Employment & Payroll in the UAE
What employers must get right — gratuity, the Wage Protection System, the 2026 salary-date rule, Emiratisation and leave.
UAE employment in the private sector is governed by Federal Decree-Law No. 33 of 2021 (in force since 2 February 2022) and its executive regulations under Cabinet Resolution No. 1 of 2022, administered by the Ministry of Human Resources and Emiratisation (MOHRE). Two financial-centre free zones — the DIFC and ADGM — run their own employment laws, so always confirm which regime governs the contract.
End-of-service gratuity (Article 51)
Foreign full-time employees who complete at least one year of continuous service are entitled to an end-of-service gratuity, calculated on basic salary (not total pay):
| Service period | Gratuity accrual (on basic salary) |
|---|---|
| First 5 years | 21 days' basic wage per year |
| After 5 years | 30 days' basic wage per year |
Gratuity is pro-rated for partial years beyond the first, and the total is capped at two years' wages. The old "limited vs unlimited contract" distinction no longer affects the calculation. UAE nationals accrue pension rights through the GPSSA instead of gratuity. All final dues, gratuity included, must be settled within 14 days of the last working day.
The Wage Protection System (WPS)
Salaries must be paid through the Wage Protection System — electronically, via Central Bank-approved channels (banks, exchange houses or wage cards). Paying salaries in cash is not permitted, even with employee consent. The WPS covers the large majority of private-sector employees and MOHRE monitors payments in real time, flagging late or missing salaries automatically.
Emiratisation
Private-sector employers with 50 or more employees are required to meet Emiratisation targets — broadly, a rising percentage of skilled roles held by UAE nationals (in the region of 2% increments). Failing to meet the target carries monthly financial contributions per unfilled position, so workforce planning needs to account for it.
Leave and working hours
Employees are entitled to 30 calendar days of paid annual leave after one year of service (pro-rated earlier), plus official public holidays. The law also sets standard working hours, overtime rules, and sick, maternity and parental leave entitlements, and provides a structured MOHRE dispute-resolution route before any matter reaches the labour courts.
Frequently asked questions
How is UAE gratuity calculated?
On basic salary: 21 days' pay per year for the first five years and 30 days per year thereafter, after at least one year of service, capped at two years' wages.
Can I pay staff in cash in the UAE?
No. Private-sector salaries must be paid through the Wage Protection System via approved channels; cash payment is not permitted.
When must salaries be paid in 2026?
By the 1st of each month, under Ministerial Resolution No. 340 of 2026, effective from 1 June 2026.
How much annual leave is required?
30 calendar days per year after one year of continuous service, plus public holidays.
Official sources
- Ministry of Human Resources & Emiratisation (MOHRE)
- UAE Government Portal — Employment Rights
- Legal basis — Federal Decree-Law No. 33 of 2021, Cabinet Resolution No. 1 of 2022, and Ministerial Resolution No. 340 of 2026
This guide is general information prepared by ARM Management and is current as at June 2026. It is not legal advice; entitlements differ in the DIFC and ADGM and rules change. Confirm against MOHRE or an advisor before acting on any specific case.
Run UAE payroll with confidence.
ARM Management advises employers on UAE payroll, WPS compliance, gratuity, Emiratisation and HR structuring — for both mainland and free-zone operations. Begin with a confidential conversation.