What an Employer of Record Costs in the UAE

Ask three employer of record providers what they charge in the UAE and you will get three numbers that cannot be compared, because they are measuring different things. One quotes a platform fee. One quotes a fee with government charges folded in. One quotes an all-in figure that includes the salary you were going to pay anyway.

This guide separates the parts so you can compare like with like, and so you know which questions expose a quote that is hiding something.

The three parts of an EOR cost

Every honest EOR quote resolves into three components.

1. The employee's salary. This is not a cost of using an EOR. You would pay it whoever employed them. It passes through untouched. If a provider presents an "all-in" number that quietly includes the salary, the comparison against another provider's platform fee is meaningless.

2. Government charges. Work permit, residence visa, medical, Emirates ID, labour card. These are set by the government, not the provider. They vary by role, visa type and emirate, and they change. They should arrive at cost, with receipts.

3. The provider's fee. The actual price of the service: employing the person, running payroll through WPS, sponsoring the visa, handling filings, carrying the compliance obligation. This is the only part where providers genuinely differ, and it is the only part you should be comparing.

Anyone unwilling to show you those three separately is asking you to trust a number you cannot check.

What the fee should cover

A monthly per-employee fee should include the whole employer function, not a subset with add-ons appearing later:

• A MOHRE-registered employment contract
• Residence visa sponsorship, including renewals
• Payroll run and paid through the Wages Protection System
• Statutory benefits and medical insurance enrolment
• End-of-service gratuity accrued correctly as it is earned (estimate it with our gratuity calculator)
• Onboarding and offboarding, including visa cancellation
• Somewhere to ask a question and get an answer

Watch for gratuity in particular. It accrues from day one under UAE labour law. A provider that does not accrue it monthly is leaving you with a bill at the end that you thought was covered.

Our own figure is published on the pricing page rather than kept behind a call, and government charges are passed through at cost.

Comparing EOR against your own entity

This is the comparison most companies actually want, and it is usually done badly, because the entity side is easy to underestimate.

Setting up and running a UAE entity involves, at minimum:

• Trade licence, and its annual renewal
• Registered premises, since a licence needs an address
• Corporate bank account, which takes longer than people expect
• Establishment card and immigration file
• PRO services for government transactions
• Accounting, audit and filings
• Someone's time managing all of the above

None of that scales with headcount. It is broadly the same whether you employ one person or fifteen, which is exactly why the arithmetic flips as you grow.

At one to five employees, an EOR is almost always cheaper, because the fixed cost of an entity is spread across too few people.

Somewhere in the middle, they converge. Where depends on salaries, roles and how much management time you are willing to spend.

At scale and with a long horizon, your own entity wins on cost per head, and gives you control an EOR cannot offer.

The mistake is comparing an EOR fee against a licence fee and stopping there. The licence is the cheapest part of having an entity.

Costs people forget

Visa renewal cycles. A residence visa is not a one-off. It renews, and each renewal carries government charges. A quote covering only onboarding is telling you about year one.

Offboarding. Visa cancellation, final settlement and gratuity are real work with real cost. Ask whether they are in the fee or billed separately.

Salary changes and role changes. Amending a MOHRE contract is a transaction. Some providers absorb it, some charge.

Medical insurance. Mandatory. Confirm whether the fee includes enrolment, the premium, or only the administration.

Dependants. If your hire is bringing a family, sponsorship of dependants is a separate matter with separate charges. It is often not included, which is fine, as long as you know before you promise the candidate something.

How to read a quote

Four questions get you a comparable number:

1. What is your fee, excluding the salary and government charges? One number, per employee, per month.
2. Which government charges apply to this role, and are they at cost? Ask for the list, not a total.
3. What is not included? The useful question. Renewals, offboarding, contract amendments, dependants.
4. What happens in year two? Onboarding costs are one-off. Renewals are not.

If the answers arrive as one blended figure, ask again. A provider that cannot separate its own margin from a government fee either does not know or would rather you did not.

Where the real money is

Cost is not only the invoice. A visa cycle run badly means a hire who cannot start. A payroll that misses WPS creates an exposure worth more than the fee you saved. A provider without the right licence puts the whole arrangement in question.

The UAE government's guidance on working in the private sector sets out the obligations, and MOHRE's laws and regulations is the primary reference. Visa and residency requirements sit with ICP, and the government's visa and Emirates ID guidance is the readable version.

The cheapest quote from a provider who cannot show you a licence is not cheap.

In short

An EOR cost has three parts: the salary, government charges, and the provider's fee. Only the third is a real basis for comparison. Insist on it separately, ask what is excluded, and ask what year two looks like.

For a specific number, tell us the role and the salary and you will get the all-in monthly cost back itemised, in dirhams. The Employer of Record service covers how the process runs, and what an EOR does in the UAE covers the arrangement itself.