Evaluating UAE Job Offers: Why Basic Salary is King
When evaluating multiple employment contracts in the UAE, looking solely at the headline monthly package can be misleading. Two offers both advertising AED 20,000 per month can result in vastly different wealth accumulation over a multi-year career.
The Compound Impact on Gratuity
Because End of Service Gratuity in the UAE is legally tethered strictly to your Basic Salary (Article 51):
- Higher Basic Salary: For every additional AED 1,000 in monthly basic salary, your annual gratuity accrual increases by AED 700 per year for each of the first 5 years (21 days ÷ 30 days = 70%), and by AED 1,000 per year for each year beyond 5 years (30 days ÷ 30 days = 100%).
- Overtime Calculations: If your position is eligible for statutory overtime under Article 19, your hourly overtime compensation is derived entirely from your basic rate.
Non-Monetary Contract Items to Verify
- Medical Insurance: Does the policy cover network hospitals across Dubai and Abu Dhabi? Are family members (spouse and children) covered?
- Notice Period: While the legal minimum is 30 days and maximum is 90 days, check whether the contract stipulates a 30, 60, or 90-day departure period.
- Non-Compete Clause: Article 10 of the UAE Labour Law permits non-compete clauses, but they must be limited in duration (maximum 2 years), geographic scope, and nature of business.