Payroll & WPS
The Fifteen-Day Grace Period Is Gone: UAE Salary Rules Since June 2026
Until June 2026, an employer who missed the salary date had fifteen days before the Ministry of Human Resources and Emiratisation treated it as a breach. Ministerial Resolution No. 340 of 2026 removed that window. Salaries are now due by the first day of the following month, automated monitoring begins on day two, and the consequences escalate on a fixed schedule.
The escalation schedule
| Day | What happens |
|---|---|
| 1 | Salaries must have reached employees through WPS or an approved channel |
| 2 | Automated monitoring begins; compliance alerts issued |
| 5 | MOHRE may suspend the issue of new work permits; formal warning |
| 11 | Administrative fines applied; establishment reclassified into a lower compliance category |
| 16 | Labour dispute procedures may be opened |
| 21 | Legal proceedings, asset attachment, travel restrictions, referral for prosecution |
Establishments must pay at least 85% of total wages on time to hold compliant status. That threshold matters for companies with a small number of disputed or held salaries: a handful of unpaid staff in a small workforce can breach it.
Who this applies to
Private sector employers regulated by MOHRE. DIFC and ADGM operate their own employment regimes and are generally outside it. Employers in IFZA, DMCC, JAFZA, RAKEZ, SHAMS and other free zones fall within it or operate an equivalent requirement, and should confirm with their own authority rather than assuming exemption. Assumed exemption is one of the more expensive mistakes in this area.
Why compliant employers still get caught
The cause is rarely an inability to pay. It is process. The Salary Information File has to be generated in the bank's required format, submitted, accepted, and cleared — and a file rejected on the 31st for a formatting error is a file that has not been paid on the 1st.
The recurring failure points are worth naming. Employee records that do not match the labour card — a name spelled differently, a stale labour card number — cause rejections. Mid-month joiners and leavers with pro-rated salaries introduce arithmetic that gets done late. Variable components such as overtime and commission arrive from operations after the payroll cut-off. And a salary account balance that is adequate on the 30th is not adequate on the 31st once the full run clears.
Practical consequence. The payroll cut-off now has to sit around the 25th, not the 30th. Everything variable — overtime, commissions, deductions, joiners, leavers — needs to be in by then for the file to be generated, checked, submitted and cleared before the 1st.
Gratuity is a monthly problem, not an annual one
End-of-service benefit accrues from day one of employment, calculated on basic salary and length of service, with different rates before and after five years and different treatment for resignation against termination. Most SMEs recognise none of it until someone resigns, at which point a liability that built quietly over four years lands in a single month's accounts.
Accruing it monthly costs nothing and does two things: the balance sheet shows the real obligation, and the cash requirement stops arriving as a surprise. Leave and air ticket entitlements behave the same way.
Emiratisation runs in parallel
Emiratisation targets are assessed at semi-annual checkpoints in June and December. Shortfalls are penalised at roughly AED 96,000 per unfilled Emirati position per year. It is a separate regime from WPS, with separate deadlines, and it catches companies that crossed the employee-count threshold during the year without noticing.
What good looks like
- Payroll cut-off on the 25th, published to every manager who submits variable data.
- Employee master data reconciled to labour cards quarterly, not when a file is rejected.
- SIF generated and validated against the bank format by the 27th.
- Salary account funded by the 28th, for the full run rather than the estimate.
- Confirmation that the file cleared — not merely that it was submitted.
- Gratuity, leave and air tickets accrued monthly.
Figures, thresholds and deadlines in this article were accurate on 10 August 2026. UAE tax rules change. This is general information, not advice on your circumstances — confirm your own position before acting.
Frequently asked
What is the exact salary deadline now?
The first day of the month following the wage period. The previous fifteen-day grace period was removed with effect from June 2026.
Do DIFC and ADGM companies need WPS?
They operate their own employment regimes and are generally outside the MOHRE WPS requirement. Their own rules on timely payment still apply.
What if an employee's salary is genuinely in dispute?
The 85% on-time threshold still governs your compliance status. Withholding a disputed salary can breach it in a small workforce, so the dispute needs to be handled through the correct channel rather than by simply not paying.
Not sure where you stand?
Thirty free minutes with a senior advisor. We will tell you what applies to you, what is due, and whether anything is already overdue.