More employers in the UAE are awarding bonuses this year as organisations increasingly link compensation to performance rather than permanent salary increases. According to a new survey by Cooper Fitch, about 77% of companies plan to pay bonuses for 2025 performance, up from 72% the previous year, signalling improving business confidence alongside continued cost discipline.
Bonus payouts rise but remain moderate
Although a higher share of companies is paying bonuses, most payouts remain conservative in size. The survey shows that bonuses equivalent to one to two months of basic salary continue to be the most common outcome across industries, while a smaller proportion of organisations provide rewards in the three-to-five-month range. Only a limited number of firms are offering bonuses of six months or more, indicating that companies are rewarding performance without significantly expanding compensation budgets.
Shift from salary hikes to performance rewards
Explaining the trend, Trefor Murphy noted that UAE employers are increasingly favouring variable incentives over fixed pay rises as salary growth slows across sectors. This approach allows organisations to recognise strong individual and business performance while maintaining financial flexibility, reflecting a balanced reward strategy shaped by market uncertainty and evolving workforce expectations.
Sector-wise variation in bonus outcomes
Bonus distribution varies widely by industry. Banking, financial services, and insurance lead in higher-value payouts, while media, FMCG, and energy sectors show solid mid-tier bonus activity. In contrast, marketing, retail, heavy industry, and mining report relatively higher instances of no-bonus outcomes, highlighting the uneven pace of recovery and profitability across sectors. Despite these differences, the one-to-two-month bonus benchmark remains dominant across most industries.
Broader compensation outlook in the UAE
The findings underline a structural shift in how companies across the UAE design compensation frameworks, with greater emphasis on performance differentiation, role criticality, and budget control. As businesses navigate economic uncertainty while competing for skilled talent, flexible bonus-led reward models are likely to remain a defining feature of the UAE employment landscape in the near term.
