The document discusses payroll processes in the United Arab Emirates. It outlines that HLB HAMT is a payroll outsourcing provider in the UAE that manages payroll with accuracy and confidentiality. It also describes UAE labor laws regarding payroll requirements, the government ministry that oversees employer-employee relations, and the mandatory wages protection system for payments. Finally, it discusses end of service gratuity calculations, benefits of outsourcing payroll to free up time and ensure compliance, and provides contact information for HLB HAMT.

1. Payroll Process in UAE
HLB HAMT is a payroll outsourcing provider in the UAE that has been assisting
clients manage their payroll cycle, with 100 percent accuracy and confidentiality.
Payroll process is a mandatory function in any business that requires time and an
eye for detail. Even though payroll laws and regulations vary from country to
country, the basic principle remains the same; paying all the employees on time,
without any error in calculations.
In the UAE, payroll requirements are taken care of by the labour law. The new
labour law, Federal Decree Law No. 33 of 2021 on the Regulation of Labour
Relations in the Private Sector, came into effect on 2nd February, 2022,
replacing the previous Federal Law No. 8 of 1980. The new law intends to protect
the rights of both employer and employee and it covers subjects connected to
working hours, overtime, leaves, vacation and public holidays, employing
juveniles, employee records, safety standards, minimum wage, termination of
employment, end of service gratuity payments and work injuries. The law does
not specify any minimum wage, but the salary provided to employees must be
sufficient to fulfill their basic requirements.
It is the Ministry of Human Resources and Emiratisation (MoHRE) that is in
charge of supervising the employer-employee relations and ensuring labour
rights are maintained in the private sector.
Wages Protection System
For non-free zone companies and JAFZA free zone, payments are controlled as
per the wages protection system. As per this system, employees’ wages will be
transferred to their accounts in banks or financial organizations, which are
authorized by the Central Bank of UAE. Unless a company registers with WPS,
MoHRE does not involve in any kind of transactions or deals with them.
The payment can be made in the national currency of the country, Emirati
Dirham or any other currency, provided it has been agreed upon by both the
employer and employee in the employment contract. The employees must be
paid monthly or bi-weekly based on the type of contract
Payroll is not subject to income tax in the UAE and as such there are no
mandated tax deductions. But, UAE nationals will have to contribute towards
national pension plans contributions.

2. Gratuity payment in UAE
Gratuity is a one-time payment made to employees following the end of their
service, provided the employee has served in the company for more than a year.
As the service period of the employee increases, gratuity sum also accrues.
While calculating the end of service gratuity in UAE, the days of absence from
work without payment are not considered. The gratuity amount is calculated as
given below;
 21 days pay for each year of the first five years of employment
 30 days salary for each additional year
Outsourcing payroll in UAE
• Companies usually find it bit difficult to manage payroll of multiple
employees, when they have numerous other core business functions going
on at a daily basis. In the case of larger enterprises, that has thousands of
employees, the work increases. Moreover, when you do payroll on your
own, the chances of error increase and the mistakes in the calculation of
salaries can result in dissatisfied employees and can affect the work
productivity.
• Outsourcing the payroll function not just frees up the time of an entity, but
also offers the assistance of a professional company that can provide
accurate results, that is compliant with the laws and regulations. Another
major advantage of outsourcing the payroll function in the UAE is the cost-
effectiveness it provides. A company need not bear the cost of
costly technology or skilled personnel as opposed to processing payroll
internally.
• UAE payroll is subject to numerous laws and regulations; hence the
assistance of a professional squad who are well updated about
the compliances and changes in the industry is mandatory. Outsourcing
payroll also comes with additional data security as these consultancies will
be equipped with highly updated resources and strategies to protect the
sensitive information of employees.
• READ MORE: hlbhamt.com/payroll-process-in-uae

3. Payroll Process in UAE
Level 18, City Tower-2,
Sheikh Zayed Road
PO Box 32665
Dubai – United Arab Emirates. Tel: +971 4 327 7775
E-mail: dubai@hlbhamt.com
www.hlbhamt.com