What is WPS in the UAE?

The Wage Protection System (WPS) was established in 2009 by the Ministry of Human Resources and Emiratisation (MOHRE) in association with the Central Bank of the UAE. This ensures that employees are paid promptly and accurately, in accordance with the terms outlined in their employment contracts registered with the MOHRE.

WPS is an electronic system designed to manage employee salary transfers through accredited banks or exchange offices. Employers are required to process salary payments via WPS by the 15th of the next month. Failure to meet this deadline may result in the suspension of new work permit issuance for companies by the MOHRE as of the 17th of the next month.

WPS in UAE Free Zones

The Wage Protection System (WPS) is being adopted by some UAE Freezone Authorities.

So far, WPS has been implemented into Dubai Multi Commodities Center (DMCC) and Jebel Ali Free Zone Authority (JAFZA) Freezones. All businesses in DMCC and JAFZA to are obliged to pay their employees via WPS.

We expect that other Freezones to follow suit in the coming years adopting WPS or similar salary transfer systems. We are currently seeing more Free zone authorities requesting companies to provide an end of year report on the salaries transferred to their employees. The Dubai Airport Freezone (DAFZA) has implemented an Employee Payroll System that mandates employers to maintain employee payroll records on the DAFZ online portal. This system provides authorities with complete visibility into payroll-related activities.

WPS and Payroll

With DMCC, JAFZA and Mainland companies in the UAE being required to adhere to WPS it is important for companies to automate and streamline their payroll process to save time and avoid submitting incorrect information about employee’s salaries. WPS benefits both the employee and employer, it protects both parties as it provides an online trail of salary transfers in case of claims of wrongful payments or further disputes.

We can assist clients with establishing a new database within our payroll processing systems, transferring previous payroll records, collaborating with clients to finalise monthly payroll calculations, creating the Salary Transfer File (SIF) to upload according to the companies’ bank requirements, providing the client with the report which considers employee salary details, End of Service Gratuity (EOSG) accrual and issuing monthly payslips.

How can we assist you? 

Should you require further support on WPS requirements in the UAE or have any inquiries about payroll services then please contacts us by filling out the inline form, emailing hrmiddleeast@sovereigngroup.com or call T:+971 (0)4 456 1761, M: +971 (0)52 926 8037 and we would be delighted to assist you.