HowtoHireYourFirstEmployeeinDubai(2026):Visa,Contract,GratuityandCosts

To hire your first employee in Dubai, your company needs an establishment card and visa allocation, a signed employment offer, an entry permit and work permit, a medical test, Emirates ID biometrics, health insurance and a registered employment contract. After that, salaries are paid through the Wage Protection System (WPS) where it applies, and end-of-service gratuity builds up from day one. For most small companies the whole process takes around two to four weeks once the company licence is in place. Government and processing costs for one employee visa are commonly quoted at about AED 3,000 to AED 7,500, depending on the free zone or mainland authority and the employee's circumstances.

This guide walks through each step, the contract rules under UAE labour law, the costs to budget for, and the mistakes first-time employers make. It is based on Federal Decree-Law No. 33 of 2021 on employment relations, its later amendments and published authority guidance, checked as of October 2026. Free zones such as DIFC and ADGM have their own employment laws, so check which rules apply to your licence.

Before You Hire Your First Employee: What Your Company Needs

• A valid trade licence with an activity that matches the role you are hiring for.
• An establishment card (sometimes called an immigration card), which registers the company with the immigration authority.
• Visa allocation. In most free zones the number of visas depends on your package or office space. On the mainland it depends on your premises and MOHRE registration. Our guide on whether you need a physical office explains how space and visas connect.
• A company bank account, so you can pay salaries through the proper channels.
• A health insurance provider, because cover is mandatory for employees.

Step-by-Step: The Employment Visa Process

1. Make a written offer. On the mainland, MOHRE uses a standard offer letter that the employee signs. Free zones have their own forms.
2. Apply for the work permit and entry permit. If the employee is outside the UAE, the entry permit lets them enter to complete the process. If they are already in the UAE, a change of status is usually possible.
3. Medical fitness test. The employee completes a medical test at an approved centre.
4. Emirates ID biometrics. Fingerprints and a photo are taken for the Emirates ID.
5. Health insurance. A policy must be in place before the residence visa is issued.
6. Residence visa issued. Visas are now issued digitally and linked to the Emirates ID.
7. Sign and register the employment contract. On the mainland, the contract is registered with MOHRE and must match the offer letter.

A PRO service can handle these steps for you. See how our PRO services work, or read about getting a residency visa through your own company if you also need a visa for yourself.

Employment Contract Rules Every Employer Should Know

End-of-Service Gratuity Explained

Employees on the mainland who complete at least one year of continuous service are entitled to end-of-service gratuity when they leave. It is calculated on the basic salary, not the total package:

• 21 days of basic salary for each of the first five years of service.
• 30 days of basic salary for each additional year after five years.
• The total is capped at two years' wages.

Because gratuity is tied to basic salary, the split between basic pay and allowances affects your long-term cost, so set it deliberately and keep it reasonable. In DIFC, gratuity has been replaced by monthly contributions to an employee savings scheme, and some other free zones have their own approaches.

Example: an employee with a basic salary of AED 8,000 a month who leaves after three years would receive 3 x 21 days of basic pay. At a daily basic rate of about AED 263, that is about AED 16,570. A sensible habit is to set aside a monthly provision so the payment never comes as a surprise.

What It Costs to Hire Your First Employee in Dubai

There is no general minimum wage for expatriate employees, although a salary must be realistic for the role, and certain salary levels affect whether employees can sponsor family. Our first-year company cost breakdown shows how staffing fits into the wider budget.

Ongoing Employer Obligations After the First Hire

• Pay on time through WPS where it applies. Late salary payments can lead to penalties and a block on new permits.
• Keep health insurance active for the full employment period.
• Remind employees about unemployment insurance. Joining the Involuntary Loss of Employment (ILOE) scheme is the employee's obligation, but many employers help make sure it is done.
• Keep payroll records for corporate tax and audit purposes. Our guide to accounting and bookkeeping costs covers payroll services.
• Watch Emiratisation thresholds once your mainland company reaches 20 employees. See our guide to Emiratisation rules.
• Cancel visas properly when someone leaves, and settle final pay and gratuity within the legal timeframe.

Alternatives to a Full Employment Visa

A full employment visa is not always the first step. Depending on the role and your budget, you could:

• Hire someone who already has a residence visa, for example through a spouse or family sponsor, using a work permit only.
• Use part-time or temporary contracts, which the labour law now recognises.
• Engage freelancers or contractors who hold their own licence, for project-based work.
• Use an employer of record, which employs the person on your behalf for a monthly fee, useful while your own visa allocation is limited.

Common Mistakes First-Time Employers Make

• Letting someone start work before their permit is issued, which can lead to fines.
• Agreeing a salary in the offer letter that differs from the registered contract.
• Setting basic salary very low to cut gratuity, which can cause disputes and affect the employee's family sponsorship.
• Forgetting that probation notice rules apply to employers too.
• Not tracking visa and Emirates ID expiry dates.

Key Takeaways

• You need a licence, establishment card, visa allocation, bank account and health insurance before hiring.
• The visa process usually takes two to four weeks once the company is set up.
• Contracts are fixed-term, probation is up to six months and notice periods are 30 to 90 days.
• Gratuity is 21 days of basic salary per year for the first five years, capped at two years' pay.
• DIFC and ADGM have their own employment laws, so check which rules apply to you.

Let Us Handle Your First Hire

SMS Consulting, operating under ISO 9001:2015-certified processes across offices in Dubai, London, Delhi and Dhaka, handles employment visas, contracts and MOHRE or free zone registrations for growing companies. See our PRO services or talk to us.