Employment rules · 7 min read · Updated October 2026
UAE free zones and the mainland: which employment rules apply where, and what they change in payroll
How employing people differs between the UAE mainland, its free zones and the two financial free zones in Dubai and Abu Dhabi: which employment law applies, who issues permits, how pay is protected, how end of service works and where an Emirati national's pension sits.
Which employment rules apply in a UAE free zone?
The federal Labour Law applies on the mainland and in most free zones, where each free zone's own regulations sit beside it. The DIFC and ADGM, the two financial free zones, have employment laws of their own. Work permits come from MOHRE on the mainland, and through the free zone authority in a free zone. WPS covers establishments registered with MOHRE. The DIFC replaces the gratuity with monthly DEWS payments. Emirati nationals build up a pension wherever they work.
See which employment law applies where
A UAE business is licensed in one of three kinds of place: the mainland, a free zone, or one of the two financial free zones. The place sets which employment law applies, and who issues the permits.
| Where | The employment law | The work permit and the residence visa |
|---|---|---|
| The mainland | The federal Labour Law, Federal Decree-Law No. 33 of 2021 | A work permit from MOHRE. The residence visa through ICP, or GDRFA in Dubai |
| A free zone | The free zone's own employment regulations, together with the federal Labour Law | Applied for through the free zone authority |
| The DIFC, in Dubai | The DIFC Employment Law, DIFC Law No. 2 of 2019 | Obtained by the employer, as federal law, Dubai law and the DIFC require. Where the employer has a sponsorship agreement with the DIFC Authority, the Authority sponsors the employees' work and residence visas |
| ADGM, in Abu Dhabi | The ADGM Employment Regulations 2024, in force since 1 April 2025 | An ADGM work permit, applied for before work starts, with a UAE residence visa and identity card where the employee needs them. Each is applied for through ADGM |
Federal Law No. 8 of 2004 exempts the financial free zones from the UAE's federal civil and commercial laws. Every other federal law still applies there. The DIFC and ADGM each set their own employment rules, in place of the federal Labour Law.
ADGM's regulations do not cover an employer holding a dual licence from Abu Dhabi's Department of Economic Development whose employees are under the Labour Law.
In all four places, the employer pays for the permits. It cannot recover the cost from the employee.
A group can hold licences in more than one place. Each establishment then follows the rules of the place it is licensed in.
See the differences that change your payroll
Most of a payroll is the same wherever the establishment is licensed. These are the rules that change it.
| The mainland and most free zones | The DIFC | ADGM | |
|---|---|---|---|
| How pay is checked | WPS, for every establishment registered with MOHRE. In a free zone, as its own rules set | Outside WPS | Outside WPS |
| End of service for an expatriate | The Labour Law's gratuity: 21 days' basic pay a year for the first five years, then 30 days, up to two years' pay. An employer can join MOHRE's Savings Scheme instead | A monthly payment into DEWS, or another qualifying scheme, in place of the gratuity since 1 February 2020 | A gratuity of 21 days' basic pay a year for the first five years, then 30 days, with no cap. The employer can offer a pension or savings scheme in its place |
| The basic pay end of service counts | The basic pay in the contract | At least 50% of the wage | At least 50% of the wage |
| Final pay on leaving | Within 14 days of the contract ending | Within 14 days of the termination date. Where more than a week's wage is left unpaid, a day's wage is owed for each day late | Within 21 days of the termination date, variable pay aside. Where more than a week's wage is left unpaid, a day's wage is owed for each day late |
In a free zone, the free zone's own regulations sit beside the Labour Law and can add to it. Each free zone sets how pay is made there. DMCC, for one, requires each company registered with it to pay every employee on its employment visas through WPS, by bank or exchange house, in dirhams.
Our guide to end of service paid monthly sets out DEWS and MOHRE's Savings Scheme in full.
See what five years earn in each place
Take one expatriate from outside the GCC with five years' service, all of it after 1 February 2020. Their wage is AED 20,000 a month: AED 8,000 basic pay, AED 8,000 housing and AED 4,000 transport. The employer ends the contract on notice.
| Where | The basic pay counted | How end of service builds up | After five years |
|---|---|---|---|
| The mainland, or a free zone under the Labour Law | AED 8,000 a month, the basic pay in the contract | 21 days' basic pay for each year, a day being the month's basic pay divided by 30 | AED 28,000, owed by the employer when employment ends |
| The DIFC | AED 10,000 a month, 50% of the wage | 5.83% of it paid into DEWS each month, AED 583 | AED 34,980 paid in, with any gain or loss |
| ADGM | AED 10,000 a month, 50% of the wage | 21 days' basic pay for each year, a day being the year's basic pay divided by 365 | AED 34,520.55, owed by the employer when employment ends |
Here the basic pay in the contract is less than 50% of the wage. The DIFC and ADGM count basic pay at no less than that, so the same years earn more there. Where the contract's basic pay is at least 50% of the wage, all three work on it as it stands.
In ADGM, the gratuity is owed whatever the reason employment ends.
An ADGM employee offered a pension or savings scheme in place of the gratuity confirms their choice in writing. One who chooses the scheme builds up no gratuity, unless the employer agrees otherwise.
Pay each establishment on its own clock
A group licensed in more than one place runs more than one pay deadline. Each is counted from the end of the month the pay is for.
| Where | The month's pay reaches the employee by |
|---|---|
| The mainland | The 1st of the next month, through WPS |
| The DIFC | The 7th of the next month, on a monthly pay period |
| ADGM | The 14th of the next month, on a monthly pay period |
Paid on the 1st of the next month, a month's wages meet all three deadlines. In ADGM, a pay period runs a month at most.
WPS checks the wages of each establishment registered with MOHRE, under its own registration. In ADGM, how wages are paid is for employer and employee to agree, within the regulations' minimum standards.
A late wage on the mainland sets off MOHRE's measures from the due date. Our guide to payroll in the UAE sets each one out.
Register every Emirati for a pension, wherever they work
An Emirati national builds up a pension in every one of these places. GPSSA asks private employers to register their Emirati nationals, free zone employers included. An Emirati national employed in Abu Dhabi is with the Abu Dhabi Pension Fund instead.
The DIFC's and ADGM's own laws require it too. In the DIFC, an Emirati national or other Gulf national is registered with GPSSA, and builds up no gratuity. In ADGM, they are enrolled in their pension scheme within 30 days of starting. They build up no gratuity unless the pension authority approved their staying out of the scheme.
A national of another Gulf country is registered through GPSSA in all four places, under their own country's scheme. The guide comparing social insurance across the Gulf sets out how.
ADGM's guidance says the federal Emiratisation laws do not apply in ADGM. It also says unemployment insurance is not compulsory there. On the mainland, the Emiratisation guide sets out who the targets cover and when an Emirati national counts.
Set each establishment up for the place it is licensed in
A UAE workforce split across licences is several payrolls in one. Each establishment has its own registration, its own pay deadline and its own end of service rule. A salary file built for the whole workforce at once files people under a registration that is not theirs.
On our payroll, each establishment is set up for the place it is licensed in. A salary file is produced for each establishment that pays through WPS, under its own registration. Your DIFC and ADGM establishments are kept apart, so nothing is filed under a registration that does not exist.
Each country runs on an engine we build and maintain for its law. In the UAE, it works out the gratuity for each expatriate on the mainland and in a free zone, DEWS in the DIFC, and GPSSA for each Emirati. Your entity submits each file and pays its people.
Common questions.
Does the UAE Labour Law apply in a free zone?
Is end of service paid monthly in a free zone?
Does an Emirati national employed in a free zone build up a pension?
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