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Why 5% more companies in UAE are paying bonuses this year
Organisations are trying to reward people for doing very well at their job by paying a performance bonus rather than an overall salary increase
- PUBLISHED: Mon 9 Feb 2026, 5:55 PM
More UAE companies are paying bonuses this year compared to last year, although the proportion of very high bonus payouts is declining, according to a new study.
Released by global recruitment and HR advisory firm Cooper Fitch, the survey found that 77 per cent of UAE employers will pay out bonuses in 2026, compared to 72 per cent the previous year.
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Around 23 per cent of companies do not plan to pay bonuses to employees this year for their 2025 performance, down from 28 per cent in the previous year, according to the Bonus Report 2026 released on Monday.
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“We've seen a five per cent increase in the amount of bonuses paid last year to 77 per cent, which is quite significant. 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,” said Trefor Murphy, CEO and founder of Cooper Fitch.
For individual contributors, the study found that bonus outcomes were more conservative and closely linked to role scarcity and business impact. While 41 per cent of organisations awarded bonuses equivalent to one to two months’ basic salary, smaller bonuses and non-payouts remained common, with 25 per cent reporting no bonus.
Why are companies paying more bonuses?
Nearly one-fourth of organisations — 23 per cent — reported no planned bonus payout, underscoring continued cost discipline and performance-based differentiation.
Bonuses equivalent to one to two months’ basic salary remained the most common outcome (36 per cent), reinforcing their position as the prevailing benchmark across most sectors.
Overall, 26 per cent of companies reported bonuses ranging from three to five months’ salary, highlighting selective reward strategies rather than broad-based expansion.
“The biggest bonus payout is 1-2 months' salary, representing 36 per cent of all respondents. And only seven per cent receiving six month or more salary bonus. 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,” Murphy told Khaleej Times during an interview on Monday.
Commenting on the factors behind the trend, he said that 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 for that.
“The whole idea of high-performance bonuses is kind of ingrained into employees in the region. This includes accountants, marketing executives, social media people, and the operations team. Secondly, salary increases in the last few years have certainly slowed down. Organisations are trying to reward people for doing very well at their job by paying a performance bonus rather than an overall salary increase, which one could argue is reasonably fair, but maybe it's a balanced approach to these things,” added Murphy.
Sectors and roles
Banking, financial services and insurance led the market at the top end, with 13 per cent of firms awarding bonuses of six months’ basic salary or more — the highest across all sectors.
In the three-to-five-month salary range, media and entertainment recorded the strongest concentration, with 38 per cent of employers awarding bonuses at this level. FMCG and consumer goods (35 per cent), as well as energy, utilities and renewables (28 per cent), also showed solid mid-tier bonus activity, underscoring the role of performance-linked incentives in commercially driven environments.
Among other sectors, marketing, advertising and public relations reported the highest incidence of no bonus payout at 53 per cent. No-bonus outcomes were also recorded in media and entertainment (43 per cent), retail, e-commerce and luxury goods (43 per cent), heavy industry and manufacturing (33 per cent), and mining, metals and natural resources (33 per cent).
Across most industries, one to two months’ basic salary remained the dominant benchmark.
“Organisations are increasingly distinguishing between transformation-critical specialists and broader delivery roles, especially in sectors such as aviation, government, media, and retail, where fixed pay, budget limits, and margin constraints influence reward decisions,” it said.
