Third of UAE firms plans to hike wages by up to 5%
The strengthening UAE economy is impacting directly on the recruitment sector, with an increase in demand for staff and salary hikes being paid out across multiple sectors. UAE GDP is expected to grow above 3% in 2024.
In its recent guide to UAE salaries, recruitment consultant Cooper Fitch notes that unemployment is down from4.3% in 2020 to 3.3% in 2022. It said the country’s introduction of unemployment insurance in January 2023 has had a positive impact on the number of employees across the emirates.
“A larger proportion of UAE-based organisations grew their headcount in 2023 than in 2022, and more than half of this year’s respondents intend to increase remuneration in 2024. This is positive news for job seekers in the emirates as greater demand for talent typically results in higher salaries,” said Trefor Murphy, founder and CEO of Cooper Fitch.
The report says that non-oil sectors such as real estate, technology and telecommunications, are investing billions of dollars in planned projects as a consequence of the UAE’s jobs market remaining strong.
Overall headcount grew 59% in 2023 and the report reveals that 56% of respondents from UAE-based organisations expect to hire more people in 2024. At the same time both existing workers and new hires will see their salaries increase.
Cooper Fitch estimates that salaries in the UAE will grow by 4.5% on average across non-oil sectors.
The report added that more than one-third of companies (39%) have plans to raise wages by up to 5%, while almost one in 10 plan to increase salaries by 6%–9%, and one in 20 are preparing for salary hikes of 10% or more.
Furthermore, almost three-quarters of respondents to the recruiter’s survey (71%) said they would pay annual bonuses based on their organisation’s financial performance in 2023; 29% said that they had no such plans.
Jack Khabbaz, Managing Partner and CEO and Public Sector Advisory at Cooper Fitch said: “While salaries continue to play a crucial role in talent retention, factors beyond fixed remuneration – such as annual bonuses and the ability to work remotely – are playing an increasingly important role in the UAE’s job market.”
And employees working in sectors such as accounting, chemicals, consumer goods, and hospitals and healthcare, can look forward to bonuses of six months’ basic salary.
UAE signs agreements to avoid double taxation
The UAE has signed agreements to boost investments and avoid double taxation with Kuwait, Bahrain, Egypt and the World Bank.
The agreements seek to eliminate double taxation, additional taxes, indirect taxes, and tax evasion while addressing the challenges of cross-border trade and investment flows.
The treaties are also aimed at boosting developmental goals and diversifying the Gulf state’s sources of income.
The pacts also account for tax challenges and keep pace with global changes in the economy and financial sectors, new financial instruments, transfer pricing mechanisms, and encourage the exchange of goods and services and the movement of capital.
“These agreements stem from the Ministry of Finance’s commitment to achieving transparency and fairness and enhancing the national economy through strengthening strategic partnerships with various countries and the World Bank,” said Mohamed Hadi Al Hussaini, Minister of State for Financial Affairs.
He added: “He added, “These agreements are significant; besides their inclusion of cooperation in the tax fields, increasing investment opportunities and encouraging trade exchange, they come during the World Governments Summit 2024, the leading global platform aimed at exchanging expertise, ideas, and government experiences, anticipating the future, and promoting growth and prosperity in the world.”
The agreements were signed at the World Governments Summit 2024, which was held recently in Dubai with the theme of ‘Shaping Future Governments’.
To date, the UAE has signed 143 double taxation avoidance agreements and 112 treaties to encourage and protect investments, which collectively provide a legal framework that protects the Gulf state’s investments worldwide.
Double taxation is a tax principle referring to instances where taxes are levied twice on the same source of income. It occurs in an international trade or investment context when the same income is taxed in two different countries.
