What is the total cost of an employee in the UAE?

The total employer cost goes beyond basic salary. It includes housing allowance (if applicable), transport allowance, end-of-service gratuity provision (21 days per year for the first 5 years, 30 days per year thereafter), medical insurance (mandatory), visa and Emirates ID costs (typically AED 3,000–7,000 per employee depending on zone), WPS processing fees, and any outsourced payroll management fees. As a rule of thumb, total employer cost is typically 15–30% above gross salary.

Is end-of-service gratuity mandatory in the UAE?

Yes. Under UAE Labour Law, employers must pay end-of-service gratuity to employees who complete at least one year of service. The gratuity is calculated as 21 days of basic salary per year for the first 5 years, and 30 days per year for each additional year. The total gratuity cannot exceed 2 years of salary. Employers should provision for this monthly.

How much does payroll outsourcing cost in Dubai?

Payroll outsourcing in Dubai typically costs AED 50–150 per employee per month, depending on the number of employees, complexity (multiple allowances, commissions), WPS processing requirements, and whether the service includes leave management and compliance reporting. Fastlane offers payroll management from AED 75 per employee per month.

What is WPS in the UAE?

The Wage Protection System (WPS) is a mandatory electronic salary transfer system introduced by the UAE Ministry of Human Resources and Emiratisation (MOHRE). All private-sector employers must pay salaries through WPS-approved banks or exchange houses. WPS ensures timely salary payments and allows the government to monitor compliance.

Is medical insurance mandatory for employees in the UAE?

Yes. Medical insurance is mandatory for all employees in Dubai (under DHA regulations) and Abu Dhabi (under HAAD/DOH regulations). Other emirates are increasingly requiring it. Employer-provided medical insurance costs typically range from AED 600–3,000 per employee per year depending on the plan level and employee demographics.

Free Tool · All UAE Emirates · 2026

UAE Payroll Cost Calculator

Find out the real cost of employing someone in the UAE — salary, gratuity, visa, insurance, WPS, and outsourcing fees. Per employee and for your full team.

Step 1 of 5

How many employees?

Total headcount you want to calculate payroll costs for.

Number of Employees

Step 2 of 5

Average monthly salary

Gross monthly salary per employee (basic + allowances). If salaries vary widely, use the average across your team.

Average Gross Monthly Salary

Basic salary + housing allowance + transport allowance + other fixed allowances

Of which: Basic Salary (for gratuity calculation)

Typically 60% of gross. Gratuity is calculated on basic salary only.

Step 3 of 5

Location and visa type

Visa and insurance costs vary by emirate and free zone.

🏙️Dubai Mainland

🏢Dubai Free Zone

🕌Abu Dhabi

🏖️Other Emirates

Step 4 of 5

Insurance and benefits

Select the benefits you provide (or are required to provide).

Medical insurance — mandatory in Dubai & Abu Dhabi

UAE/GCC national pension (GPSSA/ADPF) — employer contributes 12.5%–15% of salary

Payroll outsourcing — want someone else to handle WPS, payslips, leave tracking

Step 5 of 5

Review your inputs

Check the summary below, then calculate.

💰

Payroll Services

From AED 75/emp/month

This calculator provides indicative estimates based on typical UAE employer costs. Actual costs vary based on specific visa category, free zone fees, insurance provider, employee nationality, and contractual arrangements. Gratuity calculations assume unlimited contract terms. Pension contributions apply only to UAE/GCC nationals. Always consult a payroll specialist for accurate budgeting. Fastlane Management Consultancy · TRN: 104218042400003.

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