work permit

Boost to Bottomline – over 50 % drop in work permit costs

Work Permit costs have been reduced by 50 % for skilled labor!!

A recent news article on Khaleej Times (dated 11th July, 2019) highlighted the slashing of rates for labor related charges by the Government. This is one of the best news to come out in recent times along with other similar positive actions by the pro-active government, like visa related relaxations.

While these decisions were taken some time back, as per standard practice once, a decision is taken, then a team works at putting in place a clear process around the decision, prior to implementation.  We have now reached the point where the process has been established with the approvals notified in the newspapers.

Labor costs are one of the key cost components for all businesses in the region. Majority of staff members are expats in the region, this requires that these staff members be recruited either by sponsorship of the employer or register them as your employee based on relative work permits. The costs for the same is dependent on the category of the company and whether the employee being recruited falls under skilled or unskilled category.

On an average the cost of recruiting one staff member sponsored by an employer can cost approximately AED. 9000/-, this includes work-permit, change status, emirates ID, Medical and resident visa stamping. So, consider a business with 10 employees it costs them 90,000/- for getting the employees on board for a two-year period.

The recently announced reduction in rates for Work-Permit comes as a windfall for businesses in these difficult times. A snapshot of the changes as reported in the newspaper is presented below:

Work permit issuance rates:

2 year work permit issuance

New Rates

Old Rates

Benefit

Company Category

Skilled

Unskilled

Skilled

Unskilled

Skilled

First Category

 150.00

 300.00

 300.00

 300.00

 150.00

Second Category

 

 

 

 

 

A

 250.00

 1,200.00

 500.00

 1,200.00

 250.00

B

 500.00

 2,200.00

 1,000.00

 2,200.00

 500.00

C

 750.00

 2,700.00

 1,500.00

 2,700.00

 750.00

D

 1,000.00

 3,200.00

 2,000.00

 3,200.00

 1,000.00

 

Third Category

 2,500.00

 5,000.00

 5,000.00

 5,000.00

 2,500.00

 *Source Khaleej Times report dated 11th July, 2019

The initiative is also in line with the objective to make this part of the world attractive to skilled labor force. It can also be viewed as taking a pro-active option of reducing the rates for skilled labor instead of increasing the rates for unskilled labor.

Hiring a skilled employee, requires provision of attested qualification certificates to evidence that the employee being hired is skilled and qualified for the position. There is a full process for acceptable attestation of the certificate, we at overture do offer the services for attestation.

In view of the changes in rates, if a business employs 10 skilled employees, the issuance or renewal costs are expected to drop by a massive 1500 for category A companies to 25000 for a category 3 company, the absolute value of savings would depend on the category of the company.

The rates quoted above are specific only to the issuance or renewal of the work permit. The actual costs for issuance or renewal, has several steps which charges for each step like, Offer Letter, Offer Letter submission, Work Permit contract and labor card application, issuance of work permit, change status, and then the actions for employment visa stamping. This is being highlighted so the reader understands that the cost for getting a new staff on board is not only the rates quoted in the above table.

We at Overture Accounting and Bookkeeping LLC, provide a full suite of PRO services in Dubai.  We can support you with document attestation and with all your labor and immigration requirements for employing new staff members or renewing existing employees work permit and labor cards.

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2019-07-25

2 Comments

  1. The rates quoted above are specific only to the issuance or renewal of the work permit. The actual costs for issuance or renewal, has several steps which charges for each step like, Offer Letter, Offer Letter submission, Work Permit contract and labor card application, issuance of work permit, change status, and then the actions for employment visa stamping. This is being highlighted sothe reader understands that the cost for getting a new staff on board is not only the rates quoted in the above table.

    1. Author

      You are right. The last paragraph specifically highlights the same in clear detail stating that this is only the issuance charge and several other charges are applicable for getting a work permit issued

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