US Citizens Working in United Arab Emirates
See what you actually take home after US and United Arab Emirates taxes — whether you're already working abroad or planning a move.
Here's what matters most for US citizens working in United Arab Emirates:
- •UAE has zero income tax, meaning you only pay US taxes (after FEIE)
- •FEIE can exclude up to ~$126,500 from US taxation if you meet the physical presence test
- •Cost of living varies by city, but housing can be expensive in major cities
- •No double taxation - you only pay US taxes on income above FEIE threshold
Who taxes you?
As a US citizen working in the UAE, you're subject to US taxation on worldwide income, but the UAE has zero income tax. The Foreign Earned Income Exclusion (FEIE) can exclude up to approximately $126,500 of foreign earned income from US taxation if you meet the 330-day physical presence test. This means if your income is below the FEIE threshold, you may pay no taxes at all. For income above the threshold, you'll only pay US federal taxes (no state taxes if you establish non-residency).
Common pitfalls
- Not meeting the 330-day physical presence test disqualifies you from FEIE
- Housing costs in major cities can be high, offsetting some tax savings
- State tax obligations may persist if you maintain US state residency
- Currency fluctuations between USD and AED can impact your effective income
- Some employers structure compensation to maximize tax benefits
Frequently asked questions
Yes. US citizens must file US tax returns regardless of where they live. However, if your income is below the FEIE threshold (~$126,500) and you meet the physical presence test, you may not owe any US taxes.
The UAE has zero income tax. You only pay US federal taxes on income above the FEIE threshold. This makes the UAE one of the most tax-efficient destinations for US expats.
No. Since the UAE has zero income tax, there's no double taxation. You only pay US taxes on income above the FEIE threshold.
Cost of living in the UAE varies by city. Housing can be expensive in major cities like Dubai and Abu Dhabi, but other expenses like groceries and dining are reasonable. Your purchasing power is typically higher than in high-tax countries.
Official resources
Primary sources:
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