Employee management plays a crucial role in every company, especially with so many reports floating online about whether employees in the UAE can expect a salary increment in 2025. While experts continue to discuss the implementation of hybrid policies and work-from-home structures to enhance overall well-being, many are also highlighting that employees are raising concerns about pay hikes within the management given the increasing cost of living in the region.
Nova Raja Manikam, Talent Acquisition Specialist, REACH Business Center, said, “Despite some optimism about salary hikes, the reality may not meet employee expectations. While 75% of employers in the UAE reportedly plan to increase salaries, the projected average increase of around 4% is modest and may not keep pace with inflation or the rising cost of living in the region.”
Nova believes certain sectors are scaling back on salary budgets, citing global economic pressures and cost-cutting measures, while industries such as retail and hospitality are seeing stagnant wages, and mid-level employees in non-specialized roles may face limited opportunities for pay growth.
“For many employees, salary increments might feel more like a minor adjustment rather than a meaningful improvement in purchasing power,” Manikam explained.
Also, Austin Fernandes, Senior HR Ops & Payroll Specialist, PAPEL Holding, said, “I think salaries would increase in certain industries such as Real Estate, Financial Services, Insurance, and construction sectors. With more and more projects by Developers and start-up companies, and digital transformation, the requirement for talent is more to sustain growth.”
He added, “To keep top talent, companies need to give the right salaries and with the growth projection of UAE as an economy, I’m sure the salary structure across most of the sectors will see a competitive increase.”
Speaking about changes in payroll structures in 2025, Fernandes noted that since payroll in the UAE is simpler compared to other countries, the major shift will likely involve the adoption of in-house payroll software or outsourcing payroll operations.
Especially where the workforce is huge, companies are shifting to robust software solutions to cut time spent on payroll. Meanwhile, many reports suggest salaries will be someday paid in Crypto. “But honestly not aware of how companies foresee it as a payment option to employees considering proper training on crypto,” he elaborated.
Raihan M, Payroll Specialist at Pharmalink Drug Store, shared a contrasting perspective, stating that employees can expect salary increments in 2025. However, he also emphasized that no new rules are expected in the payroll structures unless there are changes in UAE labor laws or company policies.