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Home > Salary NegotiationExplained: Salary Packages in Dubai (basic salary, income tax and other benefits)

Explained: Salary Packages in Dubai (basic salary, income tax and other benefits)

Working in Dubai has the lure of a lavish lifestyle, the most scintillating shopping experiences, skyscrapers, and of course, a much better salary package. In fact, pay in Dubai is income tax-free and often considered better even than the UK now!

If you’re looking to make a successful career in Dubai, here’s what you can expect on the pay front.

How much will you be paid?
Just like anywhere else, salary break up includes basic and benefits such as insurance, housing, transport, etc. Since there’s no income tax, you actually get to take home the entire sum tax-free, guilt free!

But salaries differ drastically in Dubai, based on your educational qualification, and your ability to negotiate. Unlike various developed nations, the UAE and therefore Dubai is not covered by a minimum wage structure. The grave reality, however, is also the fact that you’ll not only be paid according to your qualifications but also where you hail from, your employment history, your experience, etc.

Polish your negotiation skills because you’ll really need them here. Otherwise, you’ll end up with pay lower than someone at a rank or two lower positions or even same.

Since the UAE Labour Law does provide for minimum wages, your basic salary is the basis for calculating your gratuity payout and therefore of utmost importance.

While the Labour Ministry approved a few rules for minimum salaries for certain categories, these differ from minimum wage, as they apply only to full-time workers in Dubai who meet certain specific criteria. Since labour union are illegal, there’s no way you can join forces with other workers to demand better pay in the UAE. But as per the rules:

– If you’ve graduated from a University, you’re entitled to a minimum monthly salary of Dh.12,000
– If you’re a skilled technician, you will be offered a minimum monthly salary of Dh.7000
– If you belong to the category of a skilled labourer, you will receive at least Dh.5000 monthly, if you have a Class 10 or secondary school certificate.

How will you grow?
Only 5% of employees in the UAE receive family benefits like Children’s education and even fewer, just a percent get childcare facility. But in recent times, at least the public sector has made significant progress on the child leave the front. Maternity leave for women working in the government spans a full two months’ pay and then reduced work hours the next four. In the private sector too, new mothers can claim up to 45 days’ maternity leave at full pay if they’ve served a full year at the company. Once they resume work, they are also granted two hours each day for nursing. Men also receive three days of paternity leave within the first month of delivery.

Other benefits
A basic Dubai pay package comprises various line items mandated by law. Your employer will have to make sure you have a return flight to your homeland at the end of your employment. You should also have received an outline of your basic salary and discussed gratuity before agreeing to work for the company. In your first year, you’re allowed to take 21 days as annual leave and 30 days after the first year. You’ll be given medical insurance at the end of your probationary period.

Here’s a full list of all the benefits you stand to receive on your pay package:
– A base pay or basic salary
– Paid annual holiday
– Medical insurance
– Employment, visa-processing fee and related expenses
– Gratuity
– Return flight to your home country when your contract ends

You can also negotiate for food, housing, transport, furnishings at home, a vehicle and a cellular phone. In addition, if you need assistance with relocation in financial terms or other help, you may request it.

Gratuity
This end-of-service payment is similar to severance pay in various other countries. If you complete the entire duration of the contract, then you’re entitled to gratuity. Since there’s no provision for pension in UAE Labour law, gratuity sort of replaces the same. A good reason to not be sacked for valid reasons, or you can kiss goodbye to your gratuity of maximum to 24 months’ salary. Paid at the end of your contract, it would depend on whether you’re on a fixed term (limited) or unlimited contract, and the circumstances under which your contract has been terminated.


Read more about Labour Laws in UAE here: UAE Labour Law: All You Wanted to Know About Leaves, Wages, and Shifts


 

Income Tax
At the beginning of this article, we mentioned that the UAE does not levy an income tax. Sure, your net income will be much higher, but depending on where you hail from and how long you’re staying, you may have to pay tax in your home country. Best to consult with your IT department, a local account or a law practitioner to get a thorough understanding.

Indemnity
If you’re going to Dubai as a contract employee, you’re also entitled to indemnity – calculated on your base pay and separate from salary, and bonuses. If you work in Dubai for a considerably long time, this may grow to be a hefty amount. This is not insurance, but in fact, a sort of gratitude pay from the state, categorised under end-of-service benefits. Indemnity is basically 21 days of basic pay per annum for the first 5 years, and then 30 days salary per year of your employment.

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