UAE Salaries to Rise by 2026!

Salary Increases in the UAE by 2026 – What Can Employees Expect?

The economy of the United Arab Emirates continues to prosper, and this is reflected in the labor market: salaries are expected to rise by an average of 4% in 2026. Even more noteworthy, some positions, which are difficult to replace, might see pay raises exceeding 10%. These prospects are significant for those already working in the UAE or seeking new opportunities there.

What is behind the increase?

The primary driver of the salary increase is the region's macroeconomic stability and growth. By 2026, the UAE economy is projected to achieve a real GDP growth of 5.3%, thanks in part to the robust development of non-oil sectors such as construction, financial services, logistics, and advanced industries.

A recent comprehensive survey revealed that 84% of companies either plan to increase salaries or maintain them at the current level. This indicates strong confidence in the future of the labor market, despite the increasing competition for talent.

Differences across positions and industries

While the average salary increase may range between 1.6–4%, some areas may see much larger growth. In specialized fields such as technology, digital transformation, or positions requiring specialized financial expertise, companies may anticipate raises exceeding 10%. These roles are often challenging to fill and are critical to the company's operations and competitiveness.

Conversely, for administrative or entry-level positions, there is often no significant change in salaries expected. However, a different kind of competitive advantage is emerging for these roles through benefits packages.

The resurgence of benefits

Although changes in the monthly base salary are not substantial everywhere, more companies are beginning to offer benefits that were previously cut due to the pandemic or other economic constraints. These include family support, education allowances, or expanded health insurance packages.

These non-monetary benefits are particularly attractive to those in higher positions who plan to remain in the UAE for the long term. Companies use this strategy to stay competitive and retain key personnel in an increasingly mobile and aware labor market.

Flexibility, hybrid work, and mental well-being

Recently, factors that are not directly related to salary but significantly impact job selection have come to the forefront. Flexible schedules, the possibility of hybrid work, and programs supporting employees' mental and physical well-being are no longer merely "extras" but expected elements of workplace culture.

Many companies recognize this and value the resources dedicated to employee well-being as crucial to loyalty and long-term productivity.

The situation of newcomers and job seekers

For those trying to enter the UAE labor market, not only is salary important, but also networking and local labor market dynamics are crucial. Securing suitable positions often happens not through traditional job ads but via networking, recommendations, attending events, and establishing personal connections.

New market entrants need a well-structured resume and cover letter and must actively participate in professional communities and leverage digital and personal networking power.

Why is all this important to employees and companies?

Salary increases are interesting not only economically. Wage trends directly affect employee living standards, satisfaction, and commitment. Simultaneously, it is a critical factor for companies since satisfied and motivated employees are more productive, loyal, and less likely to change jobs.

The intensification of labor market competition necessitates companies to adopt thoughtful salary and benefits strategies, particularly for positions of strategic importance.

Summary

By 2026, the UAE can anticipate strong economic growth and a competitive labor market. The expected 4% salary increase, along with even higher growth in key areas, indicates a favorable period for employees.

However, salary is no longer the sole decisive factor in job selection. Benefits, flexibility, workplace culture, and growth opportunities also influence employees' decisions, equally affecting the monthly wage.

Therefore, companies require a complex strategy not only to attract but also to retain talent – employees should keep an open eye on changes and actively seek the opportunities that best suit them on the dynamic and evolving market of the United Arab Emirates.

(Source of the article is based on reports from Dubai business leaders and HR personnel.)