Every private sector employer in the UAE must pay employees through the Wage Protection System (WPS) — a MOHRE initiative that tracks whether salaries are paid on time and in full. Getting it wrong means frozen labour quotas, licence suspensions, and fines.
This guide covers everything UAE employers need to know: what WPS is, how SIF files work, how to calculate EOSB gratuity correctly, what the penalties are, and how to automate the whole process.
UAE Labour Law (Federal Decree-Law No. 33 of 2021) and MOHRE WPS rules are updated periodically. This guide reflects rules current as of June 2026. Confirm current requirements with MOHRE or a qualified UAE HR/legal advisor.
The Wage Protection System is a digital salary transfer system established by the UAE Ministry of Human Resources and Emiratisation (MOHRE). It requires employers to pay employee salaries through authorised financial institutions using a standardised electronic format — the SIF file — so that MOHRE can monitor whether salaries are paid correctly and on time.
WPS was introduced in 2009 and has been progressively extended to cover more categories of employers. Today it covers the vast majority of private sector employees in the UAE.
WPS applies to:
DIFC and ADGM have their own employment frameworks separate from MOHRE. Check with your specific free zone authority for their payroll compliance requirements before assuming standard WPS rules apply.
A SIF (Salary Information File) is a structured text file that contains:
You generate the SIF file in your payroll software, upload it to your UAE bank's online portal, and the bank processes the salary transfers and reports the payments to MOHRE automatically.
All major UAE banks accept WPS SIF files, including:
Each bank has a slightly different SIF file format and upload portal. UAE payroll software like ETaxFlow generates the correct SIF file format for your specific bank automatically.
Open a corporate account with a UAE bank that supports WPS. Request your WPS Employer ID — you will need this for your SIF files. Most banks activate WPS access within 3–5 business days.
Enter each employee's details: full name, Emirates ID, IBAN number, basic salary, and allowances. The IBAN must be a UAE bank account held in the employee's name — salaries cannot be paid to third parties under WPS.
Calculate each employee's net salary — basic salary plus allowances, minus any authorised deductions (advance repayments, authorised leave without pay). Apply leave deductions for any unpaid absences in the month.
Your payroll software generates the SIF file in your bank's format. Review the file to confirm employee IBANs and salary amounts before uploading. One error can delay the entire payroll run.
Log in to your bank's online banking portal, navigate to the WPS / payroll section, and upload the SIF file. Ensure sufficient funds are in the account before the payment processing date.
The bank sends a confirmation once salaries are processed. Download and store the payment confirmation report — this is your proof of WPS compliance if MOHRE queries a payment.
Under WPS, salaries must be paid within 10 days of the salary due date. If salary is delayed by more than 10 days, MOHRE automatically flags the employer and penalties begin to accrue. Processing SIF files takes 1–2 business days — submit at least 3 days before the due date.
MOHRE enforces WPS compliance rigorously. Violations trigger an escalating penalty schedule:
The consequences extend beyond fines — if your labour quota is suspended, you cannot hire new staff or renew work permits, which can cripple business operations.
ETaxFlow generates your SIF file and alerts you before the payroll deadline each month.
End of Service Benefit (EOSB), commonly called gratuity, is a mandatory payment to employees on termination of their UAE employment contract. Under Federal Decree-Law No. 33 of 2021, all employees who complete one year of service are entitled to EOSB.
| Period of Service | Daily Rate | Calculation |
|---|---|---|
| 1–5 years | 21 days of basic salary per year | (Basic Salary ÷ 30) × 21 × Years Served |
| Above 5 years | 30 days of basic salary per year | First 5 years at 21 days, then 30 days per year for years 6+ |
| Less than 1 year | Not entitled | No EOSB payable for service under 1 year |
Use the free UAE EOSB gratuity calculator to calculate any employee's entitlement instantly — with the 21-day / 30-day band breakdown and the 2-year salary cap applied automatically.
An employee with 7 years of service and a basic salary of AED 8,000/month:
Smart UAE businesses accrue an EOSB provision in their accounting every month — spreading the liability rather than facing a large cash outflow when employees leave. ETaxFlow calculates and posts the EOSB provision automatically with each payroll run.
Most UAE SMEs run payroll in one system and keep their accounts in another — or in a spreadsheet. This creates three problems:
With ETaxFlow's accounting-integrated payroll, every payroll run automatically posts:
No manual journals. No missed provisions. No reconciliation headaches at year end.
ETaxFlow runs payroll, generates the SIF file, and posts the journals — all in one step.
The Wages Protection System is a mandatory electronic process used to ensure local employers pay staff salaries in full compliance with agreed labor contract terms. MOHRE enforces it rigorously — non-compliance leads to visa bans, labor quota blocks, and direct financial penalties.
To stay fully compliant, employers must route at least 90% of total staff headcount pay through authorized WPS banking pipelines every single month to prevent automatic operational holds on new visa applications.
Key operational deadlines: Salaries must be transferred within 15 days of their formal due date — or the date specified in the employee's labor contract — to ensure your system remains clear of automated fines. Late payment to even one employee in the pay cycle can trigger a compliance flag against the entire company.
The Wage Protection System (WPS) is a UAE Ministry of Human Resources and Emiratisation (MOHRE) initiative that ensures private sector employees receive their salaries on time and in the correct amount. Employers must process salaries through approved financial institutions using a SIF (Salary Information File) and the payments are monitored by MOHRE.
All private sector employers in the UAE with employees on work permits sponsored by a mainland establishment (DED licence) must comply with WPS. Free zone companies in most UAE free zones are also required to register. Domestic workers have a separate domestic worker WPS system.
MOHRE penalties for WPS violations include suspension of new labour quota approvals, labour permits and licences; fines; and in serious cases, business closure. Late salary payment — defined as more than 10 days after the due date — triggers automatic MOHRE escalation. The penalties scale with the number of affected employees and duration of non-compliance.
Under the UAE Labour Law, end of service gratuity is 21 days of basic salary per year for the first five years, and 30 days per year thereafter. The calculation uses the last basic salary, not total package. Unpaid leave periods may be excluded. ETaxFlow calculates EOSB automatically per employee.
Most UAE free zones require their licenced companies to register for WPS and pay employees through the WPS system. Some free zones operate their own payroll monitoring systems. Check with your specific free zone authority for their payroll compliance requirements.
A SIF (Salary Information File) is a structured text file containing your employees' IBAN numbers, salary amounts, and your company's TRN that is submitted to your UAE bank to process payroll under WPS. UAE payroll software generates the SIF file automatically. You upload it to your bank's online portal and the bank processes the transfers and reports to MOHRE.