What changed on 1 June 2026
Ministerial Resolution No. 340 of 2026 replaced the previous WPS regime, and three things changed at once.
Salaries now have a unified due date: the 1st of each Gregorian month, for the month before. It no longer matters what payroll cycle your contracts specify.
The fifteen-day grace period is gone. There is no grace period. Any payment after the due date is a delayed payment.
The compliance threshold rose from 80% to 85% of total wages transferred by the due date. And meeting it does not settle anything with the employee — paying 85% keeps you compliant with MOHRE while the worker retains a full claim to the balance.
Any guide still describing a fifteen-day window or an 80% threshold is describing the old rules.
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What happens when payment is late
Enforcement is automated and escalates quickly. Monitoring begins the day after the due date.
Within the first few days you receive automated warnings, and MOHRE suspends the issue of new work permits — that is the first sanction most employers actually feel, because it stops hiring immediately.
Around day eleven administrative fines are applied, and a repeat delay within six months moves the establishment into Category Three, which raises the cost of every MOHRE transaction you make afterwards.
Around day sixteen, for establishments with twenty-five or more affected workers, labour disputes are registered automatically. In the key industries — construction, transport and storage, security, cleaning and recruitment — that threshold can bite across combined establishments, because workers under the same owner are aggregated.
Around day twenty-one come precautionary attachment of company assets, collective dispute procedures, travel bans on the individuals responsible, and referral to the Public Prosecution in repeated or serious cases. Referral can happen regardless of company size where the delay is judged to threaten labour market stability.
On the fine amount: it is imposed under Cabinet Resolution No. 21 of 2020 and is commonly understood to be AED 1,000 per affected employee with a cap, but the figure is not published in the resolution text in a form we can cite with confidence. The much-quoted "AED 5,000 per worker up to AED 50,000" cannot be traced to any official instrument. Treat both with caution.
The basic salary decision that drives everything else
How you split basic salary against allowances is the most consequential structural choice in a UAE payroll, because three separate entitlements are calculated on basic wage and not on gross.
End-of-service gratuity is 21 days of basic wage for each of the first five years of service and 30 days for each year after that, capped at two years' wage in total and payable within fourteen days of the contract ending. Nothing is due below one year of service.
Overtime is paid on basic wage: the normal hourly rate plus at least 25%, rising to at least 50% for hours between 22:00 and 04:00. Work on a rest day is either a substitute day off or that day's pay plus at least 50%, and the employer chooses. Overtime is capped at two hours a day, and total hours must not exceed 144 in any three-week period.
Annual leave encashment is also on basic. Employees earn 30 calendar days a year after one year of service, and two days per month between six and twelve months. On termination every unused day is paid, regardless of accrual rules.
The alternative to gratuity
Since Cabinet Resolution No. 96 of 2023 there is a voluntary savings scheme that replaces gratuity with funded monthly contributions: 5.83% of basic salary for service under five years and 8.33% from five years. It is voluntary for the employer, but once an employee is enrolled, participation is mandatory for them and there is no route back to gratuity. Employers must stay in for at least a year, and gratuity accrued before enrolment is preserved and still payable on the basic salary that applied at the enrolment date.
Free zones differ. DMCC has required WPS registration since January 2024, with penalties deducted directly from the company's portal account. DIFC and ADGM sit outside the MOHRE framework entirely and have their own employment laws — DIFC replaced gratuity with the DEWS scheme in 2020.
