Living in Dubai as an expat comes with many financial perks, such as zero personal income tax, strong job opportunities, and higher earning potential. However, the city’s high cost of living and hidden expenses often catch expats off guard. This guide draws on insights from our friends at Pacific Prime to highlight five hidden expenses to help you better prepare for the true cost of living in Dubai.
1. Lifestyle Inflation
Dubai offers a lifestyle unlike any other, with 24/7 access to luxury dining, shopping, and entertainment. While exciting, these experiences often come with premium pricing, and the costs can add up quickly without you realizing it.
To avoid overspending, expats should track their expenses, set a realistic budget, and prioritize savings to maintain and grow their financial stability while living in Dubai.
2. Transportation Expenses
Whether you plan to buy a car or rely on public transport, transport costs in Dubai may surprise you. While petrol is relatively affordable, car ownership comes with upfront fees such as tax and registration, as well as ongoing costs such as parking, tolls (Salik), and maintenance.
Public transport can be slow or limited during off-peak hours, which often pushes residents to rely on taxis or ride-hailing services. As these fares add up, your monthly transport costs rise.
3. Utilities and Rental Deposits
Utilities, including electricity and water (DEWA), in Dubai, can be surprisingly high, especially during the summer months. With temperatures regularly exceeding 40°C, air conditioning becomes a necessity rather than a luxury, causing bills to rise faster than expected.
Also, to secure a property, you must pay a security deposit equal to 5% of the annual rent for unfurnished property and 10% for furnished property. Other expenses include agency fees, DEWA charges for activating your connection, and Ejari fees.
4. International School Fees
For those moving with families, school fees are one of the largest expenses. Annual tuitions for international schools, offering British, American, and IB curricula, typically range from AED 12,500 to AED 65,000 (USD $3,400–$17,700), depending on the student’s grade and the school’s reputation.
Other fees that parents should budget for include admission, transportation, uniforms, textbooks, and extracurricular activities.
5. Health Insurance Gaps
While Dubai requires all residents to have DHA-compliant health insurance, which can be company-sponsored or self-purchased, the plan may not adequately cover the high costs of private healthcare in the emirate.
Many expats underestimate the true cost of medical care in Dubai. In the event of an unexpected illness or accident, patients must pay substantial out-of-pocket expenses.
Budgeting Strategies for Expats Living in Dubai
Given the high cost of living in Dubai and its hidden expenses, it’s important to stay on top of your finances. A few simple habits can go a long way in helping you avoid money stress and stay in control:
- Track your spending monthly: Monitor both fixed and lifestyle expenses to spot overspending.
- Negotiate your employee benefits: Ask about housing, school allowances, or better health insurance.
- Build an emergency fund: Save 3–6 months of expenses for unexpected costs.
- Review your insurance: Make sure your plan offers enough coverage to avoid high out-of-pocket bills.
Final Word: Plan Ahead
Dubai offers exciting opportunities, but smart planning is key to avoiding financial stress. By understanding these hidden costs, you can budget and protect your finances, especially in healthcare, where cutting corners can become costly.
For personalized guidance on health insurance in Dubai, contact Pacific Prime to explore DHA-compliant and international plans. Their team can help you compare options and find coverage that truly fits your needs.
