Money in the UAE is refreshingly simple. The country runs on one currency, the UAE dirham (AED), it is pegged to the US dollar so prices stay steady, and cards work almost everywhere you go. There is no separate Dubai currency; the same notes and coins are legal tender across all seven emirates, from the malls of Dubai to the corniche in Abu Dhabi and the mountain roads of Ras Al Khaimah.
For a visitor the practical shape of it is quick to learn: tap a card or phone for most things, keep a small float of cash for taxis, tips and the souks, choose to be charged in dirhams whenever a terminal asks, and reclaim the modest 5% VAT on bigger purchases as you fly home. This guide walks through each of those in turn.
The UAE dirham
The currency is the UAE dirham, written AED and shown in shops as Dh or the Arabic د.إ. One dirham divides into 100 fils, though fils matter only for the smallest change. The dirham has been the national currency since 1973, replacing the earlier Gulf and Qatar-Dubai riyals, and it is issued by the Central Bank of the UAE in Abu Dhabi.
Its defining feature is the peg to the US dollar at 3.6725, held steady for decades. That fixed rate means a US dollar is always worth almost exactly Dh 3.67, so American visitors can convert prices in their head with ease and nobody worries about the rate swinging during a trip. The pound, by contrast, floats against the dirham, and one pound buys roughly AED 4.5 to 4.7, so a good rule of thumb for British travellers is to knock a little under a half off any dirham figure to reach a rough pound value.
Banknotes come in Dh 5, 10, 20, 50, 100, 200, 500 and 1000, each a different colour and size, with the higher values used mainly for rent, gold and big-ticket buys. Coins cover 1 dirham, 50 fils and 25 fils; smaller fils coins exist in theory but you will rarely see them, and totals are usually rounded to the nearest 25 fils.
Cards or cash?
The UAE is close to a cashless society in its cities. Contactless cards work almost everywhere, and Apple Pay and Google Pay are accepted just as widely, in malls, restaurants, supermarkets, petrol stations, on the Dubai Metro and in most taxis. Visa and Mastercard are taken universally; American Express less so, though still common in hotels and larger venues. For the bulk of a trip you can tap your way through the day and barely touch a note.
Cash still earns its place, though. Keep a small float of dirhams for the things plastic does not always reach: taxi drivers who prefer cash, souk stalls and independent traders, tips, parking meters, mosque donations and tiny corner shops. Small notes, Dh 5, 10 and 20, are the useful ones, since a trader with a Dh 500 note and a Dh 15 sale will struggle for change. When you plan a trip, our budget guide sets out what day-to-day spending actually looks like across the emirates.
Bargaining in the souks
Fixed prices rule the malls and chain stores, but the traditional souks run on negotiation, and this is where a wallet of cash comes into its own. In the gold, spice and textile souks of Deira and old Dubai, and in Sharjah’s Blue Souk, the first price is an opening bid rather than the real one. Open below it, stay friendly, and expect to meet somewhere in the middle; walking away calmly often brings the number down further.
Gold is sold by weight at a daily rate displayed openly, so the haggling there is over the making charge rather than the metal itself. For textiles, pashminas, lamps and souvenirs there is more room to move. None of this applies in supermarkets, pharmacies or branded shops, where the ticket price is the price. For a sense of where the souks sit alongside the city’s other sights, see our Dubai destination guide.
ATMs and money changers
ATMs are everywhere, in airport arrivals halls, malls, metro stations, hotel lobbies and petrol forecourts, and nearly all accept foreign Visa and Mastercard with English-language menus. Withdrawing dirhams from a machine usually gives a fair rate, close to the peg, though your own bank may add a foreign-withdrawal fee, so it pays to take out a reasonable sum each time rather than making many small withdrawals. Notify your bank before you travel so an overseas tap or withdrawal is not flagged and frozen.
For changing physical cash, the UAE’s money changers often beat the banks. Well-known chains such as Al Ansari Exchange and UAE Exchange have branches in every mall and high street, post their rates clearly and charge little or no commission, frequently giving a better deal than a bank counter or an airport bureau. Compare the rate against the roughly Dh 3.67 to the dollar peg and you will quickly see who is fair.
Tipping in the UAE
Tipping is not obligatory in the UAE, but it is appreciated and has become a normal courtesy in tourist areas. The first thing to check on any restaurant bill is whether a 10% service charge has already been added, which is common; if it has, you have effectively tipped, and anything more is at your discretion. Where no service charge appears and the meal was good, another 10% or simply rounding up is a generous gesture.
Elsewhere the customs are light and cash-based. Round taxi fares up to the nearest few dirhams rather than waiting for coins. A few dirhams suits a porter carrying bags, a valet fetching a car, or housekeeping in a hotel. Petrol-station attendants, who still pump your fuel, and supermarket baggers are often given a dirham or two as well. None of it is expected, but small notes make these gestures easy.
VAT and the tourist refund
The UAE introduced VAT at 5% in 2018, and it remains one of the lowest rates in the world. It applies to most goods and services and is already included in the shelf price, so the figure you see is the figure you pay. On a restaurant bill you may see VAT listed separately alongside a municipality fee and the service charge, which is why the total can edge above the menu prices.
Visitors can reclaim the VAT on eligible purchases through the Planet tax-free scheme. Ask the shop assistant for a tax-free tag at the till and show your passport; the purchase is then registered digitally. When you leave the country, validate your purchases at the airport before checking in, using the self-service kiosks or a Planet desk, and collect your refund in cash or back to your card. The goods should be unused and taken out with you, and there is a minimum spend per shop, so it suits larger buys such as gold, electronics or designer items rather than a coffee.
Quick conversion reference
Because the dirham is pegged to the dollar, dollar values are steady; pound values move a little, so treat them as rough guides.
| Dirhams (AED) | Approx US dollars | Approx pounds |
|---|---|---|
| Dh 5 | ~$1.35 | ~£1.10 |
| Dh 10 | ~$2.70 | ~£2.15 |
| Dh 20 | ~$5.45 | ~£4.30 |
| Dh 50 | ~$13.60 | ~£10.80 |
| Dh 100 | ~$27.20 | ~£21.60 |
| Dh 200 | ~$54.50 | ~£43.20 |
| Dh 500 | ~$136 | ~£108 |
| Dh 1000 | ~$272 | ~£216 |
The dollar column follows the fixed 3.6725 peg; the pound column assumes roughly AED 4.63 to the pound and will drift as the rate moves.
Handling money in the UAE really comes down to a few habits: pay by card or phone for most things, carry small notes for taxis, tips and the souks, always choose dirhams at a terminal, and keep your receipts if you want the VAT back at the airport. For the next steps in planning, read our guides to getting around and to Emirati food and where to eat, and use the budget guide to turn all of this into a realistic daily spend.