HR Software for UAE Companies: WPS Compliance and End-of-Service Gratuity
Payroll in the United Arab Emirates is, in one important way, simpler than payroll almost anywhere else: there is no personal income tax. But "no income tax" does not mean "no rules." UAE payroll has its own specific obligations, and HR software for a UAE company has to handle them. This guide explains what they are.
What UAE payroll actually involves
No personal income tax. The UAE does not levy personal income tax on employees. For most of the workforce, particularly expatriate employees, there is no income tax deduction at all.
Social insurance for UAE nationals. UAE and GCC nationals are enrolled in a social insurance scheme — broadly 5% from the employee and 12.5% from the employer, with a higher employer rate in Abu Dhabi. Expatriate employees are not in this scheme.
End-of-service gratuity. Instead of a pension, the UAE uses end-of-service gratuity. An employee accrues gratuity based on length of service — broadly 21 days of pay for each of the first five years, and 30 days for each year after that. Calculating it correctly, and accruing for it as a liability, is one of the main jobs of UAE payroll software.
The Wage Protection System. WPS is mandatory. Employers must pay salaries electronically and submit a Salary Information File, or SIF, through an approved channel so the authorities can confirm employees were paid correctly and on time.
UAE payroll is light on tax and heavy on two things: end-of-service gratuity and the WPS Salary Information File.
What to look for in UAE HR software
It should correctly apply social insurance for UAE nationals while leaving expatriate employees outside it. It should calculate end-of-service gratuity accurately, with the right accrual rate for each year of service. It should generate a valid WPS Salary Information File ready to upload to your bank. And it should produce payslips in dirhams.
How Mellow handles the UAE
Mellow calculates UAE payroll with these rules built in: social insurance for nationals, no income tax, and end-of-service gratuity accrual at the correct rates. It generates the WPS Salary Information File, which you then upload through your bank's WPS portal.
Mellow does not connect directly to a bank's WPS system — it produces the file and provides a step-by-step submission guide. That keeps the bank relationship and the final upload in your hands, which is how WPS is designed to work.
Alongside payroll, a UAE company gets the full Mellow HR platform — employee records, leave, onboarding, document management, and AI agents — from AED 19 per employee per month.
The bottom line
UAE payroll is not complicated, but it is specific. Generic HR software that does not understand end-of-service gratuity or WPS will leave you doing the hard parts by hand. Mellow handles both. See Mellow pricing.