How to Run UAE Payroll Under the New WPS Rules

If your business pays the previous month’s salary in the middle of the following month, that cycle is likely late under the UAE’s new Wage Protection System rules. Under Ministerial Resolution No. 340 of 2026, which came into force on 1 June 2026, wages for the preceding Gregorian month are due on the first day of the following Gregorian month. Payments made after that date are treated as delayed.

For payroll teams, this is not just a date change. It affects how salary files are prepared, when funds are made available, how deductions are documented, and how quickly employers must respond when a payment fails.

What Changed Under Resolution 340

Resolution No. 340 of 2026, issued by the Ministry of Human Resources and Emiratisation, replaces Ministerial Resolution No. 598 of 2022. The new framework introduces a unified monthly salary deadline, raises the WPS compliance threshold from 80% to 85% of total wages, and accelerates enforcement for delayed wage payments.

The monitoring environment has also become more digital. MoHRE’s updated WPS, launched with the Central Bank of the UAE, Al Etihad Payments, and approved financial institutions, uses direct data integration between MoHRE systems and financial institutions to support faster registration, verification, tracking, and oversight of salary transfers.

Resolution 340 directly applies to private-sector establishments licensed with MoHRE. Free-zone employers should check their own authority rules and payroll channels before assuming they are exempt or fully aligned. Some free zones already require WPS; for example, JAFZA states that all JAFZA-registered businesses are required to comply with the UAE WPS system. However, Morgan Lewis notes that it remains to be seen whether free zones such as DMCC and JAFZA will amend their own salary-transfer rules to match Resolution 340. DIFC and ADGM operate under separate frameworks.

New employees no longer benefit from the previous 30-day onboarding exemption. They fall within WPS from their first pay period. MoHRE’s WPS guidance also states that coverage has been expanded as a mandatory requirement for specific jobs in the domestic workers category, with optional application for the remaining occupations in that category.

The New Monthly Payroll Standard

The main operating rule is simple: salaries for the previous Gregorian month must be paid by the first day of the following Gregorian month. Any payment made after that date is delayed. Employers that currently pay in arrears on or around the 14th or 15th of the following month need to restructure their payroll calendar.

The 85% threshold also needs careful handling. An establishment is treated as compliant where it transfers at least 85% of the total wages due by the deadline. An individual worker is treated as paid if they receive at least 85% of their entitled wage, provided any shortfall is due to lawful deductions or withholdings under the UAE Labour Law. This does not remove the worker’s right to claim outstanding amounts.

In practice, payroll teams should treat the new rule as a monthly close process:

By around the 20th: Reconcile new joiners, leavers, salary changes, unpaid leave, and employee records against MoHRE and internal HR data.

By around the 22nd: Verify employee IBANs, exchange-house accounts, WPS card details, labour card numbers, UIDs, and other data needed for the Salary Information File.

Before the month ends: Run payroll, review lawful deductions, generate the SIF, validate totals, and fund the WPS agent’s collection account in full, including agent fees.

Before the 1st: Submit the SIF early enough for wages to clear by the deadline. Leaving submission until the last day can create avoidable risk if a file is rejected or funding is delayed.

On the 1st: Retrieve the agent confirmation report, reconcile it against internal payroll, and investigate any rejected records immediately.

Common SIF issues include labour card mismatches, missing or incorrect UID data, header and detail total discrepancies, overlapping pay-period dates, inactive labour cards, and salary values that do not match declared records. These errors should be caught before submission, not after the payment deadline.

Employers with Emirati workers should also check salary records against MoHRE’s separate Emiratisation salary requirement. MoHRE announced that the minimum monthly salary for Emiratis in the private sector increased to AED 6,000 from 1 January 2026, with establishments that employed Emiratis before that date given until 30 June 2026 to adjust salaries.

Enforcement and Liability

Resolution 340 uses a faster enforcement sequence than the previous framework. Electronic monitoring starts from the due date. From the second day after the due date, MoHRE may issue notifications and warnings. From Day 5, issuance of new work permits may be suspended. From Day 11, repeated violations within a six-month period may lead to administrative fines and reclassification into the Third Category. From Day 16, labour disputes and wider work-permit suspensions may apply to larger or connected establishments in specified sectors. From Day 21, more serious measures may apply in certain cases, including precautionary attachment procedures, travel bans against responsible individuals, and referral to the Public Prosecution.

The sectors receiving specific attention include construction, transport and storage, security services, cleaning services, recruitment agencies, and domestic worker recruitment offices. Employers in these sectors should be especially careful with payroll timing, group-company exposure, and recordkeeping.

Outsourcing payroll does not transfer compliance liability. Resolution 340 allows employers to delegate wage payment to a third party, but MoHRE must be provided with the delegate’s details and scope of delegation. The employer remains responsible for timely wage payment and WPS compliance.

Payroll Checklist Before the Next Run

• Confirm whether your establishment is directly licensed with MoHRE or subject to a free-zone payroll framework.
• Check whether your current pay cycle clears wages by the 1st of each Gregorian month.
• Reconcile MoHRE labour contracts with current salary records.
• Confirm lawful documentation for any deduction that reduces a worker’s received wage.
• Verify employee IBANs, exchange-house accounts, WPS cards, labour card numbers, and UID details.
• Confirm your WPS agent agreement is active.
• Fund the WPS agent account before the deadline, including agent fees.
• Validate the SIF before submission.
• Retrieve and archive confirmation reports, SIF files, bank advice, and deduction records.
• Register any payroll delegation arrangement with MoHRE where required.

The safest approach is to treat WPS as a standing monthly compliance routine, not a last-minute transfer. The deadline is now fixed, the threshold is more precise, and enforcement moves quickly once payment is delayed.

Key Takeaways

Under Ministerial Resolution No. 340 of 2026, wages for the previous Gregorian month are due on the first day of the following Gregorian month. Payments after that date are treated as delayed.

The WPS compliance threshold is now 85% of total wages paid on time, but this does not remove a worker’s right to claim any unpaid amount.

Free-zone employers should not assume exemption or full Resolution 340 alignment. They should confirm with their free-zone authority, payroll provider, and legal adviser where needed.

Payroll outsourcing does not transfer legal responsibility. The employer remains liable for WPS compliance.

Sources: MoHRE, UAE Government Portal, Central Bank of the UAE, Morgan Lewis, KPMG, DLA Piper, Pinsent Masons, JAFZA, Frontline IT.

Disclaimer: This content is for educational and informational purposes only. It is not legal, financial, investment, cybersecurity, medical, business, career, or other professional advice. Verify important information with official sources or qualified professionals before acting.