Correction — 16 October 2026: An earlier version incorrectly recommended unlimited contracts for core staff and suggested repeated fixed-term renewals could create unlimited contracts. Those statements have been removed. We have also corrected the related gratuity wording and clarified the jurisdiction covered.

Which jurisdiction this guide covers

This guide covers employment subject to Federal Decree-Law No. 33 of 2021, as amended, the UAE federal private-sector labour law. It is not a guide to government employment or domestic-worker employment.

For free-zone employers, confirm the applicable rules and permit process with the relevant authority. DIFC and ADGM have independent employment frameworks; do not apply this guide's federal contract, probation or benefits guidance to them. See the UAE Government's free-zone recruitment guidance.

First hire checklist (founder view)

  • Use the appropriate employment contract and confirm the employing entity's jurisdiction.
  • Check the job title against the work permit and licensed activity.
  • Separate basic salary and allowances clearly.
  • Set up the applicable payroll channel before the first payroll date.
  • Ensure leave and working-time policies meet statutory requirements.
  • Have counsel review IP, confidentiality and any non-compete clauses.

Compare payroll platforms in our payroll & HR ranking once headcount grows past founder-only.

Fixed-term contracts and renewals

Under the federal framework, use fixed-term employment contracts, including for core engineering, sales and operations staff. The former unlimited-contract model has been replaced; it is not the default option for new hires.

Renewal does not turn a fixed-term contract into an unlimited contract. Renewal periods count towards continuous service. If the term expires and both parties continue performing their obligations without an express renewal, the contract is treated as renewed on the same terms and conditions. See the UAE Government's contract guidance and Article 8 of the amended federal labour law.

Record the agreed term and renewal arrangements in the appropriate employment contract. Have counsel assess genuine freelance service arrangements separately; a contractor label alone does not resolve employment status.