UAE Labour Law - a payroll and HR guide

The reformed contract regime, the Wage Protection System and end-of-service gratuity - organised for payroll.

UAE employment sits under one federal law and three payroll authorities. This guide lays out what each one requires - the contract regime after the 2021 reform, how wages are reported, and how end-of-service is earned.

Governing lawFederal Decree-Law No. 33 of 2021 (UAE Labour Law) and its executive regulations

The authorities this payroll answers to

  • RegulatorMOHRE - Ministry of Human Resources & Emiratisation
  • Wage reportingWage Protection System (WPS)
  • Social insuranceGPSSA - pensions for UAE/GCC nationals
  • Worker coverILOE - unemployment insurance
  • NationalisationEmiratisation (Nafis)
  • TaxNo personal income tax

01Contracts after the 2021 reform

The 2021 law removed the unlimited-contract distinction - all contracts are now fixed-term. Terms, probation, notice and non-compete are set within the federal framework, and what is signed must match what is registered with MOHRE.

02How wages are paid and reported

Salaries are paid and reported through the Wage Protection System as a SIF file via an approved agent. MOHRE monitors on-time payment and can suspend work permits for non-payment, so the payroll file and the bank transfer have to agree every cycle.

03Social insurance and unemployment

There is no personal income tax. UAE and GCC nationals are enrolled with GPSSA (employer and employee contributions on the pension wage); expatriates have no pension deduction. The ILOE scheme adds a small worker subscription, and Emiratisation targets apply to larger private-sector employers.

04End-of-service gratuity

For expatriates the gratuity is 21 days’ basic wage per year for the first five years and 30 days per year thereafter - pro-rated, capped at two years’ pay, and calculated on basic salary, not the full package.

At a glance

  • Working week48 hours
  • Overtime125% / 150%
  • Annual leave30 days
  • Gratuity cap2 years’ pay

Read this precisely: this is an orientation, not legal advice, and the 2021 law is applied through regulations that are updated over time. Confirm current provisions with MOHRE or a qualified adviser before acting.

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