Hiring your first employee in the UAE: contracts, MOHRE, WPS and end-of-service basics

General information, not legal advice. This guide focuses on mainland private-sector employers regulated by the Ministry of Human Resources and Emiratisation (MOHRE). Free zones, and especially financial free zones, may have their own employment rules and processes. Check with your authority and take advice for your situation.

Your first hire is a milestone, and it brings a new set of obligations. In the UAE, private-sector employment is governed by Federal Decree-Law No. 33 of 2021 on the Regulation of Employment Relationships (the UAE Labour Law) and its regulations, and MOHRE runs the registration, permits and contract processes for mainland employers (u.ae: Recruiting on the mainland; MOHRE).

This guide walks through the steps in order: getting your company ready to employ, permits, contracts, paying salaries, and what happens when employment ends.

Before you hire: is it a hire or a contractor?

Many first "hires" are better as freelancers or contractors for a few months, especially if the work is project-based. If you need someone full-time, working under your direction, as a long-term part of the team, that's employment, and it needs to be set up properly. Don't use informal arrangements to avoid the process: working without the right permit and visa status carries penalties for both the employer and the worker, according to u.ae (u.ae: Employment of expatriates in privately held companies).

Step 1: register your establishment with MOHRE

According to u.ae, the first step for a mainland company is to register the establishment with MOHRE, opening a file and obtaining an establishment card and number linked to your licence. You then apply for the establishment's electronic signature card; MOHRE schedules an inspection of your premises and issues the card once it finds no violations. The e-signature card is a prerequisite for applying for work permits (u.ae: Recruiting on the mainland, source MOHRE, updated 28 Sep 2026).

The number of employees you can hire depends on the quota MOHRE approves, based on your legal status, the size of your premises, your projects and business needs. You can ask to amend it later.

Step 2: the job offer and work permit

For a foreign worker, the process runs roughly like this, per u.ae:

1. A job offer that follows MOHRE's standard format, in Arabic and English (and a third language the worker understands, on request), signed electronically by the employer and approved by the worker (u.ae: Job offers and the employment process). u.ae warns that giving the ministry false information can lead to fines of up to AED 20,000.
2. A work permit application. u.ae lists conditions, including: the worker mustn't hold a valid permit with another company, must be at least 18, and the profession must fit your company's activity.
3. A bank guarantee of AED 3,000 for each registered employee, deposited to MOHRE's account through an approved bank. The employer bears this cost; it may be refunded when the employee's service ends and the labour card is cancelled.
4. Validity. The work permit is valid for 60 days. Approval fees and the guarantee must be paid within that window, or the permit is cancelled automatically.

u.ae also notes that the employer must pay the costs of the entry visa, travel to the UAE, medical tests and the residence permit (u.ae: Employment of expatriates).

Work Bundle. u.ae describes a unified digital platform, the Work Bundle, that brings together work permits, residency, Emirates ID, medical fitness and employment contract procedures in one process (u.ae: Recruiting on the mainland).

Make sure the job title fits your licensed activities. If you're hiring for a role your licence doesn't cover, you may need to add an activity first; see UAE trade licence types.

Step 3: the employment contract

Under the UAE Labour Law, which came into effect on 2 February 2022, employment contracts in the private sector are fixed-term, and can be extended or renewed for a similar or shorter period (u.ae: Employment contracts). u.ae's job-offer guidance adds that the contract must be for a fixed term not exceeding three years, renewable for a similar or shorter term as often as both sides agree, and must be submitted to MOHRE within 14 days of the employee's arrival in the UAE (or of the status change, if they're already here) (u.ae: Job offers and the employment process). Renewals count towards end-of-service calculations, and if a contract expires and both sides simply carry on, it is treated as renewed on the same terms.

u.ae lists several work models the law recognises, including full-time, part-time, temporary, flexible, remote and job sharing. This flexibility helps startups: a part-time or remote contract can be the right first step.

What to get right in the contract:

• Job title and duties consistent with the work permit
• Basic salary and allowances, stated separately. This matters later, because end-of-service gratuity is based on basic salary
• Working hours, leave and probation. u.ae says probation can't exceed six months; an employer ending employment during probation must give 14 days' written notice
• Non-compete terms, if any. The law allows them only as far as needed to protect legitimate business interests, limited by time, place and type of work, for a maximum of two years after the contract ends (u.ae: Employment contracts)
• Notice periods and confidentiality
• Intellectual property: work created for the company belongs to the company. Take legal advice on wording.

Use MOHRE's standard contract as the base, and add a separate agreement for any additional terms where permitted.

Step 4: pay salaries through WPS

All establishments registered with MOHRE must pay wages on the due date through the Wage Protection System (WPS), via banks, exchange houses or financial institutions authorised by the Central Bank of the UAE (u.ae: Payment of salaries/wages).

According to u.ae, under Ministerial Resolution No. 340 of 2026 on WPS:

• Salaries for the previous month are due on the first day of each Gregorian month.
• Employers must transfer at least 85% of the total wages due on time (where lawful deductions apply).
• Late payment triggers escalating measures over the following days, such as suspending new work permits for the establishment.

Payment can be in dirhams, or another currency if agreed in the contract. Set up WPS with your bank before the first payroll date.

Step 5: end of service

For expatriate employees on full-time contracts, u.ae summarises Article 51 of the Labour Law as follows (u.ae: End of service benefits):

• Gratuity applies after at least one year of continuous service, with fractions of a year paid proportionately.
• It's calculated on the basic salary, excluding allowances such as housing and transport.
• 21 days' basic salary per year for the first five years, and 30 days' per year after that.
• Total gratuity can't exceed two years' wages.
• All outstanding wages, entitlements and gratuity must be paid within 14 days of the contract ending.

Part-time and other work models are calculated proportionately. End-of-service benefits for UAE nationals follow the pensions and social security legislation instead.

The Savings Scheme. MOHRE also offers a voluntary alternative: employers contribute monthly to an approved investment fund instead of the traditional gratuity. Contribution rates and rules are on u.ae. If you join, you must settle gratuity already accrued before enrolment.

Budget for end of service from day one, by setting aside a monthly amount even if you don't join the Savings Scheme.

Hiring UAE nationals

If you plan to hire Emiratis, look at MOHRE's Emiratisation requirements and the support programmes run by the Emirati Talent Competitiveness Council (NAFIS). u.ae also describes a national student employment contract for students in NAFIS-supported programmes: full-time, with a salary of at least AED 4,000 a month, and counted towards the company's Emiratisation percentage (u.ae: Employment contracts).

A first-hire checklist

• Hire or contractor? Decided deliberately
• Establishment registered with MOHRE (mainland) or the free zone's process confirmed
• Job title matches licence activities
• Job offer on MOHRE's standard form, signed and registered
• Work permit, AED 3,000 guarantee and fees paid within 60 days
• Contract registered with MOHRE within 14 days of arrival
• Contract with basic salary and allowances stated separately
• WPS set up; payroll date in the calendar (1st of the month)
• End-of-service amount set aside monthly
• Personal data of employees stored securely

Where Startup Roof fits

Hiring well is one of the biggest steps a founder takes. Startup Roof is a UAE-first founder ecosystem with source-checked guides, founder tools and templates, and a network of founders who've made their first hires here. Explore startuproof.com to see what's there.

Build. Scale. Grow.

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Sources (checked 16 Oct 2026)

• u.ae: Recruiting on the mainland
• u.ae: Employment contracts: duration and models in the private sector
• u.ae: Payment of salaries/wages (WPS)
• u.ae: End of service benefits for workers in the private sector (page dated 15 Oct 2026)
• u.ae: Job offers and the employment process (updated 24 Sep 2026)
• u.ae: Employment of expatriates in privately held companies
• MOHRE