Basic Salary in the UAE: What Counts, the Percentage Question, and Which Entitlements Use It

Direct answer. In the UAE private sector, basic salary is the wage written in your employment contract for your work, before any allowances or benefits in kind. The law sets no required ratio between basic salary and the total package. Overtime, holiday premiums, end-of-service gratuity and the unemployment insurance benefit are all calculated on basic salary alone.

Article 1 of Federal Decree-Law No. 33 of 2021, the Labour Law, defines basic salary that way and separates it from "wage", which adds housing, transport and other cash allowances. The split between the two is a matter of contract, and it decides several entitlements: overtime, the premium for working a rest day or public holiday, end-of-service gratuity, the cash-out of unused leave when service ends, death compensation for a work injury, the unemployment insurance benefit and Savings Scheme contributions. Your monthly pay, leave you take and the deduction limits use the full wage. Your MOHRE-registered contract states the agreed wage including allowances, so check it for your basic figure.

What "basic salary" means under UAE law

Article 1 of the Labour Law defines two terms that people often use as if they were one.

• Basic wage is "the wage stipulated in the employment contract, which is paid to the worker in consideration of his work", on a monthly, weekly, daily, hourly or piecework basis, "and which does not include any other allowances or benefits in-kind".
• Wage is the basic wage plus the cash allowances and benefits in kind given to the worker under the contract or the Decree-Law. It can also include allowances granted to meet the cost of living, a percentage of sales or a percentage of profits.

In everyday speech, "gross salary" usually means the legal "wage". "Basic salary" is only the first layer.

Read the full definitions in Federal Decree-Law No. 33 of 2021, or the short version in our dictionary entry for basic salary.

Who these rules cover

The Labour Law governs private-sector employment. Article 3 leaves out federal and local government employees, the armed forces, police and security bodies, and domestic workers. Under Article 51(1), a national worker's end-of-service entitlement follows the pensions and social security legislation, so the gratuity formula below applies to foreign workers.

The DIFC and ADGM financial free zones run their own employment laws. The DIFC rules are covered below. If you work in ADGM, check its employment regulations.

What percentage of total salary should basic salary be? The law sets no ratio

For onshore private-sector employment, the law sets no required percentage.

The UAE Government's payment of wages page: "There is no minimum salary stipulated in the UAE Labour Law." Article 27 lets the Cabinet set a minimum wage for workers or any category of them by resolution, but no resolution sets a basic-to-total ratio. A percentage quoted as a legal requirement is market practice, not law.

One exception concerns Emiratis. MOHRE announced a minimum wage of AED 6,000 per month for Emiratis employed in the private sector, effective 1 January 2026. Existing Emirati staff had to be adjusted by 30 June 2026. From 1 July 2026, Emiratis not yet adjusted do not count toward Emiratisation targets and new work permits are suspended for the employer. The MOHRE announcement does not say whether the figure means basic or total wage. Confirm that point with MOHRE.

The DIFC works differently. For service from 1 February 2020, a DIFC employer pays monthly contributions for most employees into DEWS or another qualifying scheme instead of building up a gratuity: at least 5.83% of the monthly basic wage for the first five years and 8.33% after that (Article 66(7), DIFC Law No. 2 of 2019 as amended, Consolidated Version No. 5, July 2025). Earlier service still earns the old 21/30-day gratuity for an employee with at least one year's continuous service who is not registered with the GPSSA (Article 66(1)-(2)). The exception is where the employer moved that amount into a qualifying scheme with the employee's prior written consent (Article 66(6)). Both carry a 50% floor: basic may not be treated as less than half the monthly wage for contributions (Article 66(8)(b)), or half the annual wage for the pre-2020 gratuity (Article 66(3)(a)). The DIFC Small Claims Tribunal applied the gratuity floor in Mirtu v Mouni [2023] DIFC SCT 139, raising the basic before calculating the entitlement.

Onshore, no provision sets a ratio, so the split is left to the contract (subject to the Emirati minimum wage above). A low basic still lowers every entitlement below. Our guide to the MOHRE offer letter shows where the split appears.

Which entitlements are calculated on basic salary

Overtime, rest days and public holidays

Article 19 limits overtime to two hours a day, except under conditions set by the Executive Regulation, and total working hours may never exceed 144 every three weeks. Overtime pay is the normal-hours wage "calculated according to the basic wage", plus the premium in the table.

For rest-day and holiday work, the day's wage is the full normal-day wage. Only the extra 50% premium is measured on the basic wage for that day. See our guide to working hours and overtime and the dictionary entry for overtime pay.

End-of-service gratuity

A foreign full-time worker who completes at least one year of continuous service earns gratuity under Article 51. It is 21 days' basic wage for each of the first five years and 30 days' for each year after that. Part-years count pro rata once the first year is complete. Days of unpaid absence are left out of the service period. The total is capped at two years' wage.

It uses the last basic wage received, for workers paid monthly, weekly or daily. For piece-rate workers, the average daily wage is used instead (Art. 51(5)). The UAE Government portal's end-of-service benefits page is explicit: gratuity "will not include allowances such as housing, transportation, utilities, furniture etc."

The Decree-Law does not print a day-rate formula for turning "21 days' basic wage" into dirhams, so confirm the method with MOHRE or a licensed UAE lawyer. For worked calculations, see our end-of-service gratuity calculation guide and the explainer on the UAE gratuity law.

Death compensation for a work injury

If a work injury or occupational illness leads to the worker's death, Article 37(3) gives the family compensation equal to the worker's basic wage for 24 months. It is calculated on the basic wage before death, with a minimum of AED 18,000 and a maximum of AED 200,000. Permanent-disability compensation is set by a Cabinet resolution, so do not assume the same formula.

Unemployment insurance and the Savings Scheme

Under Cabinet Resolution No. 97 of 2022, the ILOE "subscription salary" is the worker's basic monthly wage. The premium is up to AED 5 a month where the basic is AED 16,000 or less, and up to AED 10 a month above that. The benefit is 60% of the subscription salary for up to three months per claim. It is capped at AED 10,000 a month in the first category and AED 20,000 in the second, with a maximum of 12 months of benefit across the insured's whole period of service in the UAE labour market (Article 10(2)). Conditions include 12 consecutive months of contributions with all premiums paid, a job loss not caused by resignation or disciplinary dismissal, and a claim filed within 30 days of the job ending, or of the court's decision where the dispute went to court (Article 9). The figures can change, so confirm current values with MOHRE. See Cabinet Resolution No. 97 of 2022 and our ILOE guide.

The Savings Scheme is a voluntary alternative to gratuity. Under Cabinet Resolution No. 96 of 2023, a participating employer pays 5.83% of the monthly basic wage for service of up to five years and 8.33% after that. It is not deducted from the worker's wage.

What uses your full wage instead

• Your monthly pay. Wages must be paid on their due dates, in the manner agreed in the contract, through the Wage Protection System or another MOHRE-approved system (Executive Regulation Art. 16(1)). Under MOHRE's ministerial resolution on the Wage Protection System, salaries for the previous month are due on the first day of each Gregorian month (u.ae).
• Leave you take. Annual leave taken during service is paid at the wage. Unused days cashed out when your service ends are paid on the basic salary instead (Executive Regulation Art. 19(2)), and our leave salary guide covers both.
• Treatment after a work injury. The employer pays the full wage during treatment for up to six months, then half the wage for up to six more months.
• Deduction limits. The Article 25 caps are measured against the total wage. Our guide to salary deduction rules explains which figure the cap applies to.

When the contract ends, Article 53 makes all wages and entitlements due within 14 days.

A worked example

Take an illustrative monthly package of AED 18,000: basic AED 10,000, housing AED 6,000, transport AED 2,000.

• Gratuity after three full years: 3 × 21 = 63 days' basic wage, measured on AED 10,000, not AED 18,000.
• ILOE benefit if eligible: 60% × AED 10,000 = AED 6,000 a month.
• Savings Scheme contribution, if the employer uses it: 5.83% × AED 10,000 = AED 583 a month.
• Death compensation: 24 × AED 10,000 = AED 240,000. That exceeds the cap, so the family receives AED 200,000.

Move AED 2,000 from housing into basic and the gratuity, ILOE and Savings Scheme figures all rise, while the total package stays the same. Death compensation stays at its cap.

How to check your basic salary, and what happens in a dispute

Start with the contract. Article 10(1) of the Executive Regulation, Cabinet Resolution No. 1 of 2022, requires the contract to state "the wage as agreed upon including benefits and allowances". Look for the basic figure in your MOHRE-registered contract. If the contract shows only one total, ask your employer in writing how the basic was set. The text is in the Executive Regulation. A salary certificate from your employer usually states it too.

If the contract says nothing. Article 22(1) of the Labour Law provides that where the wage is not specified in the contract, the competent court specifies it as a labour dispute.

Proving the figure. Article 8(2) lets the worker prove the contract and the wage amount "by all possible means of proof", so keep payslips and bank statements.

Can the employer cut your basic? The basic is part of the wage fixed in your registered contract (Labour Law Art. 22(1)), and wages must be paid in the manner agreed in the contract (Executive Regulation Art. 16(1)(a)). No provision we reviewed deals expressly with a one-sided cut to the basic wage. Whether it holds depends on your facts, so confirm with MOHRE or a licensed UAE lawyer. Our guide to the employment contract addendum explains how agreed changes are recorded.

Complaints. MOHRE decides individual disputes by decision where the claim is not more than AED 50,000. Larger claims go to court after an attempt at amicable settlement. The steps are in our guide on how to file a labour complaint with MOHRE, and the dictionary explains an unpaid wages claim. Time limits apply to wage claims and were amended after 2021, so confirm the current period with MOHRE before you wait.

Mistakes to avoid

1. Assuming the law fixes basic at a percentage. Onshore, it does not, so negotiate the split at the offer stage.
2. Calculating gratuity on the total package. It uses the basic wage only.
3. Treating the rest-day premium as 50% of total pay. It is measured on the basic wage for that day.
4. Relying on a verbal figure. The written contract governs.
5. Mixing onshore and DIFC rules. The DIFC's 50% basic-wage floor for gratuity and DEWS contributions has no onshore equivalent.
6. Waiting too long to claim. Time limits apply.

Next step

Check that the basic figure matches across your contract, payslips and salary certificate. If it does not, raise it with your employer in writing, then with MOHRE. For a larger claim or a settlement that does not add up, compare labour and employment lawyers on LEXAI.

This is general legal information, not legal advice. Confirm current procedure with the relevant authority or a licensed UAE lawyer.