January 14, 2023
Over the past few years, the UAE market has experienced a significant boom. The UAE economy, particularly Dubai, has been expanding dramatically, especially following certain policy reforms. With each passing year, more businesses are forming in the UAE thanks to increasingly accommodating start-up and business rules. It signifies increased opportunity for expansion and economic growth, but it also signals increased competition and the need for more resources. Now that your firm is expanding at this rate, it is clear that you need the backing of technology to keep up and keep your company from collapsing.
Businesses in Dubai would have a lot less to worry about in terms of managing their human resources if they had effective payroll software in Dubai, but there are still a few things that employers should be aware of.
Understanding the wage protection system (WPS)
The WPS, which deposits paychecks directly to employees’ accounts, manages payroll in the UAE digitally. All private institutions must register for WPS with the Central Bank of the United Arab Emirates in order to be able to pay their employees. According to the contract provisions agreed upon between employers and employees in the UAE, salaries are made available via this method, preserving their rights and interests. Therefore, employees have to make sure that they are aware of this system and make sure they work according to this process.
Employee master files
Your employees’ qualifications, base salaries, contingent compensation, advance salary payments, salary increases, and any business allowances are all detailed in these files. In general, master files are collections of all employee data. The document streamlines payroll processing and payment in the UAE by centralizing employee data. Spreadsheets are a common (manual) way to keep track of this data, but a clever payroll software system makes it much easier to keep track of employee master files. Additionally, payroll software enables the automatic updating of employee data across numerous internal platforms (such as an organization’s HR system) and through a WPS interface.
The basic pay, allowances, and overtime an employee receives are all included in his or her gross pay. On this, your UAE payroll policy is predicated. The following formula must be used to determine this component:
The most typical contract utilized in the UAE payroll procedure is a limited contract. You sign a limited contract at the outset of employment outlining the start and end dates. The base salary is an agreed-upon monthly (often) or biweekly wage between the company and the employee, depending on the terms of the employee’s contract.
In addition to an employee’s UAE salary, there is a financial element called a gratuity. By doing this, the business recognizes the employee’s contribution to the company. UAE uses the following formula to determine gratuities:
Pay 21 days for each year of service during your first five years.
A thirty-day pay is due for every subsequent year.
Gratuities for the entire service period, excluding unpaid leaves, may not be paid in excess of two years’ pay.
WPS salary transfer file
The Ministry of Labour requires a Salary Transfer Files or Salary Information File in order to pay salaries through the WPS (SIF). Employee credentials, designations of salaries, and bonus information are just a few of the details found in a master file for employees.