Wage Protection System in United Arab Emirates: A Complete Guide

If you run a business in the UAE or work here, chances are you’ve already heard of the Wage Protection System (WPS).

First launched in 2009 by the Ministry of Human Resources and Emiratisation (MOHRE) in collaboration with the Central Bank of the UAE, the system was designed to make sure workers get paid on time and in full.

Think of it as a safeguard: companies transfer salaries electronically through approved banks and financial institutions, and MOHRE monitors these transactions to protect employees’ rights. 

For employers, staying compliant with the Wage Protection System in UAE isn’t optional—it’s a legal requirement. 

And in 2025, with new updates rolling out, it’s more important than ever to understand how the system works, who it applies to, and what the risks of non-compliance are.

This guide breaks it all down for you.

What is the Wage Protection System in UAE?

The Wage Protection System in UAE is a mandatory electronic salary transfer system that ensures employees are paid through official financial channels. 

According to the UAE Government Portal, salaries are considered late if not paid within 15 days of their due date. 

Employers must use WPS to transfer salaries, and these transactions are monitored by MOHRE against employment contracts filed in the system.

By 2015, the International Labour Organization estimated that around 3.5 million of the 4.6 million migrant workers in the UAE were already covered by WPS, making it one of the largest payroll oversight systems in the region. 

Today, nearly all private-sector employees are brought under its umbrella.

Who Must Comply?

Not every entity in the UAE falls under the same rules, but most do.

• Mainland Companies: All private-sector employers registered with MOHRE must use WPS.
• Free Zones: Many free zones also require WPS.
• Jebel Ali Free Zone (JAFZA) made WPS mandatory as early as 2012.
• Dubai Multi Commodities Centre (DMCC) introduced WPS in 2023, and penalties now apply for non-compliance.

Exceptions: Financial free zones like DIFC and ADGM do not follow MOHRE’s WPS. Instead, they have their own employment frameworks such as the DEWS savings plan in DIFC.

If your company is registered with MOHRE—or in a free zone that requires it—you must pay staff via WPS. 

Ignoring this exposes you to fines, blocked work permits, and even criminal liability.

How Does WPS in UAE Work?

The process is straightforward once you’ve set it up. Here’s how it works step by step:

1. Open a corporate bank account with a bank or exchange house licensed by the Central Bank of the UAE.
2. Prepare a Salary Information File (SIF), which contains details of all employees’ wages, deductions, and banking details.
3. Submit the SIF to your WPS agent (bank/exchange/payroll provider).
4. Funds are transferred from the company’s account to employee accounts or payroll cards.
5. MOHRE monitors the transaction to ensure the amounts match employment contracts and that salaries are paid on time.

For unbanked employees, companies can issue payroll cards, which allow staff to withdraw salaries through ATMs and exchange houses.

If you’re unfamiliar with the recruitment processes and would like to understand how it works in the region, here’s how permanent placement works in the Middle East .

Key Rules You Need to Follow

To stay compliant with the Wage Protection System in UAE, here are the most important rules to remember:

• On-Time Payment: Wages are due the day after the contractual payday. If no date is mentioned in the contract, salaries must be paid at least monthly. Payments are considered late after 15 days.
• Minimum Payment Threshold: Employers must pay at least 80% of an employee’s wage each cycle if deductions apply, and at least 90% of employees must be paid on time to avoid system flags (Ministerial Resolution No. 43 of 2022).
• New Hires: Employees must be registered with WPS within 30 days of joining the company.
• Deductions: Any deduction must be lawful and reported clearly in the SIF file.

Recent Developments in 2024–2025

The UAE is constantly updating its labor framework, and WPS is no exception. Here are some of the latest updates:

Expansion to Domestic Workers (2025): As of April 2025, WPS is mandatory for five categories of domestic workers, including private trainers and caregivers. This marks the government’s commitment to broadening wage protection.

Fintech Integration: Also in this year, MOHRE partnered with digital wallet providers like e& money to enable salary transfers for domestic workers, especially those without bank accounts.

Increased Enforcement: MOHRE has also fined 40 domestic worker recruitment offices for violations and shut down 77 illegal recruitment social media accounts. This sends a clear message: compliance is not negotiable.

Penalties for Non-Compliance

MOHRE has a clear escalation path for companies that fail to comply:

• Day 0–10: Automated reminders are sent if salaries are not processed.
• Day 15: Salaries are officially “late,” and companies face administrative penalties.

For further guidance, visit our Risks of Labor Law Compliance in the UAE blog post.

Consequences:

• Blocking of new work permits.
• Company inspection by authorities.
• Fines ranging from AED 1,000 to AED 50,000 depending on the violation.
• Escalation to court in severe cases.

In December 2023, the Dubai Financial Services Authority fined a firm $1.36 million for inadequate compliance systems—although this was outside WPS, it’s a stark reminder that regulators in the UAE are increasingly intolerant of poor governance.

Practical Steps to Ensure Compliance

As a business owner or HR manager, here are some actionable steps you can take to stay compliant:

• Set a Payroll Calendar: Always pay before the 15-day threshold.
• Audit Your SIF Files: Double-check accuracy before submission—errors can flag your company as non-compliant.
• Train Your HR Team: Make sure staff handling payroll understand WPS rules.
• Document Deductions: Keep written proof for every deduction to avoid disputes.
• Use Payroll Technology: Invest in HR and payroll software that integrates directly with WPS.
• Keep Records: Maintain salary files, contracts, and MOHRE correspondence for audits.
• Engage Legal/HR Experts: Especially if you operate across free zones and mainland, rules can differ slightly.

What About Workers?

If you’re an employee, the Wage Protection System in UAE gives you the right to:

• Receive wages on time and through official channels.
• File a complaint with MOHRE if your employer doesn’t pay on time.
• Track salary status through MOHRE apps and hotlines.

This system ensures that workers—especially migrant employees—are not left vulnerable to wage theft or delays.

Why WPS Matters for Businesses and Workers

For employers, WPS is about more than avoiding fine. 

It builds trust with your workforce, strengthens your reputation, and ensures you can continue operating without legal roadblocks. For workers, it’s a vital safety net that guarantees timely pay.

As labor markets in the UAE become more competitive and compliant, companies that prioritize wage protection will stand out. 

Partnering with the right HR services or even a permanent placement agency in the Middle East can also help ensure your recruitment and payroll practices remain aligned with the law.

Wrapping up…

From its introduction in 2009 to its expansion into domestic work and fintech partnerships in 2025, WPS has grown into a robust mechanism that protects workers while keeping businesses accountable.

For you as an employer, compliance isn’t optional. 

Paying wages on time, filing accurate salary information, and staying updated on regulatory changes are essential steps to safeguard both your business and your employees.

Frequently Asked Questions (FAQ)

1. How does the Wage Protection System in UAE actually benefit employers, not just employees?

While WPS is often discussed as a safeguard for workers, it also benefits employers by building trust, reducing disputes, and improving transparency. 

A clean WPS record signals to regulators, banks, and even potential business partners that your company is credible and compliant—something that can give you an edge in competitive markets.

2. What risks do companies face if they delay wages, even unintentionally?

Delays—even if caused by system errors or oversight—can trigger MOHRE inspections, fines, or restrictions on new work permits. 

But beyond the financial risks, late payments damage employee morale, leading to higher turnover and reduced productivity. 

For many businesses, this hidden cost is far greater than the fines themselves.

3. How should companies handle deductions under WPS without crossing compliance lines?

Lawful deductions (such as for absences or penalties outlined in contracts) are allowed, but the rules are strict: workers must still receive at least 80% of their wage for the period, and deductions must be documented in the Salary Information File (SIF).

Being transparent with employees about deductions avoids disputes and ensures smoother audits.

4. With the 2025 updates, what challenges should smaller businesses expect?

For SMEs, integrating new categories of workers—like domestic staff—into WPS and navigating fintech-based solutions (e.g., salary cards or digital wallets) may feel complex at first. 

But these changes actually level the playing field, making it harder for non-compliant competitors to undercut responsible employers.