Monthly salary processing
Gross-to-net calculations, allowances, overtime, unpaid leave and deductions for every employee.
Payroll Services in Dubai & the UAE – WPS-Compliant Payroll Outsourcing
Payroll outsourcing in the UAE means a specialist calculates salaries, deductions, leave and end-of-service gratuity each month and prepares the WPS salary file your bank uses to pay staff. Since 1 June 2026, MOHRE treats salaries as due on the first day of each month with no grace period. SGA World runs payroll for mainland and free zone companies and posts it to your accounts.
- Ministry of Economy and Tourism approved auditor
- 500+ clients
- Dubai & Abu Dhabi
UAE payroll looks simple because there is no personal income tax, but it is tightly regulated. Salaries for most private-sector staff must be paid through the Wage Protection System (WPS), end-of-service gratuity and leave must follow the Labour Law, Emirati staff need pension contributions, and since 1 June 2026 MOHRE expects salaries on the first day of each month.
SGA World runs payroll every month for mainland and free zone companies in Dubai and Abu Dhabi: salary calculations, the WPS salary file, payslips, gratuity and leave accruals, and the payroll entries in your books. You approve; your bank pays.
- Day of the month salaries are now due
- 1st
- Electronic salary system run by MOHRE
- WPS
- Gratuity per year of service
- 21/30 days
- Personal income tax on salaries
- 0%
At a glance
UAE Payroll: Key Facts
- Due date: from 1 June 2026, salaries are due on the 1st of each month, with no 15-day grace period.
- WPS: mainland companies and in-scope free zones such as JAFZA and DMCC pay through WPS.
- Gratuity: 21 days' basic pay per year for the first 5 years, 30 days after that, capped at two years' pay.
- Leave: 30 days of annual leave a year after one year of service.
- Pension: UAE nationals in GPSSA: 15% employer and 11% employee for those registered from 31 October 2023.
- Tax: no income tax on salaries, but payroll is a key cost in your corporate tax return.
The basics
What Are Payroll Services?
Payroll services cover everything between agreeing an employee's package and the salary reaching their bank account. Each month that means:
- Collecting changes: new joiners, leavers, salary revisions, leave, overtime, allowances and deductions.
- Calculating pay: gross to net salary for every employee, including pro-rata pay for part months.
- Statutory items: GPSSA pension for Emirati staff, and gratuity and leave accruals for everyone.
- Paying staff: preparing the Salary Information File (SIF) for WPS, which your bank or exchange house uses to pay salaries.
- Payslips and records: payslips for every employee and payroll reports for management.
- Accounting: posting salaries, accruals and gratuity provisions to the general ledger.
With outsourced payroll, a specialist does the calculations and paperwork; you approve the payroll and release the payment. Your payroll data stays confidential and is shared only with the people you authorise.
Scope of work
What Does Our Payroll Service Include?
WPS salary file (SIF)
Salary Information File prepared in your bank's or exchange house's format, ready for you to approve.
Payslips
Clear payslips showing every component of pay, issued to each employee each month.
Leave and attendance
Annual, sick and other leave tracked against Labour Law entitlements and reflected in pay.
Gratuity and final settlements
End-of-service gratuity accrued monthly and final settlements calculated when staff leave.
Payroll accounting
Journal entries, accruals and gratuity provisions posted to your books and reconciled.
New in 2026
What Changed in UAE Salary Payment Rules in June 2026?
A new MOHRE ministerial resolution, effective 1 June 2026, tightened the Wage Protection System for private-sector employers registered with MOHRE:
- Salaries are due on the first day of each month. The previous 15-day grace period has gone, so a payment after the due date is late.
- The 85% test. An employer is treated as compliant only if at least 85% of total wages are paid on time and each employee receives at least 85% of their salary, after lawful deductions.
- Escalating enforcement. MOHRE monitors WPS automatically: alerts in the first days, suspension of new work permits from about day 5, administrative fines and possible downgrading of the company from about day 11, and labour complaints, wage enforcement and referral to prosecution for longer or repeated delays.
The rules apply to mainland companies and to free zones that use WPS, including the Jebel Ali Free Zone and DMCC. In practice the payroll must now be calculated, approved and uploaded before month end. We build the monthly timetable around that deadline.
Labour Law
What Must UAE Payroll Calculate Under the Labour Law?
Federal Decree-Law No. 33 of 2021 on labour relations and its executive regulations set the entitlements that payroll must reflect.
- Annual leave
- 30 days a year after one year of service; 2 days a month after six months.
- Sick leave
- Up to 90 days a year after probation: 15 days full pay, 30 days half pay, 45 days unpaid.
- Maternity and parental leave
- 60 days maternity leave (45 days full pay, 15 days half pay) and 5 days paid parental leave.
- Overtime
- At least 25% extra on the basic wage; 50% for work between 10 pm and 4 am or on a rest day.
- End-of-service gratuity
- 21 days of basic wage per year for the first five years, 30 days per year after that; total capped at two years' wage.
- Final settlement
- Wages and gratuity due to a leaving employee must be paid within 14 days of the contract ending.
- Deductions
- Limited by the Labour Law; total deductions generally cannot exceed 50% of the wage.
Gratuity is calculated on the last basic wage, not total salary, which is why the basic and allowance split in each contract matters.
Who pays what
Which Payroll Contributions Apply to Which Employees?
There is no income tax or social security for most expatriate employees, but several schemes depend on nationality and location.
| Scheme | UAE nationals | Expatriates | Who manages it |
|---|---|---|---|
| GPSSA pension (private sector) | Yes | No | Employer deducts and pays |
| End-of-service gratuity | No | Yes | Employer accrues and pays on exit |
| ILOE unemployment insurance | Yes | Yes | Employee subscribes; employers often check |
| Mandatory health insurance | Yes | Yes | Employer arranges |
| DIFC DEWS savings plan (DIFC only) | No | Yes | Employer contributes monthly |
| Personal income tax | No | No | Not applicable |
GPSSA rates for Emiratis registered from 31 October 2023 are 15% employer and 11% employee, with a government contribution of 2.5% for salaries below AED 20,000. GCC nationals are covered under their home country's pension scheme.
Monthly cycle
How Does Our Monthly Payroll Process Work?
Step01
Changes collected
By the cut-off date you send joiners, leavers, salary changes, leave, overtime and deductions.
Step02
Payroll calculated
We calculate gross-to-net pay, pension and accruals for every employee and check them against last month.
Step03
Your approval
You receive a payroll summary and variance report to review and approve.
Step04
WPS file prepared
We prepare the Salary Information File in your bank's format for you to upload and release.
Step05
Payslips issued
Each employee receives a payslip once salaries are paid.
Step06
Books updated
Payroll journals, gratuity and leave provisions are posted and reconciled to the bank payment.
Final settlements
How Is End-of-Service Gratuity Calculated? A Worked Example
An employee leaves after 7 years with a last basic salary of AED 10,000 a month (total salary AED 16,000).
Daily basic wage
- Calculation
- AED 10,000 × 12 ÷ 365
- Result
- AED 328.77
First 5 years
- Calculation
- 5 × 21 days × AED 328.77
- Result
- AED 34,520.55
Next 2 years
- Calculation
- 2 × 30 days × AED 328.77
- Result
- AED 19,726.03
Total gratuity
- Calculation
- Below the two-year wage cap
- Result
- AED 54,246.58
Allowances such as housing and transport are excluded because gratuity uses the basic wage. Unpaid leave and part years are pro-rated; the final settlement also includes unpaid salary and accrued leave.
Payroll desk
Pay Your Team Correctly and On Time, Every Month
We calculate payroll, prepare the WPS file and issue payslips to a fixed monthly timetable, so salaries reach your staff by the 1st and your books stay up to date.
What you get
- Monthly payroll calculated and checked
- WPS salary file ready before the due date
- Payslips for every employee
- Gratuity and leave accruals
- Payroll posted to your accounts
By employer type
How Does Payroll Differ for Your Type of Company?
The core payroll is the same, but location and workforce change the details.
Mainland companies
- Registered with MOHRE and paying through WPS
- Subject to the 1st-of-month salary rule and MOHRE enforcement
- Emiratisation targets for companies of 50 or more employees, and for some smaller companies in specified sectors
- Work permits and labour contracts issued through MOHRE
Free zone companies
- JAFZA and DMCC companies are within the WPS rules
- Other free zones set their own employment and salary rules, though the Labour Law's gratuity and leave rules generally apply
- Visas and contracts are issued by the free zone authority
- QFZP companies need adequate staff in the zone, so payroll records support substance
DIFC and ADGM companies
- Have their own employment laws, separate from the federal Labour Law
- DIFC employers contribute to the DEWS savings plan instead of paying gratuity
- ADGM has its own end-of-service rules and options
- Payroll calculations follow the relevant authority's regulations
Employers of UAE nationals
- Monthly GPSSA pension contributions deducted and paid by the deadline
- Different rates for those registered before and after 31 October 2023
- Contributions are based on the contribution account salary
- Emiratisation progress tracked for MOHRE targets
Payroll and corporate tax
How Does Payroll Affect Your Corporate Tax Return?
There is no tax on employees' salaries, but payroll is usually a company's biggest deductible cost, so it is checked closely in the corporate tax return:
- Deductible when incurred: salaries, bonuses and gratuity provisions are generally deductible if they are incurred wholly and exclusively for the business.
- Owners and directors: pay to shareholders, directors and their relatives is a payment to a connected person, deductible only up to market value under Article 36. See KMP salary benchmarking.
- Records: payroll records, contracts and WPS files must be kept for seven years for corporate tax.
- Accruals: year-end bonus and gratuity accruals must be supported, and unpaid accruals reviewed.
Because we keep the payroll and the books together, the figures in your accounts, your WPS records and your tax return match.
Is it time?
Signs You Should Outsource Your Payroll
Payroll problems are visible to every employee. These are the warning signs we see most often.
Salaries are close to the deadline
Payroll is finished at the last minute, risking a late WPS payment under the 1st-of-month rule.
Spreadsheets do the calculations
Formulas break when someone joins, leaves or takes unpaid leave mid-month.
One person knows the payroll
Leave or resignation of a single HR or finance person puts the next payroll at risk.
Final settlements cause disputes
Gratuity and leave balances are questioned by leaving employees or labour complaints.
Headcount is growing
More staff, more entities or a new free zone licence have outgrown the current process.
Avoid disputes and fines
Common UAE Payroll Mistakes
Paying after the 1st of the month
Now a WPS delay that triggers MOHRE enforcement
Gratuity calculated on total salary
Overpays; it is based on the basic wage
No gratuity provision in the books
Understates liabilities and surprises cash flow
Leave balances not tracked
Final settlements cannot be supported
Salary in the WPS file differs from the contract
Flags mismatches with MOHRE and employees
Owner pay not benchmarked
Excess may be disallowed for corporate tax
Glossary
UAE Payroll Terms Explained
- Wage Protection System (WPS)
MOHRE electronic system through which private-sector salaries are paid and monitored.
- Salary Information File (SIF)
Monthly file listing each employee's pay, sent to the bank or exchange house for WPS payment.
- Basic wage
Salary excluding allowances; the base for gratuity and overtime.
- End-of-service gratuity
Lump sum paid to an employee at the end of employment based on years of service.
- GPSSA
General Pension and Social Security Authority, which runs pensions for UAE nationals.
- ILOE
Involuntary Loss of Employment insurance, the UAE's mandatory unemployment insurance.
- DEWS
DIFC Employee Workplace Savings plan, which replaces gratuity for DIFC employees.
- Final settlement
Payment of unpaid salary, leave and gratuity when an employee leaves.
Why SGA World
Why Choose SGA World for Payroll?
Payroll and accounts together
Payroll posted straight into your books, with gratuity and leave provisions reconciled every month.
Tax built in
Owner pay, accruals and payroll records reviewed with your corporate tax position in mind.
Dubai and Abu Dhabi
Offices in Business Bay, Dubai, and in Abu Dhabi, serving mainland and free zone employers.
Location: Dubai
Dubai Office
Our Dubai office in The Exchange Tower, Business Bay is the central hub for our audit, accounting and tax services across the UAE.
Dubai
Office 1923, The Exchange Tower, Business Bay, Dubai
Abu Dhabi
Khalidiya Towers M-B6, W10, Al Bateen, Al Khalidiyah, Abu Dhabi
Talk to an auditor
Tell us your company type, jurisdiction and deadline. We will confirm the scope, timeline and fee.
- WhatsApp us+971 50 627 3556
- Call us+971 4 570 1795
- Email us[email protected]
- Book an appointmentChoose a time that suits you
Prefer a form? Send us a detailed enquiry.
Insights
Related guides
Who prepared this page
Written and reviewed by SGA World's audit and tax team
This guide is prepared by chartered accountants at SGA World Auditing Accounting L.L.C S.P.C in Business Bay, Dubai, a Ministry of Economy and Tourism approved audit firm, and checked against Federal Tax Authority legislation and guidance. It is reviewed whenever the rules change.
- Last reviewed 7 October 2026
- Chartered accountants from India and the UK
- FTA representation through Saif Chartered Accountants
Have a question about your company?
Tell us your activity, jurisdiction and deadline. A chartered accountant will reply.
Ask an expertFrequently asked questions
Payroll Services in the UAE – FAQs
Short answers to the questions UAE businesses ask us most. Still unsure?
Talk to our team01.What does a payroll service in the UAE include?
Monthly salary calculations, allowances and deductions, the WPS salary file, payslips, leave and gratuity tracking, final settlements and posting payroll to your accounts.
02.When must salaries be paid in the UAE?
Under the MOHRE rules effective 1 June 2026, salaries are due on the first day of each month, with no grace period. Later payments are treated as delayed.
03.What is WPS in the UAE?
The Wage Protection System is MOHRE's electronic salary system. Employers pay salaries through approved banks or exchange houses using a Salary Information File, so MOHRE can check that wages are paid in full and on time.
04.Do free zone companies need to use WPS?
JAFZA and DMCC companies are within the WPS rules. Other free zones set their own salary rules, but the Labour Law's leave and gratuity rules generally still apply.
05.What happens if salaries are paid late?
MOHRE issues alerts, can suspend new work permits from around day 5, impose fines and downgrade the company from around day 11, and escalate to labour complaints and prosecution for longer or repeated delays.
06.How is end-of-service gratuity calculated?
21 days of basic wage for each of the first five years and 30 days for each year after that, capped at two years' total wage. It is based on the last basic wage, not total salary.
07.Is there income tax on salaries in the UAE?
No. The UAE has no personal income tax on employment income, so there is no tax withheld from salaries.
08.What pension contributions apply to UAE nationals?
For Emiratis registered with GPSSA from 31 October 2023, the employer pays 15% and the employee 11%, with a 2.5% government contribution for salaries below AED 20,000. Older registrations use different rates.
09.Do expatriate employees pay social security in the UAE?
No. Expatriates are not covered by GPSSA. They receive end-of-service gratuity instead, or DEWS in the DIFC.
10.What is ILOE insurance and is it mandatory?
Involuntary Loss of Employment insurance is the UAE's unemployment insurance. It is mandatory for most private-sector and federal government employees, who must subscribe within four months of their work permit.
11.How many days of annual leave do employees get?
30 days a year after one year of service, and 2 days a month after six months of service.
12.How quickly must a final settlement be paid?
Within 14 days of the end of the employment contract, including unpaid salary, accrued leave and gratuity.
13.Can you prepare the WPS salary file for our bank?
Yes. We prepare the Salary Information File in your bank's or exchange house's format. You keep control by approving and releasing the payment yourself.
14.Is payroll outsourcing confidential?
Yes. Salary data is shared only with the people you authorise, and you keep control of the bank payment and your HR records.
15.Do you handle payroll for DIFC or ADGM companies?
Yes. DIFC and ADGM have their own employment laws, including DEWS in the DIFC, and payroll is calculated under those rules.
16.Is payroll deductible for corporate tax?
Generally yes, if incurred for the business. Pay to owners, directors and their relatives is deductible only up to market value under the connected-person rules.
