UAE Employed vs Freelance vs Company Calculator
Compare your net take-home income across all three UAE work structures — employment, freelance, and company — in real time. Includes corporate tax, gratuity, DEWS, GPSSA, and visa costs.
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In the UAE, the answer depends on your income level and risk tolerance. Below AED 25,000/month, employment usually wins because of gratuity accrual and sponsored visa. Above AED 50,000/month, freelancing or your own company often pays AED 3,000–8,000/month more — but only after accounting for licence, medical insurance, and compliance costs. At AED 83,000+/month (AED 1M+ annually), corporate tax applies to natural-person freelancers, and a company structure may offer better tax planning.
How UAE work structures compare
| Factor | Employed | Freelance | Company |
|---|---|---|---|
| Income tax on salary | 0% | 0% | 0% |
| Corporate tax | N/A | 0% (below AED 1M/yr turnover) | 9% on profits > AED 375k/yr |
| VAT obligation | N/A | Mandatory above AED 375k/yr | Mandatory above AED 375k/yr |
| Social security (GPSSA) | 5% nationals | 5% nationals (self-employed) | 5% nationals (self-employed) |
| DEWS (employer contrib.) | 5.83% of basic (employer pays) | None | None |
| Gratuity (EOSB) | Accrues each year | None | None (unless on own payroll) |
| Visa sponsorship | Employer sponsors | Self-sponsored via free zone | Self-sponsored via company |
| Medical insurance | Employer provided | Self-funded | Self-funded |
| Annual licence / overhead | None | AED 9,000–12,500/yr | AED 15,000–50,000+/yr |
| Net income predictability | High (fixed salary) | Variable (revenue-based) | Variable (profit-based) |
Corporate tax in UAE: correcting the 15% misinformation
Common misconception: "UAE freelancers pay 15% tax"
This is incorrect. The 15% Pillar Two Qualified Domestic Minimum Top-Up Tax (QDMTT) applies exclusively to Multinational Enterprises (MNEs) with consolidated global revenue of €750 million or more. It does not apply to any freelancer, sole trader, or small UAE business of any kind.
The correct rates under Federal Decree-Law No. 47 of 2022 and Cabinet Decision No. 49 of 2023:
- 0%Taxable income up to AED 375,000/year for all entities (including companies)
- 9%Taxable income above AED 375,000/year for standard companies and individuals above AED 1M annual turnover
- 0%Natural-person freelancers with annual turnover below AED 1,000,000 — CT does not apply (Cabinet Decision No. 49 of 2023)
- 0%Companies qualifying for Small Business Relief (revenue ≤ AED 3M/year, until 31 December 2026)
Last verified: July 2026 — Source: UAE Federal Tax Authority — tax.gov.ae
Worked examples
AED 20,000/month expat — Employed wins
Ahmed earns AED 20,000/month as a marketing manager in Dubai. His basic salary is 60% (AED 12,000). His employer provides medical insurance and a UAE residence visa.
Employed
Net: AED 20,000
0% deductions
+ gratuity AED 823/mo
✓ WINNER
Freelance (SHAMS)
Net: AED 18,208
-AED 1,792/mo
(licence + medical + visa)
Company (FZ)
Net: AED 18,000
-AED 2,000/mo
(setup + overhead + medical + visa)
At AED 20,000, Ahmed would need to earn AED 21,792/month freelance just to match his employed net — before considering gratuity.
AED 50,000/month expat — Freelance wins
Sara is a senior software architect earning AED 50,000/month. Her employer covers visa and medical. She is considering going freelance via SHAMS.
Employed
Net: AED 50,000
0% deductions
+ gratuity AED 2,055/mo
Freelance (SHAMS)
Net: AED 48,208
-AED 1,792/mo (fixed costs)
CT: AED 0 (below 1M/yr)
But revenue needed: AED 51,792 to beat employment
Company (FZ)
Net: AED 47,500
-AED 2,500/mo (overhead + setup + medical)
If Sara can charge AED 52,000+/month as a freelancer, she gains AED 2,200+/month net — plus full autonomy. The break-even requires a modest rate uplift.
AED 100,000/month expat — Company wins (CT planning)
James is a management consultant billing AED 100,000/month. At this revenue (AED 1.2M/year), corporate tax applies to freelancers. A company structure enables profit retention and tax deferral.
Employed
Net: AED 100,000
0% income tax
Freelance (SHAMS)
Net: ~AED 93,900
CT applies: 9% on profits > AED 375k
-AED 1,792 fixed costs
Company (FZ)
Net (retained): ~AED 94,500
CT: 9% on profits > 375k
Director can control salary/dividend mix
✓ WINNER (long-term)
At AED 1.2M/year, corporate tax applies to both freelance and company. A company allows James to retain profits in the company entity, smooth personal drawings, and structure future investment — advantages that compound over time.
Frequently asked questions
Is it better to be employed, freelance, or set up a company in the UAE?
At what income does a UAE freelance structure beat employment?
Do freelancers pay corporate tax in UAE?
When do I need to register for VAT as a UAE freelancer?
How much gratuity do I forfeit if I leave employment to go freelance?
Do UAE nationals pay social security if they go freelance?
What is the cheapest freelance licence in UAE 2026?
Can I switch from a freelance permit to a company later?
Official sources
Formula last verified July 2026. Based on Federal Decree-Law No. 47 of 2022 (CT), Federal Decree-Law No. 33 of 2021 (Labour), Federal Decree-Law No. 8 of 2017 (VAT), and Cabinet Decision No. 49 of 2023.