Key takeaways
- The UAE unemployment insurance scheme, officially Involuntary Loss of Employment (ILOE) insurance, is mandatory for employees in the federal government and private sectors; it has been mandatory since 1 January 2023 under Federal Decree-Law No. 13 of 2022.
- ILOE insurance costs AED 5 plus VAT a month for employees with a basic salary of AED 16,000 or below, and AED 10 plus VAT a month above that, as listed on the official ILOE site in October 2026.
- An employee who fails to subscribe, or who stops paying premiums, faces a AED 400 fine in each case, according to the u.ae government portal (page updated 8 December 2025).
- ILOE pays 60% of the average basic salary of the previous six months, for up to 3 months per claim, capped at AED 10,000 a month (lower category) or AED 20,000 a month (higher category).
- ILOE pays nothing until the insured person has been subscribed for 12 consecutive months, and the claim must be filed within 30 days of the end of employment.
- Business owners who are investors in the company they work for are exempt from ILOE, as are domestic workers, temporary-contract workers, people under 18 and pensioners who start a new job.
Is unemployment insurance mandatory in the UAE?
Yes. ILOE insurance is mandatory for employees in the federal government and private sectors, whether Emirati or resident, and the legal basis is Federal Decree-Law No. 13 of 2022. The Ministry of Human Resources and Emiratisation (MOHRE) states that subscribing is the employee's responsibility, not the employer's.
The deadline for existing employees to subscribe passed in October 2023; fines started on 1 October 2023 after an extension from 1 July 2023. For private-sector employees who received a work permit after 1 October 2023, MOHRE said in December 2023 that they have four months to register before the fine applies.
The scheme sits alongside the instruments listed on the u.ae portal: Cabinet Resolution No. 97 of 2022 on implementation, Ministerial Decision No. 604 of 2022, and Ministerial Decision No. 340 of 2023 on the penalties.
How much does ILOE insurance cost?
ILOE has two categories, set by the employee's basic salary, and the monthly premium is AED 5 or AED 10 plus VAT. Policies run for one or two years, and VAT on the whole policy is added to the first instalment (ILOE site, October 2026).
| Category | Basic salary | Premium (plus VAT) | Maximum monthly compensation |
|---|---|---|---|
| A | AED 16,000 or below | AED 5 a month | AED 10,000 |
| B | Above AED 16,000 | AED 10 a month | AED 20,000 |
Premiums can be paid monthly, quarterly, every six months or annually. The ILOE portal and ILOE app are the free channels; other channels (Tasheel and Tawjeeh centres, Al Ansari Exchange, kiosks, Botim) can carry a service charge. Employees paid purely on commission, with no basic salary in their contract, may choose either category.
AED 400: fine for an employee who does not subscribe to the unemployment insurance scheme, and a further AED 400 for not paying premiums. Source: u.ae, "Insurance against job loss" (updated 8 December 2025), checked 23 October 2026.
Who is exempt from the unemployment insurance scheme?
Five groups are exempt: investors (owners of the establishment where they work), domestic workers, employees on temporary contracts, anyone under 18, and pensioners who start a new job (including Emiratis who meet the retirement conditions). Everyone else in the federal government and private sectors needs a policy.
The exemption for investors matters for owner-managed companies. If you own the business you work in, you're outside the scheme; a salaried manager with no ownership stake is inside it. Where an owner holds a small stake and also draws a salary, the sources I checked don't say how the line is drawn, so confirm with ILOE before assuming either way.
Free zone employees are a separate question. The official pages describe the scheme as covering the federal government and private sectors, and none of the pages I read addresses free zone staff by name. Check your own status with the ILOE helpline (600599555) or MOHRE before relying on either assumption.
What does ILOE pay, and when can you claim?
ILOE pays 60% of the employee's average basic salary over the six months before job loss, for a maximum of 3 consecutive months per claim, and the insured person must have paid premiums for at least 12 consecutive months. A claim must reach the insurer within 30 days of the end of the labour relationship, and the insurer pays within two weeks of submission, according to u.ae.
| Rule | Detail | Source |
|---|---|---|
| Compensation | 60% of average basic salary over the last 6 months | ILOE site, policy terms |
| Maximum per claim | 3 consecutive months | ILOE site, policy terms |
| Lifetime cap | 12 monthly payments in total across all claims | ILOE site |
| Waiting period | 12 consecutive months of subscription | u.ae, ILOE policy terms |
| Claim window | 30 days from end of employment | u.ae, ILOE policy terms |
| Payment | Within 2 weeks of submitting the claim | u.ae |
A claim fails if the employee resigned, was dismissed for disciplinary reasons, has an absconding complaint against them, or if the claim rests on fraud or a fictitious employer. Compensation stops if the person finds a new job during the payout period.
What happens if you don't pay the premium or don't subscribe?
The fine is AED 400 for not subscribing and AED 400 for not paying premiums, and the employee, not the company, is the person fined. MOHRE said in December 2023 that unpaid fines can be deducted from salary or end-of-service benefits, and that non-payment can lead to administrative measures such as refusal of new work permits.
Under the ILOE policy terms, a premium more than 90 days overdue cancels the certificate, counts as an interruption in subscription, and fines apply; premiums already paid aren't refunded.
One discrepancy: MOHRE's December 2023 news item quoted AED 200 for a missed instalment, while the u.ae portal (updated December 2025) lists AED 400 for not paying premiums, after the penalty amendments in Ministerial Decision No. 340 of 2023. This post uses the later u.ae figure; confirm the current amount on the MOHRE app before paying.
How do you subscribe or claim?
You subscribe through the ILOE website or app using your Emirates ID or Unified Number and a valid UAE mobile number.
- Open the ILOE portal (iloe.ae) or the ILOE app and enter your Emirates ID or Unified Number.
- Pick your category (A or B) by basic salary.
- Choose a payment frequency: monthly, quarterly, every six months or annually.
- Pay the premium plus VAT through the portal, the app or another authorised channel.
- Download your insurance certificate from the portal.
To claim, submit the claim to the insurer within 30 days of the end of employment, with the dismissal document showing the date and reason, and an undertaking to provide the final court ruling if a labour case exists (ILOE policy terms).
What most guides don't tell you
- The 12-month wait means a new hire is uncovered for a year. An employee who subscribes when joining your company can't claim for 12 consecutive months, so a redundancy in month eight pays nothing. Interruptions in payment longer than three consecutive months also affect eligibility under the policy terms.
- The fine lands on the employee, but the work permit pays the price. Because unpaid fines can lead to refusal of new work permits and can be deducted from end-of-service benefits, a lapsed policy can surface at the worst moment: during a visa renewal or a final settlement. Checking that each hire has an active certificate at onboarding costs a few minutes.
- Owners are exempt, their managers aren't. If you've set up a company so that a director holds no shares, that director is an employee for ILOE purposes. Say a family business has a salaried finance manager and two owner-directors; only the finance manager needs a policy.
If you'd rather not track these dates by hand, the free UAE compliance calendar lists your company's tax and compliance deadlines, personalised from a few questions, as a PDF and calendar file.
Which deadlines apply to your company?
ILOE is one of several recurring obligations that sit across your staff, your licence and your tax registrations. The free UAE compliance calendar lists the deadlines that apply to your company, personalised from a few questions, as a PDF and calendar file.
Frequently asked questions
Do I need health insurance for my employees in Dubai? Yes: according to u.ae (MOHRE guidance, updated 28 October 2025), Dubai employers are required to provide health insurance coverage for their employees. This is separate from ILOE insurance, and sponsors must also insure resident dependants.
How much notice does an employee need to give in the UAE? The notice period under Article 43 of the UAE Labour Law is a minimum of 30 days and a maximum of 90 days, served in writing. A party that doesn't serve the full notice owes the other a notice-period allowance based on the worker's last wage.
What is the Emiratisation requirement for private companies? According to MOHRE, private-sector companies with 50 or more employees must raise the number of Emiratis in skilled positions by 2% each year. Companies with 20 to 49 employees in specified economic activities must hire at least one UAE national and keep any Emiratis already employed.
Do free zone companies have Emiratisation targets? The MOHRE Emiratisation targets page doesn't state whether free zone companies are covered, so check with MOHRE or your free zone authority before assuming you're in or out.
About Qawi · Qawi is a corporate services firm licensed in the Sharjah Media City (SHAMS) free zone, handling company formation, visas and PRO, bookkeeping, VAT and corporate tax for UAE businesses. Guides are researched from FTA, Ministry of Finance and free zone sources. Qawi on LinkedIn
Sources
- u.ae: Insurance against job loss
- ILOE (Dubai Insurance): official scheme site
- ILOE: Involuntary Loss of Employment policy terms and conditions
- ILOE: scheme flyer
- MOHRE: fines to be imposed on workers who fail to comply with the Unemployment Insurance Scheme (13 December 2023)
- MOHRE: fines for not subscribing to be imposed on 1 October instead of 1 July (15 June 2023)
- u.ae: Getting a health insurance
- u.ae: Terminating employment contracts and arbitrary dismissal
- MOHRE: Emiratisation targets
Last checked: 23 October 2026
This is general information, not tax or legal advice for your specific situation.