minimum wage in UAE, there is an average salary depending on the job role the person is going to take. For example, a domestic worker may earn between AED 1,100-1,800.
This is helpful since the person may have an idea of how much he or she is going to earn. Moreover, it helps them to negotiate to enter into a better agreement.
Therefore, although a particular profession may not have a Dubai minimum salary, the individual still can decide to not accept less than the following amount depending on his or her classification:
- University graduates should not earn less than AED 12,000 monthly.
- Skilled labourers should not earn less than AED 5,000 monthly.
- Skilled technicians should not earn less than AED 7,000 monthly.
Knowing this helps you have an idea of how much you have to offer to your employees. In addition, it helps you negotiate so you can offer great compensation that meets their basic needs.
3.1 Average salaries in the UAE per profession
The UAE is a country that welcomes professionals from around the world. From domestic helpers up to C-suite level executives, the job market is pretty diverse. Therefore average salaries differ greatly. However, here we have some examples:
- Baby sitters: AED 1,100.
- Waiters: AED 1,200.
- Secretary: AED 4,000.
- Nurse: AED 6,000.
- Sales executive: AED 8,000.
- Software engineer: AED 11,000.
- HR Manager: AED 18,000.
- General manager: AED 35,000.
As you can see, unskilled workers have a low salary, while managers tend to earn more money.
When it comes to the lowest salary in Dubai, definitely domestic workers are the ones that earn the least.
3.2 Average salaries in the UAE per location
When an individual is considering the UAE as a destination for working and living, it is important to determine which location is the best for him or her.
Dubai has a thriving economy of all seven Emirates, and that is why the average salary tends to be higher. So, if you are a graphic designer working in Fujairah, you will gain 10% more if you move to Dubai.
In this regard, here we have the average salaries per location in the UAE:
- Dubai: AED 21,500.
- Abu Dhabi: AED 21,000.
- Ajman: AED 19,300.
- Fujairah: AED 18,100.
4. What does the UAE Labour Law state about a minimum wage?
The UAE Labour Law is the main source of employment legislation. For this reason, employers have to check if it has any modifications to the salary or the minimum wage in UAE.
The main article that mentions the UAE minimum wage is Article 27, which it states that there is a possibility to issue legislation about the minimum wage in Dubai.
Moreover, even if it does not mention anything about the minimum salary in UAE, it mentions some guidelines about the basic salary and deductions.
When it comes to the minimum wage in UAE, employers have to keep up-to-date in case there is a modification issued.
5. How can you pay employees in the UAE?
Learning about how to offer compliant contracts, salaries, and benefits can be overwhelming for a foreign business owner. And even when you still understand all the aspects of it, you still need to process your payroll, which is a tedious process.
There are several regulations you need to follow concerning the labour salary in Dubai. Here we have a detailed list:
- Paying wages on the due date: you have to pay your employers on time since payment delays will represent a fine and that would be detrimental to your business.
- WPS System: employers should pay their employees using the Wages Protection System, otherwise, they may incur in penalties and fines.
5.1 What is the Wages Protection System?
The Wages Protection System (WPS) is an electronic system employers use to pay their employees. It is mandatory to use the WPS as a means to pay employees.
The WPS allows the company to pay their workforce by using banks or financial institutions. The purpose of this system is to protect employees and secure their wages.
As an employer, if you are planning to run your payroll, you need to know how to use this system. The advantage of the WPS is that ensures satisfaction for both the employee and employer. Thus, it increases employee satisfaction and decreases the likelihood of errors.
To use the WPS, you need to submit a Salary Information File to a WPS agent, and after that, you can proceed.
5.2 What happens if the employer does not pay on time?
If as an employer, you do not pay on time, your payments will be considered unpaid or delayed. Therefore, depending on the frequency of payment stated in the contract, the employee should receive his or her payment, as that it the law states. It could be weekly, bi-weekly, monthly, or any other.
In this case, the employee may file a complaint, and this will not be good for your company. If you have been struggling with payments and the WPS, perhaps you should consider Payroll outsourcing since it can be the perfect solution to your issues.
6. What is the living cost in Dubai?
The UAE is not known precisely for being a cheap country. On the contrary, it is seen as a luxurious location where people need to earn a lot of money to survive. For this reason, many people search for the Dubai minimum salary to live since they desire to move to this city.
In this regard, you have to look for the Dubai labour salary per month 2022 and check if it is convenient for you or not.
However, it is always helpful to see the cost of living in Dubai, so you can determine if it is worth the try or not.
Keep in mind that Dubai is one of the most luxurious cities in the world, thus the prices may be high:
- Rent: if you are going to move to Dubai just yourself, you have to pay for accommodation too. The average cost of rent in Dubai is AED 2,500-6.000, and sometimes it can even be more depending on the location you have chosen.
- Utilities: it is important to consider utilities in your budget for renting in Dubai. Electricity bill is AED 500-750, while a mobile data plan can cost AED 200-250. About the internet, it can cost AED 400-600.
- Groceries: groceries are not so expensive in Dubai. A single person may spend AED 1,000 on groceries for a month.
- Miscellaneous: gym membership is AED 200-250 while a meal in a restaurant can be AED 50-75.
7. How can Connect Resources help you with wages and payroll?
Managing the payments to your employees is not an easy task. For this reason, you need to have experts by your side supporting your operations. Here on Connect Resources, we can help you with your Dubai labour salary thanks to our Payroll Service.
- Employer of Record Services.
- Recruitment agency in Dubai.
- Employment Visa Outsourcing.
- Executive Search.
Do you need assistance with minimum wage in UAE? We have a team of representatives waiting for your call. Contact us at +971 43 316 688 or write at email@example.com. Our goal is to help you overcome the challenges of being a business owner in the UAE.
Alternatively, if you are planning your move to the UAE, and you want to find your dream job, you have to check The Talent Point. Visit thetalentpoint.com so you can start applying for the best vacancies in the Middle East. For faster results, send your CV to firstname.lastname@example.org.