UAE Income Tax Calculator

Complete Guide to UAE Income Tax, Salary Planning and Corporate Tax

This extended guide is built around the UAE Income Tax Calculator on this page. It explains how salaries, social security, and business profits work in the United Arab Emirates, and how you can use online calculators to plan your finances more confidently.

Because the UAE has no personal income tax on employment income, many people assume the system is “zero tax” across the board. In reality, there are still important concepts to understand: employee pension contributions for UAE and GCC nationals, cost of living, savings rates, and the federal 9% corporate tax on business profits above a certain threshold. This guide puts all of that into a practical, calculator-first framework.

1. Understanding How Salary Works in the UAE

When you receive a job offer in Dubai, Abu Dhabi, Sharjah or any other emirate, your compensation is usually expressed as an annual or monthly gross salary in AED. In many offers, this is a single number, while in others it is broken into components such as basic salary, housing allowance, transport allowance, and other fixed benefits.

For the purposes of this calculator, the key building blocks are:

• Annual Gross Salary: The core salary amount agreed in your contract.
• Monthly Fixed Allowances: Housing, transport, or other recurring benefits that are paid alongside your salary.
• Total Annual Package: The sum of your annual salary plus 12 months of fixed allowances.

Unlike many countries, there is no personal income tax deducted from these amounts in the UAE. This is why you will often hear people describe UAE salaries as “tax free.” However, you should still consider other items that reduce your disposable income, such as rent, schooling, transport, and day-to-day living costs.

2. UAE and GCC Nationals vs Expat Employees

The UAE treats different groups of employees slightly differently when it comes to social security and retirement benefits. The calculator lets you select whether you are an Expat / Non-GCC or UAE or GCC national to reflect this.

Expat / Non-GCC Employees

For expats, most employers do not deduct UAE social security from your salary. You typically receive your full agreed package in cash, and your retirement benefit is provided via a separate end-of-service gratuity that accrues based on your basic salary and years of service.

Because there is no salary income tax, your net income for expat employees is usually equal to the total package, less personal spending and any voluntary savings or investments you choose to make.

UAE and GCC Nationals

For UAE and GCC nationals, a portion of salary is contributed to the state pension or social security system. The calculator models this as a percentage deduction from the total package. While the exact rules can vary between emirates and over time, the concept is simple: part of your salary today funds your future pension.

In the results, you will see:

• Employee Social Security: The estimated annual contributions deducted from your package.
• Net Annual Income: What remains after these contributions.
• Net Monthly Income: Your approximate monthly take-home pay.

3. Estimating Monthly Savings Capacity in the UAE

Living in the UAE can be relatively expensive, especially in popular cities like Dubai and Abu Dhabi. That is why the calculator also includes an input for Estimated Monthly Personal Expenses. This is not a tax or mandatory deduction, but a practical way to see how much you might realistically save each month.

To use this feature effectively:

• Estimate your monthly rent, utilities, groceries, school fees, transport, and lifestyle spending.
• Enter that number into the Estimated Monthly Personal Expenses box.
• Run the Salary calculation to see your Estimated Monthly Savings result.

The savings figure represents a rough amount you could direct into investments, emergency savings, or debt repayments. For example, you could pair this output with the Investment Calculator or Compound Interest Calculator to model how regular savings in AED might grow over time.

4. UAE Corporate Tax: From 0% to 9% on Profits

For many years, the UAE was known as a zero-tax jurisdiction for both individuals and most companies. With the introduction of federal corporate tax, the landscape became more nuanced. Salaries are still tax-free, but business profits can now be taxed at a standard rate on income above a 0% threshold.

The Business / Corporate Tax tab in this calculator is designed to mimic the most common scenarios in a simplified way:

• 0% band up to a threshold: A certain amount of taxable profit (for example AED 375,000) is taxed at 0%.
• Standard corporate tax above the band: Profits above that threshold are taxed at a flat percentage (for example 9%).
• Mainland vs Qualifying Free Zone: Mainland entities are typically fully in the corporate tax net, while qualifying free zone entities may enjoy 0% on qualifying income, subject to complex conditions.

By entering your annual taxable profit and adjusting the threshold or rate if needed, you can see:

• Your taxable profit in AED.
• Total corporate tax payable.
• Profit after tax, which can be distributed as dividends or reinvested.
• The effective tax rate on your profits.

If you are operating as a freelancer, consultant, or small business owner, you can use this tab alongside the Finance Calculator, All-in-One Finance Calculator, and Payment Calculator to understand how profits, loan payments, and cash flow interact over the year.

5. Linking Salary, Savings and Long-Term Wealth in the UAE

Once you understand your net salary and potential business profits, the next step is to connect those numbers to long-term goals such as retirement, financial independence, or property ownership in the UAE or abroad.

You can build a simple personal-finance workflow around the calculators on MyTimeCalculator:

1. Use this UAE Income Tax Calculator to estimate net income and monthly savings capacity.
2. Estimate how much you can allocate towards investments each month.
3. Use the Retirement Calculator to estimate how much you need to retire or reach a FIRE-style target.
4. Use the Investment Calculator and Compound Interest Calculator to project the growth of your investment portfolio.
5. If you are considering a property purchase, plan the loan with the Mortgage Calculator, Loan Payment Calculator and APR Calculator.

By combining these tools, you can turn your UAE salary into a long-term strategy, instead of just a monthly paycheck that disappears into expenses.

6. Example: Expat Employee in Dubai

Imagine an expat living and working in Dubai with the following package:

• Annual gross salary: AED 240,000 (AED 20,000 per month).
• Monthly fixed allowances: AED 2,000 (for housing or transport).
• Estimated monthly expenses: AED 8,000.
• Nationality: Expat / Non-GCC.

In the Salary tab:

• Annual allowances are AED 24,000 (AED 2,000 × 12).
• Total annual package becomes AED 264,000.
• Income tax is AED 0 because employment income in the UAE is not taxed.
• Social security for expats is AED 0 in most cases.
• Net annual income is AED 264,000, or AED 22,000 per month.
• Estimated monthly savings are AED 22,000 − AED 8,000 = AED 14,000.

This is a simplified, rounded illustration, but it shows how surprisingly high your potential savings rate can be if you keep lifestyle inflation under control. You could then run AED 14,000 per month through the Investment Calculator or Credit Card Interest Calculator (if you carry debts abroad) to decide how best to allocate that surplus.

7. Example: UAE National in Abu Dhabi

Now consider a UAE national living in Abu Dhabi:

• Annual gross salary: AED 300,000.
• Monthly allowances: AED 3,000.
• Estimated monthly expenses: AED 10,000.
• Nationality: UAE or GCC national.

In this scenario:

• The calculator combines salary and allowances into a total package.
• It applies an estimated employee social security contribution for a UAE national.
• Net annual and net monthly income are slightly lower than the case of an expat with the same package, but the national is effectively funding their future pension.
• Estimated monthly savings can still be substantial, especially for younger professionals who keep expenses moderate.

You can use this kind of scenario planning to negotiate offers, compare jobs, or decide whether a move between emirates is financially attractive.

8. Example: Mainland Company with Profits Above the 0% Threshold

Consider a UAE mainland company with the following simplified profile:

• Annual turnover: AED 1,200,000.
• Annual taxable profit: AED 500,000.
• 0% band threshold: AED 375,000.
• Corporate tax above the threshold: 9%.

In the Business tab, the calculator:

• Treats the first AED 375,000 of profit as taxed at 0%.
• Applies 9% tax on AED 125,000 of profit above that band.
• Calculates corporate tax payable on that upper slice.
• Shows the resulting profit after tax and effective tax rate.

You can then combine this output with the Finance Calculator, Payment Calculator, or Loan Payment Calculator to see how loan repayments, equipment financing, or other financing decisions will impact your after-tax profit.

9. Planning for Inflation and Future Costs

The UAE dirham is pegged to the US dollar, which makes currency risk relatively predictable for many expats. However, inflation and cost-of-living changes can still erode the real value of your salary and savings over time.

You can use the Inflation Calculator alongside this UAE Income Tax Calculator to answer questions such as:

• How much will my targeted savings amount be worth in today’s money after 10 or 20 years?
• What happens if school fees or rent increase by a certain percentage every year?
• How much more do I need to save to maintain the same lifestyle in retirement?

For long-term retirement planning, pair both this tool and the inflation calculator with the Retirement Calculator to simulate realistic, inflation-adjusted retirement targets.

10. Managing Debt and Credit While Living in the UAE

Many residents in the UAE carry some form of debt, whether it is a mortgage, car finance, personal loan, or balance on a foreign credit card. Although the UAE does not tax your salary, high-interest debt can still act like a “shadow tax” on your income.

To understand and manage this, you can use several tools in combination:

• Finance Calculator – to estimate payments on generic loans and financing arrangements.
• Credit Card Interest Calculator – to see the cost of carrying credit card balances and how long they will take to clear.
• All-in-One Finance Calculator – to run multiple scenarios for loans, savings, investments and EMI in one place.
• APR Calculator – to compare offers from banks and lenders on a fair, annualized basis.

By combining these calculators with your net income from the UAE Income Tax Calculator, you can prioritize which debts to clear first, how much to allocate towards EMIs, and how aggressively you can invest at the same time.

11. Related Calculators for UAE Residents

MyTimeCalculator includes a full ecosystem of tools that work well alongside this UAE-focused page. Depending on your situation, you may also find these helpful:

Using these calculators together turns this UAE Income Tax page into a complete financial planning hub tailored to residents and business owners in the Emirates.

12. Limitations and Disclaimer

Although this calculator is designed to be flexible and UAE-specific, it is still a general-purpose planning tool. It does not automatically pull live tax law updates, individual employment contracts, free zone qualifying status, or personal residency rules. You remain responsible for checking official guidance and seeking professional advice where necessary.

Think of this tool as a fast way to run “what-if” scenarios. It gives you clear, AED-based numbers that make discussions with employers, lenders, accountants, or financial advisors more concrete. You can then refine those numbers using documents such as formal tax rulings, corporate tax registrations, or detailed employment contracts.