UAE payroll guide (2026): WPS, GPSSA, gratuity and labour law

Tax

There is no personal income tax on employment income in the UAE, so payroll has no withholding. Corporate tax under Federal Decree-Law 47/2022 is 0% on taxable income up to AED 375,000 and 9% above. Large multinational groups pay a 15% domestic minimum top-up tax from 2025.

Pension for Emiratis (GPSSA)

Emirati employees in the private sector are registered with GPSSA, or with the Abu Dhabi Pension Fund if registered in Abu Dhabi. The rate depends on when the employee was first registered:

Cohort	Employee	Employer	Contribution cap
New joiners (Federal Decree-Law 57/2023)	11%	15%, of which the government pays 2.5% below AED 20,000	AED 70,000 / month
Registered before 31 Oct 2023	5%	12.5% (+ 2.5% government)	AED 50,000 / month

The contribution salary is basic pay plus fixed contractual allowances such as housing. It excludes overtime and one-off bonuses. Contributions are due by the 15th of the following month. New Emirati hires must be registered within one month.

GCC nationals working in the UAE stay in their home country’s scheme under the GCC unified insurance extension. The employer applies home-country rates and pays through GPSSA.

Expatriates have no statutory pension. Mainland employers can opt into the voluntary alternative end-of-service savings scheme (Cabinet Resolution 96/2023) instead of accruing gratuity. They pay 5.83% of basic wage a month for employees with under five years’ service and 8.33% after. Unemployment insurance (ILOE) is compulsory for most employees but is paid by the employee.

End-of-service gratuity

Under Article 51 of Federal Decree-Law 33/2021, full-time employees with at least one year of continuous service are entitled to:

21 days’ basic wage for each of the first five years;
30 days’ basic wage for each year after that;
part years pro rata, excluding unpaid absence;
a total no higher than two years’ wage.

Gratuity is based on the last basic wage only, with no reduction for resignation, and is payable within 14 days of the contract ending. Use the UAE gratuity calculator. Emiratis covered by GPSSA receive a pension instead. DIFC and ADGM have their own employment laws; DIFC uses the DEWS savings plan instead of gratuity.

Wage Protection System (WPS)

Mainland employers must pay salaries through WPS, via banks, exchange houses or approved financial institutions, using a Salary Information File (SIF). Ministerial Resolution 340/2026, in force since 1 June 2026, made two changes:

wages are due on the 1st of the following month;
compliance means paying at least 85% of total wages due through WPS (previously 80%).

MOHRE escalates quickly, from alerts to suspension of new work permits within days. Read more in our WPS guide.

Working time, overtime and leave

Hours: 8 a day, 48 a week, usually reduced by two hours a day in Ramadan.
Overtime: basic hourly wage +25%. Work between 10 pm and 4 am earns +50% (except for shift workers). Rest-day work earns a substitute day or +50%. Overtime is capped at 2 hours a day. See the overtime calculator.
Annual leave: 30 days a year after one year, and 2 days a month between six and twelve months of service. See the leave salary calculator.
Maternity leave: 60 days (45 at full pay, 15 at half pay), plus up to 45 unpaid. Parental leave is 5 working days.
Public holidays: about 13–14 days a year on a unified public and private calendar.

Emiratisation and the Emirati minimum salary

Companies with 50 or more employees must grow skilled Emirati headcount by 1% every half-year, reaching 10% by the end of 2026. Companies with 20–49 employees in 14 listed sectors have per-head hiring obligations. Unmet targets cost about AED 10,000 per missing Emirati per month. From 1 January 2026, Emiratis in the private sector must earn at least AED 6,000 a month. Read the Emiratisation guide.

Gotchas for foreign employers

Gratuity uses basic pay only, so the split between basic and allowances drives end-of-service cost.
The GPSSA rate depends on first-registration date, so flag each Emirati’s cohort.
A late payroll can block new work permits within days under the 2026 WPS rules.
Free-zone employment rules (DIFC, ADGM, and individual free-zone regulations) differ from the mainland.

Frequently asked questions

Is there income tax on salaries in the UAE?

No. The UAE does not tax employment income. Corporate tax (9% above AED 375,000 of profit) applies to the business, not to salaries.

Do expats pay social security in the UAE?

No. Expatriates are not covered by GPSSA. They receive an end-of-service gratuity instead, or DEWS contributions in DIFC. Mainland employers may opt into the voluntary alternative savings scheme.

When must salaries be paid in the UAE?

Under Ministerial Resolution 340/2026, in force since 1 June 2026, wages are due on the 1st of the following month. An employer is compliant when at least 85% of total wages due are paid through WPS or another approved channel.