The legal framework: WPS, gratuity and Federal Decree-Law 33/2021
Federal Decree-Law 33/2021 on the Regulation of Labour Relations sets the core rules for UAE private-sector employment: working hours, leave entitlements, end-of-service gratuity, and termination notice. Almost all mainland and many free zone employers — including those in IFZA, DMCC, Meydan, SHAMS and JAFZA — must pay salaries through the Wages Protection System (WPS), submitting a monthly Salary Information File (SIF) to an approved agent.
Payroll accuracy also feeds directly into your corporate tax filing: salary costs, gratuity provisions and benefits are deductible expenses under Federal Decree-Law 47/2022, but only if properly documented and consistent with your books maintained under bookkeeping & accounting.
Employers who fail to pay salaries through WPS within the required window can face work permit suspensions, fines, and in repeat cases a downgrade of their MOHRE compliance rating — affecting future visa approvals.
Who needs professional payroll management
- Mainland companies in Dubai, Abu Dhabi, Sharjah, Ajman and RAK with any WPS-registered staff
- Free zone employers in IFZA, DMCC, Meydan, SHAMS and JAFZA managing multi-nationality teams
- SMEs without an in-house HR or payroll function
- Companies hiring their first employees and setting up payroll for the first time
- Businesses needing accurate gratuity provisioning ahead of year-end financial statements
What our payroll service delivers every month
- Monthly salary calculation including basic pay, allowances, overtime and deductions
- WPS-compliant SIF file generation and submission
- Digital, itemised payslips for every employee
- End-of-service gratuity accrual calculated per Federal Decree-Law 33/2021
- Leave balance tracking (annual leave, sick leave, unpaid leave)
- Final settlement calculations for resignations and terminations
- Payroll journal entries reconciled into your books via bookkeeping & accounting
Gratuity calculation, explained
End-of-service gratuity is calculated on basic salary, accruing at 21 days' pay per year for the first five years of service and 30 days' pay per year thereafter, subject to a two-year minimum service requirement and applicable caps under Federal Decree-Law 33/2021. Errors here are common and costly — use our gratuity calculator for a quick estimate, and let us handle exact provisioning in your books.
| Years of service | Gratuity basis |
|---|---|
| Less than 1 year | No entitlement |
| 1–5 years | 21 days' basic salary per year |
| 5+ years | 30 days' basic salary per year (beyond year 5) |
How payroll onboarding works
- 1Free consultation to understand headcount, salary structure and WPS registration status
- 2Employee data collection: contracts, Emirates IDs, labour cards, bank/WPS account details
- 3Payroll calendar agreed — typically salaries processed 3–5 days before month-end
- 4First payroll run processed and reviewed by a tax expert before submission
- 5SIF file generated and submitted through your approved WPS agent
- 6Payslips issued and gratuity ledger opened for ongoing accrual tracking
- 7Monthly cadence continues with WhatsApp support for ad hoc changes
Documents required
- Employee contracts and offer letters
- Emirates IDs, passport copies and labour cards for each employee
- Existing WPS agent details or bank account information
- Prior payroll records, if switching providers mid-year
- Company trade licence and establishment card
Transparent, headcount-based pricing
Payroll fees scale with employee count. See pricing and packages for full details, or request a fixed monthly quote below.
| Employees | Indicative monthly fee (AED) |
|---|---|
| 1–10 | From AED 499 |
| 11–25 | From AED 999 |
| 26–50 | From AED 1,799 |
| 50+ | Custom quote |
Penalties for payroll non-compliance
MOHRE can suspend work permit issuance for companies with repeated WPS delays, and gratuity miscalculations can trigger labour disputes at the Ministry or courts, with compensation claims exceeding the original shortfall. Incorrect payroll costing also distorts your deductible expenses for corporate tax filing, risking disallowed deductions on audit.
A Sharjah trading company underprovisioned gratuity for three departing staff by AED 45,000 due to manual spreadsheet errors. We recalculated correctly under Federal Decree-Law 33/2021, avoided a labour claim, and corrected the deductible expense in the company's Corporate Tax return.
Free zone payroll specifics
Free zones including IFZA, DMCC, Meydan, SHAMS and JAFZA each have their own visa quota and WPS enrolment procedures, though the underlying labour law and gratuity entitlements under Federal Decree-Law 33/2021 remain broadly consistent. We handle the free zone-specific WPS registration steps as part of onboarding so payroll runs smoothly from month one.
Why choose Tax Easy UAE for payroll
- Every payroll run reviewed by a tax expert before submission
- Accurate WPS SIF files, avoiding permit suspension risk
- Correct gratuity provisioning aligned to Federal Decree-Law 33/2021
- Fixed, transparent AED pricing based on headcount
- 100% online service across Dubai, Abu Dhabi, Sharjah, Ajman and RAK with 30-minute WhatsApp response