UAE Tax Insights

The UAE has zero personal income tax on employment income. Employee paycheck deductions are limited to ILOE (Involuntary Loss of Employment insurance) and, for UAE nationals, GPSSA (General Pension and Social Security Authority contributions). There is no monthly income tax withholding.

ILOE is a flat monthly premium — AED 5 or AED 10 depending on basic salary. GPSSA is 11% of pensionable salary up to AED 70,000 per month for UAE nationals who joined the scheme from October 2023 onward under Federal Law No. 57 of 2023 (legacy scheme: 5% / AED 50,000 monthly cap).

Rates and thresholds on this hub come from UAE MOF / FTA (no PIT), GPSSA Law 57/2023, and the ILOE scheme — the same engine as our UAE salary calculator. Figures are educational estimates only.

The vast majority of private-sector employees in the UAE are expatriates. Expats pay ILOE only — no income tax, no GPSSA. UAE nationals enrolled in GPSSA also pay 11% of pensionable salary (capped at AED 70,000/month), plus ILOE.

The ladder section below shows both scenarios side-by-side at the same salary levels. The effective rate difference comes entirely from GPSSA — expats keep almost all their gross (minus trivial ILOE), while Emiratis contribute up to 11% for pension.

Home-country tax residency rules may still apply if you are a foreign national — no UAE PIT does not automatically exempt you from tax obligations elsewhere.

ILOE premiums are mandatory for most employees and fund unemployment benefits if you lose your job involuntarily. The monthly premium is AED 5 if your basic salary is AED 16,000 or less, or AED 10 if higher. This is annualized to AED 60 or AED 120 per year in our calculations.

ILOE is not a percentage of salary — it is a flat monthly amount. It does not scale with pay beyond the AED 16,000 threshold.

For high earners, ILOE is effectively zero in percentage terms. Our salary ladders include it for completeness, but it is negligible at AED 240,000+ gross.

Federal Law No. 57 of 2023 introduced a new GPSSA scheme for UAE nationals joining from October 2023. Employee contributions are 11% of pensionable salary, capped at AED 70,000 per month (AED 840,000 per year). Employer contributions are 15%.

The legacy scheme (5% employee / AED 50,000 monthly cap) still applies to some Emiratis who joined before the change. Our calculator and hub default to the current 11% scheme — you can toggle to legacy if needed.

GPSSA contributions are deducted monthly and fund retirement pensions, disability benefits, and death benefits. Expats are not eligible for GPSSA and do not pay it.

Dubai is part of the UAE federal tax system. All seven emirates (Dubai, Abu Dhabi, Sharjah, Ajman, Fujairah, Ras Al Khaimah, Umm Al Quwain) follow the same personal income tax rules: 0% on employment income.

There is no local or emirate-level income tax on salaries. ILOE and GPSSA rules are federal and apply nationwide. If you relocate from Dubai to Abu Dhabi or vice versa, your paycheck deductions stay the same.

Cost of living and housing allowances vary by emirate, but tax math does not. Use Tax Insights for salary deductions, and relocation / COL tools for lifestyle budgeting.

The UAE introduced 5% VAT in 2018 (goods and services) and 9% corporate tax in 2023 (business profits above AED 375,000). Neither reduces employee net salary.

VAT applies to consumer purchases — you pay it when you buy goods or services, not when you receive your paycheck. Corporate tax is levied on companies, not on individuals' employment income.

Your salary calculator and Tax Insights ladder omit VAT and CT because they do not affect gross-to-net calculations for employees.

UAE labor law requires employers to pay end-of-service gratuity when employment ends (except in cases of termination for cause). EOS is calculated as a fraction of basic salary per year of service — typically 21 days for the first five years, 30 days thereafter.

EOS is paid as a lump sum at separation, not deducted monthly. Our salary ladders exclude EOS because it is not a paycheck deduction. Your actual annual compensation includes both monthly net pay and the EOS accrual.

For offer comparisons and budgeting, track EOS separately from monthly take-home — it is a significant benefit, especially for long tenures.