Navigating Payroll Compliance in Dubai: A Guide to WPS and Beyond

The UAE's Wage Protection System (WPS) is a government-mandated electronic salary transfer system to be used post payroll processing to ensure timely and accurate payment of wages to employees in the private sector. It was jointly launched in 2019 by the Central Bank of the UAE and the Ministry of Human Resources and Emiratisation (MoHRE). The WPS plays a major role in protecting the employee rights mentioned in the UAE Labor Law.

Components of a WPS File

A WPS file typically includes:

Company Information

Employee Information

Salary Details

Transaction Details

1. Employer's name and details as registered with MOHRE
2. Unique Employer ID registered in the WPS system

3. Employer Reference Number

1. Employee's name and details
2. Employee’s unique ID as per the MOHRE system given by MOL
3. Employee’s bank or payroll card account details for direct salary deposits

4. Labour card details

5. Duration within which payment needs to be done

1. Basic salary amount
2. Any allowances or additional benefits
3. Deductions or other adjustments if applicable

4. Net salary to be paid

5. Payment frequency (e.g., monthly, bi-weekly)
6. Payroll cycle or payment month
7. Payment Currency

1. Timestamp and day of payment

How does WPS work?

Four simple steps are involved as explained below:

  1. Salary Information File (SIF): Employers create a SIF containing employee details like salary, benefits, and deductions. The SIF is reviewed and submitted to the WPS.
  2. WPS Review: The Ministry of Human Resources and Emiratisation (MoHRE) and the Central Bank of the UAE review the SIF for accuracy and compliance with WPS regulations.
  3. Payment Order: If the SIF is approved, a payment order is issued to the WPS agent.
  4. Salary Transfer: The WPS agent transfers salaries directly to employees' bank accounts. Many banks offer WPS payroll cards for convenient access to funds.

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