77% of UAE firms to pay bonuses in 2026, but biggest payouts shrink

A new survey by global recruitment and HR advisory firm Cooper Fitch shows that 77 per cent of UAE employers will pay bonuses in 2026 for 2025 performance, up from 72 per cent a year earlier. At the same time, the share of organisations opting not to pay any bonus has fallen to 23 per cent, compared to 28 per cent previously.

The findings, published in the firm’s Bonus Report 2026, point to a broader distribution of payouts across the market — but with tighter control at the top end.

“We’ve seen a five per cent increase in the amount of bonuses paid last year to 77 per cent, which is quite significant,” said Trefor Murphy, CEO and founder of Cooper Fitch. “If we look at the other countries, there are only marginal increases. The UAE saw the biggest improvement across GCC countries in terms of bonus payouts.”

Mid-range bonuses dominate

For most employees, bonuses remain moderate and closely tied to role scarcity and measurable business impact. The most common payout continues to be between one and two months’ basic salary. 

Around 36 per cent of companies reported awarding bonuses at this level, making it the prevailing benchmark across sectors. A further 26 per cent of companies paid between three and five months’ salary, reflecting selective reward strategies rather than broad-based generosity. Only seven per cent awarded bonuses of six months’ salary or more.

“The biggest bonus payout is one to two months’ salary, representing 36 per cent of all respondents,” Murphy said. “Overall, more people are paying bonuses to their teams, but the percentage of very high bonuses is reducing. Firms still pay higher bonuses in the UAE than in any of the other 11 countries that we operate in.”

For individual contributors, payouts were more conservative. While 41 per cent of organisations awarded bonuses equivalent to one to two months’ salary, 25 per cent reported no bonus at all for these roles.

Performance culture and cost discipline

The shift reflects a balancing act. On one hand, companies are responding to employee expectations in a high-performance market. On the other, they are exercising cost discipline amid slower salary growth.

“When things are going well, employees in the UAE expect to be rewarded well. And when things don’t go well, they don’t expect to be rewarded,” Murphy said, noting that performance-linked bonuses are deeply ingrained across professions, from finance and marketing to operations and social media.

With base salary increases moderating over the past few years, many employers are choosing to reward top performers through variable pay instead of committing to permanent fixed-cost rises.

“Organisations are trying to reward people for doing very well at their job by paying a performance bonus rather than an overall salary increase,” Murphy added. “It’s a balanced approach.”

Sector-wise winners and laggards

The gap between sectors is pronounced, as banking, financial services and insurance (BFSI) lead at the top end, with 13 per cent of firms awarding bonuses of six months’ basic salary or more, the highest across industries.

Media and entertainment recorded the strongest concentration in the three-to-five-month range, with 38 per cent of employers awarding bonuses at that level. FMCG and consumer goods (35 per cent), along with energy, utilities and renewables (28 per cent), also showed solid mid-tier activity.

At the other end of the spectrum, marketing, advertising and public relations reported the highest incidence of no bonus payouts at 53 per cent. 

No-bonus outcomes were also significant in media and entertainment (43 per cent), retail and luxury (43 per cent), heavy industry and manufacturing (33 per cent), and mining and metals (33 per cent).

Across most industries, however, one to two months’ salary remains the dominant benchmark. The report noted that organisations are increasingly differentiating between transformation-critical specialists and broader delivery roles, particularly in sectors such as aviation, government, media and retail, where fixed pay structures and margin pressures influence reward decisions.

The bonus uptick comes amid rising (often mismatched) salary expectations across the Gulf, reflected in findings by Hays Middle East. While 58 per cent of professionals received a pay rise in 2025 (up from 51 per cent a year earlier), most increases were modest at 2.5 to 5 per cent, even as 12 per cent secured jumps above 20 per cent. Yet six in ten say their salaries still do not reflect their responsibilities, and 78 per cent expect a raise in 2026, with nearly a quarter anticipating more than 20 per cent. 

Employers, though optimistic, remain cautious with 70 per cent planning salary increases in 2026, largely capped at 5 per cent. Hiring remains strong, with two-thirds of firms expanding headcount in 2025, but 90 per cent report skills shortages, and retention pressures are mounting, with 27 per cent changing jobs last year.

That pressure is translating directly into job mobility, as reflected in the report by Fletcher Piccolo. Salary stagnation and rising living costs are pushing professionals to look elsewhere, with an overwhelming 98 per cent of UAE employees open to changing roles in 2026 in pursuit of better pay and career progression. 

The shift follows a year in which 82 per cent of employers froze salaries and 51 per cent of professionals received no bonus, while most projected pay rises across the Gulf remain capped at 5 per cent.