There are specific rules for payroll and taxation in the UAE, depending upon whether your company employs foreign nationals or locals. Generally speaking UAE has very little in the way of corporate tax concerns as there is no individual income tax for employees, no social security for expats, no payroll tax, no statutory pension contributions for expats and no withholding tax.
A remote payroll in UAE is where a foreign company, i.e. a non-resident company, payrolls a resident employee in UAE. One option for a non-resident company is to payroll its employees (local and foreign) in UAE is to use a fully outsourced service like a GEO, which will employ and payroll the staff on their behalf.
In some cases, a company will register their business in UAE under one of the forms available, (Representative Office, Branch Office or Limited Liability Company) but prefer to have another company administer its payroll. This can be accomplished through a payroll provider. It is important to note that the company, as the Employer of Record, is still fully responsible for compliance with employment, immigration, tax and payroll regulations. However, the payroll calculations, payments and filings can all be outsourced to the payroll provider.
Larger companies with a commitment to UAE may wish to run their own local payroll for all employees, foreign and local. In order to accomplish this, they will have to complete incorporation, register the business and then hire the necessary staff. There will be a need for in country human resources personnel who have the background needed to manage a UAE payroll, and can fulfill all tax, withholding, and payroll requirements.
This approach carries significant cost and requires some knowledge of local employment and payroll regulations. The company will need a local accounting firm and potentially legal counsel to ensure full compliance with UAE employment laws.
Companies can outsource the employment and payroll of their staff in UAE to a GEO, like Shield GEO. This is possible for both foreign workers and UAE nationals. This is the easiest, fastest and safest way to payroll staff in UAE.
Shield GEO manages all aspects of payroll for workers in UAE, including taxes, withholding, social security payments and other statutory requirements. Shield GEO becomes the Employer of Record and employs the staff on behalf of the client.
Staff are paid monthly with tax and social security deducted at source and paid to local authorities. Shield GEO will invoice the client monthly in advance of the payroll date. The invoice consists of the Total Cost of Employment (Base salary + Employers Statutory Contributions + Additional statutory contributions) and a Management Fee. Shield GEO provides the employees with payslips.
Read more about outsourced payroll and employment through Shield GEO.
Emirate Dirham (AED)
|Corporate Income Tax ?||
There is no corporate income tax in UAE except for certain industries (branches of foriegn banks and companies engaged in Oil and Gas)
|Income Tax Rate ?||
|Payroll Tax ?||
|Sales Tax ?||
|Withholding Tax ?||
|Employee Social Security (EE SS)||
0% for foreigners
5% pension contributions for local staff
|Employer Social Security (ER SS)||
0% for foreigners
12.5% pension contributions for local staff