Adding starters to payroll in the United Arab Emirates
Reviewed by Mellow Editorial Team, HR & payroll content team
When a new employee joins your business in the UAE, you need to complete several interdependent steps — visa sponsorship, labour registration, WPS enrolment and (where applicable) pension registration — before their first salary run. Miss one and you risk fines, blocked WPS transfers or gaps in the employee's legal status.
Confirm the employment contract and offer letter
Before anything else, issue a written employment contract that complies with Federal Decree-Law No. 33/2021 on the Regulation of Labour Relations. The contract must be in the standard Ministry of Human Resources and Emiratisation (MOHRE) format and should be bilingual (Arabic and English) for non-Arabic-speaking employees.
The contract must state the basic wage separately from allowances. This matters because gratuity, overtime and other statutory entitlements are calculated on basic wage, not total package. Get this right at the start to avoid disputes at offboarding.
Register the employee with MOHRE and obtain a work permit
For expatriate employees, the hiring sequence is:
1. Apply for a work permit through MOHRE via the Tasheel or MOHRE smart services portal. You will need the employee's educational certificates (attested where required), passport copy and a signed employment offer.
2. Entry permit — once the work permit is approved, the employee (if outside the UAE) enters on an employment entry permit issued by the Federal Authority for Identity, Citizenship, Customs and Port Security (ICP).
3. Medical fitness test and Emirates ID application — completed after arrival in-country.
4. Residence visa stamping — the employer sponsors the visa, which is linked to the company's establishment card.
For UAE and GCC nationals already residing in the country, the visa sponsorship steps do not apply, but you still register the employment contract through MOHRE.
All employment contracts for workers covered by Federal Decree-Law No. 33/2021 must be registered in the MOHRE system. This is the legal record of the employment relationship.
Enrol the employee in WPS
The Wage Protection System is mandatory for all private-sector employers. Salaries must be routed through a WPS-approved financial institution — a bank, exchange house or payroll card provider registered with the Central Bank of the UAE.
Practical steps:
- Register your company with a WPS-compliant payroll agent if you have not already done so.
- Add the new employee's details (Emirates ID number, bank or card account details) to your WPS file before the first salary payment is due.
- Submit the Salary Information File (SIF) each month. The SIF maps each employee's ID to their net salary, and the system reconciles it against your registered headcount.
WPS non-compliance — including late payment — triggers fines and can result in a block on new work permit applications. Keeping the SIF accurate from day one matters.
Handle pension contributions for UAE and GCC nationals
Expatriate employees do not contribute to a government pension scheme. They accrue end-of-service gratuity instead: 21 days' basic wage per completed year for the first five years, and 30 days' per year thereafter, capped at two years' total pay.
For UAE nationals, and for GCC nationals employed in the UAE, enrolment in the General Pension and Social Security Authority (GPSSA) scheme is mandatory. Both the employee and employer make contributions to GPSSA; the employer's obligation starts from the employee's first working day. You must register the new national employee with GPSSA promptly — late registration creates a liability for back-contributions and potential penalties.
Because expatriates receive no GPSSA pension, their gratuity accrual is the primary end-of-service liability on your books. Some employers provision for this monthly; others carry it as an unfunded balance. Either way, how Mellow runs payroll across six countries illustrates how a structured payroll process keeps these liabilities visible.
Run the first payroll and verify compliance
Once the employee's Emirates ID and WPS enrolment are confirmed, you can include them in the next salary cycle. A few checks before that first run:
- Probation period terms — Federal Decree-Law No. 33/2021 permits a probation period of up to six months. Confirm the contract reflects this correctly and that any probation-specific notice terms are documented.
- Annual leave accrual — employees are entitled to 30 calendar days of annual leave after completing one year of service. During the first year, leave accrues proportionally. Your payroll or HR system should start accruing from day one.
- Basic wage accuracy — double-check that WPS records reflect the basic wage as stated in the MOHRE-registered contract. Discrepancies between the contract and the SIF can flag a compliance issue during MOHRE inspections.
- No income tax deductions — there is no personal income tax on employment income in the UAE, so no tax withholding is required for any employee regardless of nationality.
Keep copies of the work permit, visa, Emirates ID, MOHRE contract and (where applicable) GPSSA registration confirmation in the employee's file. MOHRE inspectors can request these records, and you will need them if the employee's circumstances change or at end of service.
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