Like other GCC member states, Dubai and the Emirates in general are internationally famous for not levying any taxes on personal income. If you are planning to live and work in Dubai, you may be looking forward to receiving your first tax-free salary.
However, this does not necessarily mean that life in Dubai is going to be easy on your wallet. Below, you’ll find a brief overview with regard to the cost of living in Dubai. Once you know what to expect in terms of living expenses, you have a good starting point for your salary negotiations.
The local currency (dirham) is pegged to the US dollar at a fixed rate, by the way. 3.67 dirham equals 1 US dollar. This is helpful to know when you consider the local cost of living in Dubai.
Accommodation will probably be the biggest individual item in your household budget. Most rental contracts in Dubai are valid for one year, and they are renewed annually. Please note that the annual rent is often due upfront. So you might have to dip into your savings to cover the total cost.
If your rent a two-bedroom apartment in one of Dubai’s popular expat neighborhoods, you need to spend about AED 100,000-150,000 per year. In other areas, you’ll find cheaper accommodation, whereas family villas geared at expatriates are obviously more expensive.
Rental costs normally do not include utility bills. To pay for electricity and water consumption, you need to expend an average AED 1,200 per month (again, for a 2-bedroom apartment). In Dubai’s hot summer months from May to August, costs are likely to be a good deal higher, as you’ll use the air conditioning a lot.
Lastly, expats with a lucrative job can easily afford domestic staff. Hiring one person (e.g. a nanny or maid) for a full-time position will cost you circa AED 3,000 in wages. If you only need occasional help at home, you can hire, for example, a cleaner for about AED 30 per hour.
When it comes to groceries and food, the cost of living in Dubai depends a lot on your shopping preferences. You can save quite a bit of money if you buy local produce rather than international brands. A single expat spends anything between AED 250 and AED 1,000 on groceries per week.
If you want to eat out once in a while, there are several options. The cheapest is buying some Shawarma as an inexpensive snack for five dirham. In comparison, prices for a cappuccino or latte from a café are a veritable luxury, at AED 15-20!
In a mall’s food court, you can have a full meal with soft drinks for less than AED 100, but for a meal at a restaurants (including alcohol), you have to spend up to AED 500 per person.
Dubai has a fairly good public transport system – probably the best in the Emirates and the Gulf region. Nonetheless, life is a lot easier if you have a car. If you want to avoid the expenses and hassle of importing your own, you can simply lease one upon arrival.
Leasing a normal mid-range car will cost a bit less than AED 2,000 a month, fuel and insurance included. Unsurprisingly, fuel is not expensive in Dubai. You can get a liter of gas for under two dirham.
In case you don’t like driving, you may be relieved to hear that public transportation in Dubai isn’t costly, either. It won’t add that much to your cost of living. You could buy a day pass for Dubai’s metro, city buses, and water taxis for barely AED 15, and a short trip by taxi sets you back by AED 10.
Not only do you not have to tax your personal income in Dubai, but expats also needn’t make any contributions to the UAE’s social security and pension fund. On the one hand, this helps to keep down your cost of living in Dubai. On the other hand, you need to put aside some money for retirement provisions.
Talk to your social security office back home, as well as an independent financial advisor, and ask how living in Dubai might affect your personal finances during your retirement years. Moreover, get in touch with your prospective employer to enquire about company health insurance plans. Healthcare in Dubai is only free for UAE nationals.
A basic consultation with a dentist or general practitioner is pretty affordable (circa AED 500). However, this does not include any extra tests or treatment. In case of a serious illness or accident, you need to have a good health insurance plan to make the most of Dubai’s private healthcare facilities.
Schools for expat children add quite a heavy financial burden to the cost of living in Dubai. To cite but one example: The American School in Dubai requires AED 105,000 in yearly tuition fees.
Further costs, for example concerning registration, textbooks, or extra-curricular activities, aren’t included in the school fees above. However, fees can be much lower if your company owns a so-called "corporate seat" at one of the international schools, reserving a place for the children of employees.
Last but not least, there’s no limit on how much you could spend on designer clothing or leisure activities in Dubai. How this will influence your cost of living in Dubai is up to you and your credit card!
We do our best to keep this article up to date. However, we cannot guarantee that the information provided is always current or complete.