If you employ staff in the UAE mainland, you'll pay their salaries through the Wage Protection System (WPS). The rules were tightened on 1 June 2026, so it's worth checking your payroll process is still compliant.
What WPS is
WPS is an electronic salary payment system run by MOHRE. Instead of paying staff in cash or by ordinary transfer, employers pay salaries through a WPS agent, an approved bank or exchange house, using a Salary Information File (SIF) that lists each employee and the amount paid. MOHRE receives the data and can see who was paid, how much and when.
Who must use WPS
- Mainland private-sector companies registered with MOHRE: yes.
- Free-zone companies: it depends on the free zone. Some are covered by WPS (one 2026 summary names JAFZA and DMCC); others run their own systems. Check with your free-zone authority.
- Domestic workers: employers can choose to pay through WPS; it has been optional since 2022.
What changed on 1 June 2026
Ministerial Resolution No. 340 of 2026 introduced stricter rules:
- Salaries are due on the first day of the following month. The old window that allowed payment up to the 15th has gone.
- 85% compliance threshold: an employer is treated as compliant if at least 85% of total wages are paid by the due date (previously 80%).
- Faster escalation: late payers face warnings, then suspension of new work permits and further administrative action as the delay grows.
The exact enforcement timetable differs between published summaries, so check the resolution on the MOHRE website. The safe approach is simple: pay salaries by the 1st.
The monthly WPS payroll process
- Collect changes: new joiners, leavers, salary changes, unpaid leave, overtime, deductions.
- Calculate payroll: basic salary, allowances, overtime and permitted deductions for each employee.
- Approve: the owner or manager signs off totals before payment.
- Prepare the SIF: your payroll software or bank produces the salary file with each employee's details.
- Fund and submit: transfer the total to your WPS agent and submit the SIF, in time for salaries to reach employees by the due date.
- Send payslips to employees.
- Check for rejections: wrong IBANs or employee IDs cause failed payments that count as unpaid.
- Post payroll to your books and update the gratuity provision.
Tip: with salaries due on the 1st, run payroll in the last week of the month, not after it ends. Build in time for bank processing and holidays.
Recording payroll in your books
- Gross salaries and allowances as an expense, split by department if useful.
- Deductions (for example salary advances recovered) against the relevant balances.
- The net payment through the bank, matched to the WPS transfer.
- A monthly gratuity provision: see Gratuity Calculation in UAE.
- Annual leave and air ticket accruals if your contracts provide them.
Payroll costs are generally deductible for Corporate Tax, but keep records that tie payslips, the SIF and the bank transfer together.
Common WPS mistakes
- Paying part of the salary in cash outside WPS.
- Salaries in the SIF that don't match the employment contracts registered with MOHRE.
- Not updating the system when employees leave.
- Running payroll after month-end and missing the 1st.
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