What is UAE WPS and who needs to comply?

WPS (Wages Protection System) is a mandatory salary payment system through approved banks. All UAE-registered mainland and free-zone employers must comply or face fines and labour transaction blocks.

How is gratuity calculated in the UAE?

For the first 5 years: 21 days of basic salary per year. For each subsequent year: 30 days of basic salary per year. Total gratuity is capped at 2 years of total basic salary. Different rules apply for termination with cause.

What are the MOHRE compliance requirements for payroll?

Employers must maintain valid employment contracts, process salaries through WPS, pay on time each month, and keep payroll records for MOHRE inspections. Non-compliance can result in fines and blocked new visa applications.

UAE Payroll Compliance Guide | WPS, MOHRE, Gratuity

Quick answer

UAE payroll compliance requires employers to pay salaries through the Wages Protection System (WPS) via approved financial channels, maintain MOHRE-compliant employment contracts and records, calculate end-of-service gratuity per UAE Labour Law (21 days basic per year for first 5 years, 30 days thereafter), and for Dubai government entities, contribute to the Dubai Pension Fund. OfficeKit HR automates WPS/SIF file generation, gratuity accrual, and audit-ready reporting.

Key regulations in UAE

Wages Protection System (WPS)

Mandatory for all UAE-registered employers. Salaries must be paid through WPS-approved banks using Standard Information Files (SIF). Non-compliance results in penalties and labour transaction blocks.

MOHRE Labour Law Compliance

Employers must register with MOHRE, maintain valid employment contracts through the MOHRE portal, and comply with UAE Labour Law (Federal Decree-Law No. 33 of 2021) on working hours, leave, and termination.

End-of-Service Gratuity (EOS)

Employees with 1+ year of continuous service are entitled to gratuity: 21 days basic salary for each of the first 5 years, and 30 days for each subsequent year. Caps at 2 years' total basic salary.

Dubai Pension Fund (for government entities)

Dubai government and semi-government entities must contribute to the Dubai Pension Fund at specified rates for UAE national employees.

Compliance checklist for UAE

Set up employee contracts through the MOHRE portal with accurate job titles and salary details

Configure payroll salary components aligned to UAE labour law (basic, housing, transport, allowances)

Enable WPS-compliant payroll with SIF file generation for monthly salary runs

Validate employee IBANs, salary amounts, and pay periods before WPS submission

Calculate and accrue gratuity per service tenure (21 days/year for first 5 years, 30 days thereafter)

Process leave encashment for unused annual leave at termination

Maintain audit-ready payroll registers, contract copies, and WPS records for MOHRE inspections

File pension contributions for eligible UAE national employees (Dubai government entities)

How OfficeKit HR helps with UAE compliance

OfficeKit HR centralises employee records, attendance, leave, and payroll in one system — reducing manual data transfer and compliance errors. Payroll rules for UAE are configured within the platform, and statutory filings are generated from the same data used for pay runs.

Multi-country groups running entities in India and the GCC can manage all payroll compliance from a single HRMS, with region-specific rules applied per entity.

UAE Payroll Compliance Guide