Payroll in the UAE 2026: GPSSA pension, gratuity, WPS and ILOE

In the UAE there is no personal income tax and expatriate employees pay no social security, so for most staff gross pay equals net pay. Deductions apply to Emiratis, who pay 11% into the GPSSA pension while the employer pays 15%, and to GCC nationals under their home schemes. For expatriates the employer accrues an end-of-service gratuity instead.

Payroll in the UAE at a glance

Pension and social security contributions

Social security in the UAE is a pension system for UAE nationals. Expatriate employees are not covered and nothing is deducted from their pay.

Which GPSSA law applies. Federal Decree-Law No. 57 of 2023 covers Emiratis who join the labour market for the first time on or after 31 October 2023: a total contribution of 26% of the pensionable salary. Emiratis already insured before that date stay under Federal Law No. 7 of 1999, with a total of 20%. Register each Emirati with the GPSSA and start contributions within one month of the work permit being issued.

Abu Dhabi. Emiratis working for employers in the emirate of Abu Dhabi, in the public or private sector, belong to the Abu Dhabi Pension Fund. Since its 2023 amendments, newly insured members pay 11% and employers 15%, with a maximum salary of AED 100,000; the rates of members insured before did not change.

GCC nationals. Citizens of other GCC states working in the UAE keep their home country's pension cover under the GCC insurance protection extension (Cabinet Resolution No. 18 of 2007). The employer pays the contributions due under the home country's rules, and the employee bears any additional difference.

Unemployment insurance (ILOE)

The Involuntary Loss of Employment scheme is compulsory for employees in the private sector and the federal government. The employee pays the premium for the basic package: at most AED 5 a month with a basic salary below AED 16,000 and at most AED 10 a month above it. After at least 12 months of subscription, an employee who loses their job for reasons other than resignation or disciplinary dismissal receives 60% of the subscription salary for up to three months, capped at AED 10,000 or AED 20,000 a month. Investors in their own company, domestic workers, employees on temporary contracts, under-18s and Emiratis who meet the retirement conditions are exempt; not subscribing costs a fine of AED 400.

Income tax on salaries

The UAE does not levy income tax on individuals. Employers withhold no tax from salaries and file no payroll tax returns, whatever the employee's nationality. For an expatriate without other deductions, the payslip shows the same gross and net pay.

Minimum wage, working time and end-of-service gratuity

• Minimum wage: the Labour Law sets no minimum salary, but wages must cover employees' basic needs. Under the Emiratisation rules, Emiratis in the private sector must earn at least AED 6,000 a month from 1 January 2026.
• Working time: at most 8 hours a day or 48 hours a week, reduced by 2 hours a day in Ramadan.
• Overtime: at most 2 hours a day, paid at the hourly rate of the basic salary plus 25%, or plus 50% for work between 10 pm and 4 am; work on a rest day earns a substitute day off or the hourly rate plus 50%.

End-of-service gratuity

Under Article 51 of Federal Decree-Law No. 33 of 2021, a full-time worker with at least one year of continuous service receives an end-of-service gratuity on leaving:

Parts of a year count proportionally and unpaid absences do not count. The gratuity is based on the last basic salary, not housing or transport allowances, and must be paid with other dues within 14 days of the end of the contract. Emiratis in the private sector are covered by the pension law instead. Employers can instead join the voluntary savings scheme, paying 5.83% of basic salary a month for employees with under five years of service and 8.33% after that into an approved fund.

Monthly payroll calendar and filings

• Salaries: pay through the WPS on the due date in the employment contract; MOHRE applies penalties when salaries are late. Wages can be paid in dirhams or, if the contract says so, another currency.
• Pension: register Emirati employees with the GPSSA (or the Abu Dhabi Pension Fund) within one month of the work permit and pay the employee and employer contributions every month; register GCC nationals under the GCC extension.
• ILOE: make sure every employee who is not exempt has subscribed and keeps paying the premium.
• Gratuity: accrue the end-of-service gratuity for expatriates every month so the liability is in your books.
• Emiratisation: companies with 50 or more employees must raise the share of Emiratis in skilled jobs by 2% a year; smaller companies in listed sectors have hiring targets too.

Worked example: AED 15,000 a month

Two private-sector employees in Dubai, each paid AED 15,000 a month: basic salary AED 10,000 and housing allowance AED 5,000. The Emirati employee joined the labour market after 31 October 2023, and the whole AED 15,000 is taken as pensionable salary.

For the expatriate, the employer also accrues the end-of-service gratuity: 21 days of the AED 10,000 basic salary for each of the first five years of service. The expatriate pays the ILOE premium, at most AED 5 a month on a basic salary of AED 10,000, from their own pay.

Common mistakes

1. 1Deducting pension from expatriates: only UAE and GCC nationals contribute.
2. 2Using the wrong GPSSA law: Emiratis already insured before 31 October 2023 stay on the 5% and 12.5% rates of the 1999 law.
3. 3Charging the employer 15% for a private-sector Emirati earning below AED 20,000, when the government pays 2.5 points of it.
4. 4Calculating gratuity on total pay instead of basic salary, or forgetting the two-year cap.
5. 5Paying an Emirati in the private sector below AED 6,000 a month from 2026.
6. 6Paying salaries outside the WPS, which triggers MOHRE penalties.

How Clientlly helps

Clientlly ships a built-in payroll profile for the United Arab Emirates, checked against official sources in October 2026. It has no income tax, calculates expatriate employees without social security, and applies the pension scheme that matches the employee's nationality: the GPSSA under Federal Decree-Law No. 57 of 2023 or Federal Law No. 7 of 1999 for Emiratis (chosen on the employee or by hire date), the Abu Dhabi Pension Fund when it is chosen on the employee, and the home-country schemes of GCC nationals, each with its employee and employer rates and contribution ceilings. Clientlly calculates gross to net and the employer contributions, produces payslips, and supports recurring payroll adjustments and imports of employees and payroll data; an administrator can adjust the rates in the payroll tax settings.

The profile models one employee in a primary job, single, without dependants, at federal level, so the employee's actual scheme, Emiratisation rules and personal circumstances must be checked; the end-of-service gratuity and ILOE premiums are outside the payroll calculation.

Alongside payroll, the human resources module handles leave requests and approvals with a leave calendar and keeps HR documents, and attendance and time tracking records working hours and overtime. To close the books after the payroll run, see our month-end close checklist.