To run payroll in the UAE, you keep each employee's salary and bank details current, collect the month's attendance and leave, work out gross pay, take off deductions, get the month approved, then send the WPS salary file to your bank or exchange house before the due date. The order matters more than the software: a month approved before its inputs are complete has to be reopened.
This guide walks through how to run payroll in the UAE as eight steps, with one fictional employee carried from start to finish so you can check every number.
Payroll is only as good as the records it reads. Before the first run, every employee needs:
Keep allowances separate from basic. Gratuity is worked out on basic salary only, so a package recorded as one lump figure has to be split before anyone leaves, and that is a bad time to discover the split was never agreed.
Our fictional employee, Rania, earns AED 6,000 basic, AED 2,500 housing and AED 500 transport: AED 9,000 a month in fixed pay.
Step 1: Fix the pay period
Decide the period the run covers and stick to it. Many UAE companies pay a calendar month. If you use your own cut-off, such as the 21st to the 20th, write it down, because the WPS file states the period's start and end dates and the days paid.
Step 2: Collect the inputs
Gather everything that changes this month's figures:
In October 2026 Rania worked 6 hours of ordinary overtime and 2 hours between 10pm and 4am, took 2 days of approved unpaid leave, and is repaying a salary advance at AED 500 a month.
Step 3: Work out fixed pay, with pro-rata for joiners
An employee who worked the whole month gets their full fixed pay. Rania's is AED 9,000.
A joiner or leaver is paid for the days employed. One common method divides by the calendar days in the month: someone on AED 9,000 who joined on 20 October is employed for 12 of October's 31 days, so 9,000 x 12 / 31 = AED 3,483.87. Whatever method your contract or policy uses, use the same one every month.
Step 4: Add overtime
The overtime rules used here are the ones on our free calculator. The hourly rate is the monthly basic salary divided by 240, and allowances are left out. Ordinary overtime is paid at 125 per cent of that rate; hours between 10pm and 4am are paid at 150 per cent, which does not apply to staff on shift patterns.
For Rania:
Step 5: Take off deductions
Unpaid leave and loan instalments are the usual two. How a day of unpaid leave is valued should be written into your policy. Wurxa, for example, deducts (basic + allowances) / 30 per day, which for Rania is 9,000 / 30 = AED 300 a day, so AED 600 for 2 days. Her advance instalment is AED 500.
Check: 9,000 + 262.50 = 9,262.50; less 1,100 gives 8,162.50.
Step 6: Review and approve before anything is sent
Read the run as a whole before you read any one line. Compare the total with last month and explain the difference: a joiner, a leaver, a raise, a lot of overtime. Then the person who signs off, usually the owner, approves it. Once approved, freeze the month. If a figure later turns out wrong, reopen it deliberately and record why, rather than editing quietly.
Step 7: Build the WPS file and pay on time
Salaries in the UAE are paid through the Wage Protection System. You give your bank or exchange house a salary information file (SIF) listing every employee and amount, and it pays from that file. Our post on the WPS SIF file covers why files get rejected.
Under Ministerial Resolution No. 340 of 2026, effective 1 June 2026, wages for a Gregorian month are due on the first day of the following month. October's salaries are due on 1 November. You are treated as compliant if at least 85 per cent of the total wages due are transferred by then, excluding lawful deductions. The WPS deadline tracker shows the dates for any month and what happens if a payment slips. Bank processing time is yours to absorb, so send the file early around weekends and holidays.
Step 8: Issue payslips and record the month
Each employee should see how their net pay was reached: every earning, every deduction, the net. Then the month goes to your accounts as a journal, with salary costs as debits and net pay owed as a credit.
Keep the run, the file you sent and the approval together. When someone leaves, the final settlement draws on all of it, and gratuity must be paid within 14 days of the contract ending, according to the UAE Government Portal. Checked on 12 October 2026 against the u.ae page on end of service benefits.
Where Wurxa fits
Wurxa Payroll follows these same eight steps. Salary items carry effective dates, a readiness check lists missing IBANs, routing codes and MOHRE person IDs with a link to fix each one, overtime comes from recorded attendance, and the owner approves before a month is locked. It then builds the SIF in the layout of the bank or exchange house you choose and gives staff PDF payslips on their phone. It does not pay salaries; your bank does.
If you want to try a month on your own figures, Ask Sara on wurxa.com or message us.
This article is general information, not legal advice.
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