Are UAE employers now offering better housing, schooling allowances to staff?

Dubai: Living in the UAE comes with high costs. Rent cheques can feel like a year’s salary, and school fees rise every term.

For many residents, housing and education allowances ease the burden—but Mercer’s 2025 Middle East Housing and Schooling Report shows these benefits are no longer just perks. They are becoming key tools for employers competing to attract and retain top talent.

So understanding these benefits can not only ease financial pressure for UAE resident, it can help reduce stress, and even shape career choices. Here are some takeaways for UAE residents on how housing and schooling costs are now central to both quality of life and employer strategies.

Housing allowances widespread

As per the report, about 70% of UAE employers still provide a separate housing allowance, while 25% include it within a consolidated salary. The rest offer total cash packages.

With rents continuing to climb, these allowances remain critical to keeping employees financially secure. What this means for most UAE residents is that they have at least some support with rent or mortgage payments, which can significantly ease financial pressure.

Rent: Upfront support matters

In a market where landlords often demand a year’s rent in advance, Mercer found 52% of employers now provide housing allowances upfront instead of monthly.

This gives employees breathing room at the start of the year and reduces the need for loans or dipping into savings. If your employer does this, it can prevent you from dipping into savings or taking short-term loans, especially at the start of the year.

Allowance reviews aren’t automatic

From 2024 to 2025, housing allowances rose just 4% on average. Most companies review their policy only when needed—59% take this approach—while just 20% review annually.

Schooling benefits follow a similar trend. Only 19% of organizations updated their education support in 2025, with competitiveness (72%) and rising tuition fees (44%) driving the changes.

How does it affect you? If rents in your area spike, your allowance may not keep pace. Check with HR whether your allowance is benchmarked to market trends to avoid unexpected out-of-pocket expenses.

Schooling benefits affects choices

Nearly 9 in 10 UAE employers provide schooling coverage. Policies often differ by seniority or role—36% of organizations apply the same benefits across all staff, while 64% differentiate.

Only 19% of companies adjusted their schooling policies in 2025, usually due to competitiveness (72%) or rising tuition costs (44%).

For families in the UAE, understanding the coverage is vital to planning long-term education and avoiding budget surprises.

Why it matters

Andrew El Zein, Mercer’s UAE Career Products Leader, says housing and schooling benefits now play a central role in recruitment and retention:
"Top talent is at a premium in the UAE. Allowances and benefits now influence outcomes at every stage of hiring and retention."

"When housing and schooling policies are market aligned, clear and communicated well, it provides organizations an advantage in their talent attraction and retention strategies," Zein added.

"This is about building a sharper employee value proposition that enables organizations to acquire the right talent for their growth ambitions at a time when attracting top talent is a business imperative."

Mercer’s findings underline that benefits are no longer just about easing day-to-day expenses. They are a core part of an employer’s value proposition, shaping financial stability, work-life balance, and career decisions for thousands of residents.

Key takeaways: 4 simple steps you can take as a UAE resident

1. Ask if your housing allowance can be paid upfront to manage rent obligations.

2. Check how frequently your housing allowance is reviewed and if it’s linked to market trends.

3. Understand your schooling coverage—what’s included, what isn’t, and whether there are tiered differences.

4. Use this information to plan your finances, school choices, and long-term family budget with confidence.