No income tax — but plenty to calculate
Salaries in the UAE are not subject to personal income tax, so take-home pay is usually your salary minus any pension contribution (for UAE and GCC nationals) and other agreed deductions. The calculations that matter are the ones set by law and by the Federal Tax Authority:
- End-of-service gratuity — 21 days’ basic wage per year for the first five years, 30 days after that, capped at two years’ wage.
- Overtime pay — basic hourly wage plus 25%, or plus 50% between 10 pm and 4 am.
- VAT — add or remove 5%.
- Corporate tax — 0% on the first AED 375,000 of taxable income, 9% above, and Small Business Relief.
Key figures
| Item | Rule |
|---|---|
| Gratuity, years 1–5 | 21 days’ basic wage per year |
| Gratuity, after year 5 | 30 days’ basic wage per year |
| Gratuity cap | Two years’ wage |
| Minimum service for gratuity | One year |
| Daytime overtime | Basic hourly wage + 25% |
| Night overtime (10 pm – 4 am) | Basic hourly wage + 50% |
| VAT | 5% |
| Corporate tax | 0% up to AED 375,000, then 9% |
These rules apply to private-sector employees under the federal labour law. Free zones such as DIFC and ADGM have their own employment laws.