In 2025, salary increases in the UAE are expected to be minimal or non-existent, according to recruitment experts. This is due to high wages and a continuous flow of talent from other countries.
There are currently more candidates than available jobs, which is slowing the job market, says Trefor Murphy, founder and CEO of Cooper Fitch. “If you compare what accountants earn in Dubai to those in London or New York, salaries here are already at the higher end. Plus, they are tax-free,” he explains. Many companies report that employees in the UAE and Saudi Arabia receive some of the highest pay within their global teams.
He adds, “The cost of doing business has gone up. Dubai isn’t a hardship location; it’s a desirable place to live compared to London with a 45% tax rate or New York.”
While UAE employees have enjoyed tax-free salaries and regular raises, this trend cannot continue indefinitely, says Mr. Murphy.
Salary Trends and Projections
HR consulting firm Mercer predicts a 4% increase in UAE salaries in 2025 based on a survey of over 700 companies. However, a growing gap between pay for new hires and existing employees is becoming a significant concern, according to Andrew El Zein, UAE career products leader at Mercer.
Hiring Trends in 2025
The job market is expected to stay stable in 2025, says Zahra Clark, head of the MENA region at Tiger Recruitment. The UAE continues to attract expatriates, which increases competition among jobseekers. Many candidates are willing to accept salaries below market standards, potentially leading to lower wages in some roles. However, demand for skilled professionals, especially in high-growth sectors, remains strong.
Nicki Wilson, managing director at Genie Recruitment, describes the UAE as a “hot market.” Many businesses are expanding or setting up in the region, and people are drawn to its lifestyle, safety, and opportunities. Mercer reports that over 28% of UAE organizations plan to increase their workforce in 2025.
The UAE’s hiring focus is also shifting towards skills and future-focused roles, says Nevin Lewis, CEO of Black and Grey HR. Candidates with updated skills and adaptability stand out in the competitive market.
Industries Offering Wage Hikes
Mercer data reveals the following industries are likely to offer the highest salary increases in 2025:
- Consumer goods: 4.5%
- Life sciences and technology: 4.2%-4.1%
- Energy and financial services: 4%
Skills in social media, digital marketing, artificial intelligence, and technology are highly sought after, notes Ms. Wilson. Meanwhile, sectors like retail may see salary reductions due to high redundancies and a surplus of junior talent.
Bonus Expectations
Bonuses will depend on individual and company performance. According to Tiger Recruitment, bonuses could range from 2% to 30% of annual salaries, with industries like real estate, finance, and high-growth sectors being the most generous. Mercer notes that short-term incentives make up around 12% of the total pay mix in sectors that traditionally offer bonuses.
Ms. Wilson highlights that the food and beverage industry has seen an increase in bonuses, while many companies are also focusing on providing additional benefits like housing allowances or flexible working options.
Additional Benefits for Employees
With the rising cost of living, companies are enhancing benefits to retain talent. Ms. Wilson mentions a rise in wellness-based benefits such as health workshops, duvet days, and on-the-job learning opportunities. Schooling allowances and remote work options are also becoming popular.
Flexible working hours, supported by government initiatives, are helping employees achieve better work-life balance, especially in cities like Dubai, says Ms. Clark. Training in areas like AI is another key area of focus for companies looking to invest in their employees’ growth.
