Financial Templates for the UAE

The United Arab Emirates levies no personal income tax on salaries, and that remains the position for the 2026 tax year: no PAYE withholding, no capital gains tax, and no wealth or inheritance tax on individuals. Value Added Tax has applied at 5% on most goods and services since January 2018. Corporate tax of 9% applies to business profits above AED 375,000 for financial years beginning on or after 1 June 2023, and a 15% domestic minimum top-up tax has applied to very large multinational groups for financial years starting on or after 1 January 2025. Neither reaches employment income, so for most employees gross pay and net pay are effectively the same figure.

UAE nationals are covered by the GPSSA pension system, funded by employee, employer and government contributions. Expatriate employees are not. Their statutory entitlement is end-of-service gratuity, a lump sum calculated from length of service and final basic salary. Since 2023 employers have been able to opt into a supervised alternative end-of-service savings scheme, under which monthly contributions are paid into an invested fund rather than accruing as a book liability, and employers inside the DIFC have run the DEWS scheme on the same principle since 2020. Outside those arrangements, expatriate retirement saving in the UAE is entirely self-directed.

Housing is typically the largest line in a UAE budget, particularly in Dubai and Abu Dhabi. Rent is often paid in one to four post-dated cheques a year rather than monthly, which puts cash flow on a different rhythm to a monthly rental cycle, although monthly instalment options have spread. In Dubai a housing fee of 5% of annual rental value is collected through the monthly DEWA bill, and Abu Dhabi applies a comparable municipality fee to expatriate tenants through ADDC. Employer-provided health insurance has been mandatory in Abu Dhabi and Dubai for years, and since 1 January 2025 it has also been required for private sector employees and domestic workers in the Northern Emirates.

The UAE dirham is pegged to the US dollar, so the Central Bank of the UAE generally moves its policy rate in step with the US Federal Reserve. That gives currency stability against the dollar while local deposit and mortgage rates follow US decisions rather than local conditions. The lifestyle range is wide, running from relatively modest to ultra-premium, and budgeting in the UAE often comes down to which tier of spending a household is targeting across housing, dining and leisure.

One payroll deduction does apply to nearly everyone. The federal unemployment insurance scheme has been compulsory since 1 January 2023 for most private sector and federal government employees, at AED 5 a month where basic salary is AED 16,000 or below and AED 10 a month above that. A successful claim pays 60% of the average basic salary of the six months before job loss, for up to three months per claim and subject to a monetary cap. The premium is small enough to be easy to forget, and the cover is limited enough that it sits alongside rather than in place of a cash buffer, which is where tracking savings next to income can help.