One of the most common reasons to why people move to Dubai, is its Tax Policy, because in the UAE, Income Tax has been 0% for a long time. And that doesn’t mean it will stay like this forever, but it does mean that if you move this year, you will receive your full salary at the end of the month - with no discounts made in Tax.
It is true that there is no personal income Tax in Dubai, but saying there are no taxes at all, is incorrect. So what are the types of Taxes that exist in the UAE:
VAT - 5% on most goods and services. This is applied directly on the price of the products you purchase.
Excise Tax - 50% to 100% on goods that are harmful to people’s health (such as Tobacco and energy drinks with excess sugar, among others). This is also applied directly onto the prices of the products.
Property Tax - This depends on the Emirate and area, but in Dubai, you may be required to pay a 5% Municipality Tax every year. Find out more about your Housing Fees here.
There are also corporate Tax brackets that apply for businesses which depend on the zone in which they’re established, their nature of business, and many other factors. Some businesses may also be entitled to pay a Social Security Contributions on a monthly basis.
Like most countries on earth, the UAE also experienced inflation in the past few years, with it being particularly noticeable in housing prices. This, in combination with higher demand (more people than ever moving to Dubai), expenses have noticeably risen for Dubai residents.
In addition, it’s important to keep in mind that while you’re not paying any Income Taxes, services that are often Public in other countries, such as Healthcare and Education, are private in the UAE and therefore you need to account for these expenses too.
So, what are the main expenses for Expats living in Dubai?
Housing - Your rent and bills will realistically take between 20% and 40% of your total salary on average. This is the biggest and most important expense you will have on a monthly basis, so it’s important to choose your neighbourhood and house carefully. Keep in mind that there are many other costs apart from rent, when you live in a rental home. You can check out our Dubai Housing Fees calculator to learn more.
Food - Everyone needs to eat. Now, whether you eat in fancy restaurants, order food every day, or do your groceries at a local supermarket, will heavily impact the final bill you have on food at the end of the month. You can try out Cost of Living Calculator to estimate your food and monthly costs.
Transportation - How you get yourself to and from work will dictate your cost in this realm. Taking a bus or metro is much cheaper than renting a car, as with that you need to account for insurance, petrol and even tolls (Salik). Plus, the type of car you choose to rent, may double or cut your costs in half!
Healthcare - There is no public healthcare and pretty much all insurance plans involve some level of co-pay, so you will need to have a budget for healthcare expenses.
Schools - This of course only applies if you have children, but Schools in the UAE are private and known for being quite pricey. Sign up to see the prices of all the Schools in Dubai.
Leisure - Absolutely option and it really depends on your preferences in life. In Dubai there is a million of things to do, and if you want to have fun, allocating some money for it is important.
Instead of just trying to predict how much all of these will cost, use our free Cost of Living Calculator to estimate your costs before you even move!
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