What is the WPS (Wage Protection System) in UAE?
The Wage Protection System (WPS) is a mandatory electronic salary transfer system established by the Ministry of Human Resources and Emiratisation (MOHRE) in partnership with the Central Bank of the UAE. It requires all private sector employers registered with MOHRE to pay employee wages through an approved financial institution — a bank or licensed exchange house — using a standardised Salary Information File (SIF).
WPS was introduced to ensure employees receive their wages on time, in full, and through traceable channels. MOHRE monitors compliance in real time. Non-compliance is automatically flagged and escalates quickly.
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What Changed in 2026 — Ministerial Resolution 340
On 1 June 2026, Ministerial Resolution No. (340) of 2026 replaced Resolution No. (598) of 2022 and changed how WPS compliance is measured. The headline changes:
| Area | Before — Res 598/2022 | Now — Res 340/2026 |
|---|---|---|
| Salary due date | Contract-based (often end/mid-month) | 1st of each Gregorian month, for the previous month |
| Grace period | 15-day grace before being flagged late | None — any payment after the 1st is a delay |
| Compliance threshold | No equivalent fixed-percentage test | ≥85% of wages due, at company and employee level |
| New hires | Reported early grace for new employees | In scope immediately |
| Legal basis | Ministerial Resolution 598 of 2022 | Ministerial Resolution 340 of 2026 (repeals 598) |
Who Must Comply with WPS?
WPS applies to all private sector employers registered with MOHRE, including:
- Mainland UAE companies with one or more employees
- Free zone companies whose employees hold MOHRE-issued work permits
- Employers of domestic workers (expanded coverage as of April 2025)
Who is exempt:
Companies operating exclusively under free zone authority regulations — such as DIFC or ADGM — where employees hold free zone work permits (not MOHRE permits) are not required to use the MOHRE WPS system. DIFC and ADGM operate their own payroll compliance frameworks.
WPS Payment Deadlines (from 1 June 2026)
Under Article 1 of Resolution 340, the first day of each Gregorian month is the unified due date for paying the previous month's wages through the WPS. There is no longer a contract-by-contract due date, and no grace window — any payment made after the 1st is recorded as a delay.
New employees are in scope immediately, and establishments must submit data proving payment.
The 85% Compliance Rule
Under Article 2, an establishment is deemed compliant when, no later than the due date, it transfers at least 85% of the total wages due to its workers. Separately, an individual worker is not treated as unpaid if they receive at least 85% of their entitled wage — provided the shortfall results only from lawful deductions permitted under Article 25 of Federal Decree-Law No. 33 of 2021.
In short, the threshold now applies at both the company level and the employee level, and it replaces the looser framework that applied before June 2026.
WPS Penalty Timeline — What Happens If You're Late
Article 3 and Annex 1 of Resolution 340 set out an escalating series of measures, counted from the due date (the 1st):
| From the due date | What Happens |
|---|---|
| Day 1 (due date) | Electronic monitoring of the establishment begins (all establishments) |
| Day 2 | Notifications and alerts sent to non-compliant establishments |
| Day 5 | Suspension of new work permits, with a warning to pay |
| Day 11 | Administrative fine + reclassification to the Third Category (repeated violation within six months) |
| Day 16 | Automatic labour-dispute registration + permit suspension (establishments with 25+ workers, or group-owned firms reaching 25+ unpaid workers in sectors like construction, transport, security, cleaning and recruitment) |
| Day 21 | Executive instrument for wage payment, precautionary attachment of assets, travel ban on the person in charge, and referral to the Public Prosecution (establishments with 50+ workers on repeated violation) |
WPS Fines and Penalties
- Up to AED 5,000 per affected employee for non-payment of wages
- Maximum AED 50,000 per violation incident
- AED 1,000 per employee for submitting false wage data
- Work permit suspension and ban on new permit applications
- Criminal prosecution for severe or repeated violations
As of August 2024 amendments: fines for serious labour violations (including fictitious employment or failure to settle worker rights) range from AED 100,000 to AED 1,000,000
How WPS Works — Step by Step
- Employer prepares payroll and generates a SIF (Salary Information File)
- SIF is submitted to the employer's bank or licensed exchange house
- Bank processes the transfers and sends confirmation to MOHRE
- MOHRE updates compliance status for the employer in real time
- Employees receive wages in their bank accounts or prepaid cards
The SIF file contains: employer details, employee IDs, labour card numbers, IBAN/account numbers, salary amounts, and the payment period. The format is standardised by the Central Bank of UAE.
4 Common WPS Mistakes UAE Employers Make
1. Paying only some employees through WPS
The 85% threshold applies to the total value of wages due, at company and employee level. If your highest-paid employees are paid outside WPS, you may fall below the threshold even if most employees are paid on time.
2. Assuming there is still a grace period
Since 1 June 2026 there is no grace window — wages for the previous month are due by the 1st, and new hires are in scope immediately. Any payment after the 1st is recorded as a delay.
3. Confusing the payment due date with the WPS submission date
The salary must reach the employee's account — not just be submitted to the bank — by the due date. Submit the SIF at least 1–2 working days before the deadline.
4. Using spreadsheets to generate SIF files manually
Manual SIF generation leads to formatting errors that cause bank rejections. Rejected SIF files still count as non-payment from MOHRE's perspective.
FAQ Section
Q1: When did the new UAE WPS rules take effect?
The new rules took effect on 1 June 2026 under Ministerial Resolution No. 340 of 2026, which repealed and replaced Resolution No. 598 of 2022.
Q2: When must salaries be paid under the 2026 WPS rules?
Wages for the previous month must be paid through the WPS by the first day of each Gregorian month. Any payment made after that date is treated as a delay — the previous 15-day grace period has been removed, and new hires are in scope immediately.
Q3: What is the 85% rule in WPS UAE?
An establishment is deemed compliant when it transfers at least 85% of the total wages due to its workers no later than the due date. Separately, an individual worker is not treated as unpaid if they receive at least 85% of their entitled wage, provided the shortfall results only from lawful deductions under Article 25 of Federal Decree-Law No. 33 of 2021. The 85% threshold replaced the looser framework that applied before June 2026.
Q4: What are the penalties for paying salaries late in the UAE?
Measures escalate from the due date: electronic monitoring (Day 1), alerts (Day 2), suspension of new work permits (Day 5), an administrative fine and reclassification to the Third Category on a repeated violation within six months (Day 11), automatic labour-dispute registration and permit suspension for establishments with 25+ workers (Day 16), and — for establishments with 50+ workers on repeated violation — an executive instrument, precautionary attachment of assets, a travel ban on the person in charge and referral to the Public Prosecution (Day 21).
Q5: Does WPS apply to free zone companies in UAE?
It depends on the work permit type. Free zone companies whose employees hold MOHRE work permits must comply with WPS. Companies in DIFC or ADGM whose employees hold free zone authority permits are exempt from MOHRE's WPS and are instead subject to their own authority's payroll regulations.
Q6: What is the SIF file in UAE WPS?
The SIF (Salary Information File) is a standardised electronic file in the format prescribed by the Central Bank of UAE. It contains each employee's details — including their labour card number, bank account or IBAN, and salary amount — and is submitted through the employer's bank or licensed exchange house to process WPS payments.
Q7: Who is exempt from the UAE WPS?
Under Article 4 of Resolution 340, exclusions include workers with a wage claim before the courts, workers under an absconding report, workers whose liberty is restricted by a competent authority, workers on approved unpaid leave, certain seafarers and foreign workers paid outside the UAE (on approval), mission work permits up to three months, fishing boats and public taxis owned by individual citizens, banks and financial institutions, and places of worship.
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- MOHRE Ministerial Resolution No. (340) of 2026 concerning the Wage Protection System (in force 1 June 2026; repeals Resolution No. 598 of 2022)
- Wage Protection System — Ministry of Human Resources and Emiratisation (MOHRE)
- Payment of Salaries/Wages — UAE Government Official Portal (u.ae)