The UAE salary rule requires private employers to pay each month’s wages by the first day of the following month. Ministerial Resolution 340 of 2026 took effect on 1 June, and later payments count as late. On FOUAE (Founders of UAE) figures, a firm that used to pay on the 15th now pays 14 days earlier.
Data: UAE government portal u.ae (updated 14 October 2026), EY, Baker McKenzie, DLA Piper, The National, Khaleej Times, Gulf News and Arabian Business, May to October 2026. FOUAE calculations are marked. This is an explainer, not legal advice.
In short
- Wages for one month are due on the 1st of the next month, with no grace period.
- An employer complies if at least 85 percent of the total wages due arrive on time.
- Measures build in steps, from alerts on day 2 to possible travel bans from day 21.
What is the UAE salary rule?
The UAE salary rule is Ministerial Resolution No. 340 of 2026 on the Wage Protection System (WPS). The Ministry of Human Resources and Emiratisation (MOHRE) issued it on 12 May 2026. It says salaries for the previous month are due on “the first day of each Gregorian month”, the u.ae payment of wages page states.
WPS is the electronic system private employers use to pay staff through approved banks and exchange houses. More than AED 37 billion in wages pass through it each month, from about 600,000 companies, the ministry said, The National reported in June.
What changed from the old rule
The new resolution repealed Resolution 598 of 2022. Under that text, the payday followed each employment contract. An employer counted as late only if wages were not paid “within 15 days of the due date”.
Now one date applies to every employer in scope. Payments after the 1st are “delayed”, Baker McKenzie, the law firm, notes, so the 15-day window has gone.
How the 85 percent test works
Under the UAE salary rule, employers must transfer “at least 85 per cent of the total wages due to their employees on time”, u.ae states. It adds that this applies “where lawful deductions apply”.
Under the old resolution, the threshold was 80 percent.
FOUAE example: a company with a monthly payroll of AED 300,000 must have at least AED 255,000 reach staff by the 1st. The 85 percent mark is a compliance test. The remaining 15 percent is still part of the wage.
What happens if a salary is late?
MOHRE has set out a ladder of measures, counted from the due date. The EY tax alert of 26 May and the u.ae penalty table list broadly the same steps.
- Day 2: electronic alerts and notifications go to the employer.
- From day 5: the firm cannot get new work permits, and the owner is warned to pay.
- Day 11: for a repeat delay within six months, a fine applies and the firm drops into the Third Category, the tier for violating firms. Baker McKenzie reads the fine as AED 1,000 per affected worker, capped at AED 20,000.
- On day 16: MOHRE opens labour disputes automatically and suspends permits at firms with 25 or more workers, or at related firms in sectors such as construction and cleaning.
- Day 21: smaller firms face an order to pay and larger ones a collective dispute. Asset attachment and a travel ban on the person in charge are possible.
Khalil Al Khoori, a MOHRE undersecretary, said in June, The National reported: “Companies will receive notifications and emails to remind them about the payment.”
What workers can do
For employees, the UAE salary rule mainly changes what counts as late. Workers can file a confidential “My Salary Complaint” or a formal labour complaint, Gulf News reported on 5 October. MOHRE’s call centre is 80084. Staff of free zone firms outside MOHRE’s remit should contact their free zone authority.
That said, a late salary does not by itself entitle a worker to compensation. “You do not automatically get extra compensation just because your salary was paid late,” said Salam Pappinissery, chief executive of Yab Legal Services, in the same Gulf News guide. He said workers may claim actual losses, such as bank charges, with evidence.
Who the UAE salary rule does not cover
The UAE salary rule covers private firms registered with MOHRE. DLA Piper says it also reaches free zones whose companies are subject to WPS, naming Jebel Ali Free Zone (JAFZA) and the Dubai Multi Commodities Centre (DMCC). By contrast, companies licensed in DIFC and ADGM sit under their own employment regimes.
Among other exemptions, u.ae lists:
- workers whose wage claim is already before a court, or who are under a work abandonment report
- workers on documented unpaid leave, seafarers, and holders of mission permits of up to three months
- banks and financial institutions, places of worship, and Emirati-owned fishing boats and public taxis
What MOHRE clarified in October
First, MOHRE confirmed that its system flags delays and sends alerts before any penalty, Gulf News reported on 1 October. The ministry said the decision “does not introduce new substantive obligations for employers”.
Second, MOHRE has onboarded seven more financial institutions to the WPS network, Arabian Business reported on 27 October. They are First Abu Dhabi Bank, Emirates NBD, Mashreq, Dubai Islamic Bank, Ajman Bank, Lari Exchange and First Gulf Exchange Centre. MOHRE said employers “now have wider and more flexible options for paying workers’ wages.”
What the UAE salary rule means for founders
The FOUAE calculation. Take a firm whose contract payday was the 1st and which used the old window to pay on the 15th. It must now pay 14 days earlier. On a payroll of AED 300,000, holding that cash for 14 extra days gives up about AED 449 a month in interest, using the Central Bank’s 3.90 percent base rate as a proxy.
That is a floor, because overdrafts usually cost more, as our analysis of UAE bank lending explains. In practice, timing matters more than interest, because firms that wait for client payments now face a hard date. Mayank Patel of Adecco said “cash flow planning must now become proactive rather than reactive”, Khaleej Times reported in May.
The calendar also matters this week. October wages fall due on Sunday 1 November, a UAE weekend day. Firms whose banks do not process transfers at weekends will therefore need to send payroll earlier. Baker McKenzie says early payment is understood to be accepted in practice, though the resolution does not say so.
For wider rules on contracts and pay, see our guide to UAE labour law. Our explainer on the UAE minimum wage covers the pay floor that runs through the same system.
The verdict on the UAE salary rule
The UAE salary rule replaced a contract-based payday with one national date. Workers gain a clear standard and a visible ladder of consequences. Employers lose the old 15-day buffer, so payroll needs cash in place before the month turns. Five months in, MOHRE is refining the system, not the rule.
Frequently Asked Questions
Ministerial Resolution 340 of 2026 requires private employers to pay the previous month’s wages through WPS by the first day of each month. Employers comply if at least 85 percent of total wages due arrive on time.
MOHRE alerts the employer from day 2. From day 5, the firm cannot get new work permits, and repeat offenders within six months face fines from day 11. Workers can file a confidential My Salary Complaint or a formal labour complaint with MOHRE.
No. DIFC and ADGM companies have separate employment regimes. Free zone firms subject to WPS, such as those in JAFZA and DMCC, are covered, according to DLA Piper.
Sources
Sources: u.ae, Payment of wages, updated 14 October 2026; MOHRE, Ministerial Resolution 598 of 2022; EY, UAE introduces enhanced Wage Protection System, 26 May 2026; Baker McKenzie, UAE: New resolution impacting payroll, June 2026; DLA Piper, UAE introduces stricter salary payment rules, May 2026; The National, Late-paying UAE companies face asset seizures and travel bans, 4 June 2026; Khaleej Times, UAE’s new salary rule: firms scramble to meet June 1 deadline, 21 May 2026; Gulf News, UAE outlines action against employers for late salaries, 1 October 2026, and salary complaint guide, 5 October 2026; Arabian Business, UAE expands Wages Protection System with 7 new financial partners, 27 October 2026; Central Bank of the UAE, base rate decision, 16 September 2026. The AED 255,000 threshold and the 14-day funding cost are FOUAE calculations. This is general information, not legal advice.
Founders of UAE (FOUAE) is an independent, digital-first business publication covering the founders, companies and economy of the United Arab Emirates. Follow FOUAE on Instagram and LinkedIn.
