What is UAE unemployment insurance?
UAE unemployment insurance is a state-backed scheme that pays you a monthly income for a short time if you lose your job through no fault of your own. Its official name is the Involuntary Loss of Employment scheme, usually shortened to ILOE. It started on 1 January 2023 and is run under the Ministry of Human Resources and Emiratisation (MOHRE), with a group of insurers led by Dubai Insurance providing the cover.
The idea is simple. You pay a small premium every month. If your employer ends your contract, and you have paid for at least a year, the scheme pays you up to 60% of your basic salary for up to three months while you look for a new job. This gives you breathing space to cover rent, school fees and daily costs, and to search for work without panic.
Joining is mandatory for most employees in the private sector and the federal government. If you do not subscribe, you face a fine. This page explains who must join, what it costs, what it pays and how to claim, in plain language.
ILOE is separate from your end of service gratuity. If you lose your job, your employer still owes you your gratuity and other dues. You can estimate those with our UAE Gratuity Calculator and UAE Final Settlement Calculator.
Who must join, and who is exempt
The scheme covers both UAE nationals and expat residents who work in:
- the private sector, on the mainland, and
- the federal government.
Most free zone employees have also been brought into the scheme. Employees in the DIFC and ADGM financial free zones work under their own employment laws, and their position has been treated differently. If you work in a free zone, check with your HR team or on the official ILOE site.
Exempt groups
The following people do not have to subscribe:
- Investors – people who own the company they work in.
- Domestic workers – such as housemaids, family drivers and nannies.
- Temporary contract workers.
- Juveniles – workers under 18.
- Retirees who receive a pension and have taken up a new job.
Some local government employees work under emirate-level HR laws. If you are one of them, ask your employer whether the federal scheme applies to you.
The legal basis of the ILOE scheme
The scheme rests on three main legal texts:
- Federal Decree-Law No. 13 of 2022 on Unemployment Insurance. This creates the scheme and sets the main rules.
- Cabinet Resolution No. 97 of 2022. This sets out the procedures, conditions and controls.
- Ministerial Resolution No. 604 of 2022, issued by MOHRE in November 2022. This covers how to subscribe, the fines and the role of employers.
The original deadline for people already working was 30 June 2023. It was later extended to 1 October 2023. Since January 2024, proof of ILOE subscription has been part of the process for issuing a mainland labour card. In 2025 the renewal option moved to a two-year policy. We checked for later changes up to October 2026 and found no change to the premium amounts, the 60% benefit or the caps.
ILOE premiums and VAT
There are two categories, and your basic salary decides which one you are in. Allowances such as housing and transport are not counted.
| Item | Category A | Category B |
|---|---|---|
| Basic salary | AED 16,000 or less | Above AED 16,000 |
| Premium per month (before VAT) | AED 5.00 | AED 10.00 |
| VAT at 5% per month | AED 0.25 | AED 0.50 |
| Premium per month with VAT | AED 5.25 | AED 10.50 |
| Premium per year with VAT | AED 63.00 | AED 126.00 |
| Two-year policy with VAT | AED 126.00 | AED 252.00 |
| Maximum monthly benefit | AED 10,000 | AED 20,000 |
The ILOE website quotes the premium as "AED 5 + VAT" and "AED 10 + VAT". VAT in the UAE is 5%, which gives the figures above. If you want to see how VAT works on other purchases, try our UAE VAT Calculator.
You can pay monthly, quarterly, every six months, yearly or for the whole policy at once. The ILOE site says that when you pay in instalments, the full VAT for the policy is added to the first payment. So your first payment is a little higher than the later ones.
The worker pays the premium, not the employer. Some employers choose to pay it for their staff as a benefit, but the law does not require them to.
How much the UAE unemployment insurance pays
If you qualify, the benefit is:
- 60% of your average basic salary over the six months before you lost your job,
- up to a cap of AED 10,000 a month (Category A) or AED 20,000 a month (Category B),
- paid for a maximum of three months per claim.
The ILOE website also says there is a lifetime limit of 12 monthly benefits in total across all claims during your working life in the UAE.
Conditions you must meet
- You have been subscribed for at least 12 months in a row, and your premiums are fully paid.
- You lost your job for a reason other than resignation.
- You were not dismissed for disciplinary reasons.
- There is no absconding (work absence) complaint against you.
- The claim is not fraudulent and the employer is not a fake company.
- The job loss was not caused by taking part in a strike or a non-peaceful protest.
- You are in the UAE when you claim.
- You claim within 30 days of losing your job, or of the end of a labour dispute about it.
When payments stop
Payments end when three months have been paid, when you start a new job, or when you leave the UAE, whichever comes first.
The formula step by step
Step 1: Find your category
Basic salary > AED 16,000 → Category B
Step 2: Premium with VAT
Category A: 5 × 1.05 = AED 5.25 · Category B: 10 × 1.05 = AED 10.50
Yearly cost = Monthly premium with VAT × 12
Step 3: Monthly benefit
Step 4: Total benefit for one claim
Worked examples
Each example gives the same results as the calculator when you enter the same figures.
Example 1: Sales executive on AED 8,000
Priya's basic salary is AED 8,000. She has paid ILOE for 14 months. Her company closes her department and ends her contract.
- Category: A (basic AED 16,000 or less)
- Premium: AED 5.25 a month with VAT, or AED 63.00 a year
- Benefit: 8,000 × 60% = AED 4,800.00 a month (under the AED 10,000 cap)
- Total for three months: AED 14,400.00
Example 2: Right on the line at AED 16,000
Hassan's basic salary is exactly AED 16,000. He has been subscribed for 24 months and is made redundant.
- Category: A (AED 16,000 is "or less")
- Benefit: 16,000 × 60% = AED 9,600.00 a month
- Total for three months: AED 28,800.00
Example 3: Senior manager where the cap applies
Elena's basic salary is AED 40,000. She is in Category B and has paid for 12 months. Her employer ends her contract in a restructuring.
- Premium: AED 10.50 a month with VAT, or AED 126.00 a year
- 60% of basic: AED 24,000.00
- Cap for Category B: AED 20,000.00, so the benefit is AED 20,000.00 a month
- Total for three months: AED 60,000.00
Example 4: Resigned after six months
Arjun earns a basic salary of AED 16,000.50, just over the line, so he is in Category B and pays AED 10.50 a month. He resigns after six months of subscription. He fails two conditions: he has not paid for 12 months, and he resigned. The calculator shows AED 0.00 and lists both reasons. If he had qualified, his benefit would have been AED 9,600.30 a month.
Example 5: A domestic worker
A housemaid earning AED 3,500 is exempt from the scheme because domestic workers are excluded. The calculator shows that she is not covered. Her end of service rights come from the domestic workers law instead.
Fines and penalties
| Breach | Fine | Notes |
|---|---|---|
| Not subscribing within four months of starting work (or of a change of status) | AED 400 | Set by Ministerial Resolution No. 604 of 2022 |
| Not paying premiums for more than three months after the due date | AED 200 | The policy can also be cancelled, and the 12-month count starts again |
Some official pages describe the non-payment fine differently, so check the amount shown in your MOHRE account. If a fine is not paid within three months, MOHRE can recover it by deducting it from your salary through the Wage Protection System, or from your end of service gratuity. You may also be unable to get a new work permit until the fine is paid. You can check and pay fines through the ILOE "Quick Pay" option on the MOHRE website or app.
Special cases
Commission-based workers
If your contract does not set a fixed basic salary, for example because you are paid mainly by commission, MOHRE lets you pick either category. Pick Category B if you want the higher cap.
Changing jobs
Your policy stays valid when you move to a new employer, as long as your category does not change. If a pay rise or a new job takes your basic salary above AED 16,000, update your category with the insurer. Otherwise any benefit will still be capped at the Category A limit.
Disputed termination
If you disagree with the reason for your dismissal and file a case with MOHRE or the courts, keep paying your premiums. You then have 30 days from the final decision to make your claim. The reason given in the decision will decide whether you qualify.
Leaving the UAE
The benefit is meant for people who stay in the UAE to look for work. If you leave the country, payments stop.
Top-up cover
The law allows insurers to offer extra private cover with higher benefits for a higher premium. That is optional and separate from the basic scheme shown in this calculator.
How ILOE fits with your gratuity and other dues
Many workers think the unemployment benefit replaces what the employer owes them. It does not. When your contract ends, you can receive money from two separate places, and each follows its own rules.
| Payment | Who pays | Main rule |
|---|---|---|
| End of service gratuity | Employer | 21 days of basic wage per year for the first five years, 30 days after that, once you have one year of service |
| Unused annual leave | Employer | Cash for leave days you earned and did not take |
| Notice pay | Employer | Due if the notice period was not worked or given |
| ILOE benefit | Insurer | 60% of basic salary up to the cap, for up to three months, only for involuntary job loss |
The ILOE benefit is paid on top of your gratuity and final settlement. Your employer cannot reduce your gratuity because you receive unemployment insurance. In the same way, the insurer does not reduce your benefit because you received a gratuity.
There is one link to keep in mind. Unpaid ILOE fines can be deducted from your end of service pay. So check that you have no fines outstanding before your last day, or the deduction may surprise you when you receive your settlement.
Think of ILOE as a short bridge. For a worker on AED 8,000 basic, the full three months gives AED 14,400. That covers part of your costs while you search, but it will not cover a long gap. Combine it with your gratuity, any savings and a clear job search plan, and remember that your visa grace period after cancellation is also limited.
Common mistakes
- Using total salary to pick the category. Only basic salary counts. Someone with a basic of AED 12,000 and a package of AED 25,000 is in Category A.
- Expecting a payout after resigning. Resignation is not covered at all.
- Letting the policy lapse. A gap in payments can cancel the policy and restart the 12-month count.
- Missing the 30-day window. If you wait too long to claim, the claim can be refused.
- Forgetting VAT. The real monthly cost is AED 5.25 or AED 10.50, not AED 5 or AED 10.
- Assuming the employer subscribed for you. The duty is on the worker. Check your status yourself.
- Not updating the category after a raise. If your basic salary passes AED 16,000, your cap stays at AED 10,000 until you switch.
How to subscribe and claim
To subscribe or renew
- Go to the official ILOE website or download the ILOE app.
- Choose your category and enter your Emirates ID and mobile number.
- Confirm with the one-time code sent by SMS.
- Check your details and the premium, then pay by card.
You can also subscribe or renew at some exchange houses and at MOHRE service centres such as Tasheel and Tawjeeh.
To claim
- Make sure your contract has ended and the reason is not resignation or discipline.
- Within 30 days, submit your claim on the ILOE website or app.
- Upload what is asked for, which usually includes your Emirates ID and proof of the end of your employment.
- The insurer reviews the claim. The official guidance says approved claims are paid within two weeks of the claim.
- Tell the insurer at once if you find a new job, because payments stop from that point.
For help, contact the ILOE call centre on 600 599 555, or MOHRE through its website, app or call centre on 600 590 000.
Practical tips
- Save your subscription certificate and payment receipts.
- Choose the two-year policy so you do not forget a renewal.
- Set a reminder 30 days before your policy ends.
- If you are worried about your job, check your subscription months now. You need 12 in a row.
- Plan your budget. Even at the cap, ILOE pays less than your full salary. Our UAE Salary Calculator can help you see your full pay breakdown.
Frequently asked questions
How much is unemployment insurance in the UAE?
AED 5 a month plus VAT if your basic salary is AED 16,000 or less (Category A), and AED 10 a month plus VAT if it is above AED 16,000 (Category B). With 5% VAT that is AED 63 or AED 126 a year.
How much will I get from ILOE if I lose my job?
60% of your average basic salary over the six months before you lost your job, up to AED 10,000 a month in Category A or AED 20,000 a month in Category B. It is paid for up to three months per claim.
Can I claim ILOE if I resign?
No. The scheme only pays when you lose your job for reasons other than resignation. Dismissal for disciplinary reasons is also not covered.
How long must I pay before I can claim?
You must have been subscribed and paying premiums for at least 12 months in a row before the job loss.
What is the fine for not subscribing to ILOE?
AED 400 if you do not subscribe within four months of starting work. Ministerial Resolution No. 604 of 2022 sets a separate AED 200 fine for not paying premiums for more than three months. Unpaid fines can be deducted from your salary or end of service pay, and can block a new work permit.
Who does not need to join the UAE unemployment insurance scheme?
Investors who own the company they work for, domestic workers, people on temporary contracts, workers under 18, and retirees who receive a pension and have taken a new job.
How soon must I claim after losing my job?
Within 30 days of the end of your job, or within 30 days of the end of a labour dispute about the termination if the case went to MOHRE or court.
Is VAT added to the ILOE premium?
Yes. The official premium is quoted as AED 5 or AED 10 plus VAT. At the UAE VAT rate of 5% that is AED 5.25 or AED 10.50 a month. If you pay in instalments, the ILOE site says the full VAT is added to the first payment.
Does ILOE stop if I find a new job?
Yes. Payments stop when you start a new job or leave the UAE. They also stop once three months have been paid on a claim.
Is there a lifetime limit on ILOE claims?
The ILOE website says the total paid over your working life in the UAE is limited to 12 monthly benefits across all claims.
Disclaimer
This UAE unemployment insurance calculator gives an estimate for general guidance only and is not legal or insurance advice. Every claim is decided by the insurer under the policy terms. Premiums, fines and procedures can change, so always confirm with the official ILOE website or MOHRE before you rely on a figure.
Sources and references
Federal Decree-Law No. 13 of 2022 on Unemployment Insurance; Cabinet Resolution No. 97 of 2022; Ministerial Resolution No. 604 of 2022; Ministerial Resolution No. 340 of 2023 (deadline extension). Official pages: ILOE – official scheme website; UAE Government portal – Unemployment insurance scheme; Dubai.ae – Involuntary Loss of Employment.