According to Velocity Global's employment agreement template, when is the salary due in the United Arab Emirates?

In the United Arab Emirates, our employment agreement template states that the salary is payable monthly.

What date does the law specify salary must be paid in the United Arab Emirates?

In the United Arab Emirates, the employer is required to pay the worker's salary starting from the first day of the month following the registered payday specified in the employment agreement. If the employment agreement does not specify a payday, the employee must receive their wage at least once a month. The salary must be processed by the 10th of the following month. Employers are considered late in paying wages if not paid within 15 days from the due date, unless otherwise specified in the employment agreement.

How is salary calculated and what components does it consist of in the United Arab Emirates?

In the United Arab Emirates (UAE), the labor law does not specify the components that should make up an employee’s salary; there are no defined statutory components. However, certain fixed components are commonly included:

• Basic Salary
• House Rent Allowance
• Transport Allowance
• Other Allowances

Usually, there are three primary allowances: basic, housing, and transport. The only legal stipulation is that the basic salary must constitute at least 50% of the total monthly salary. Typically, salaries are structured as follows:

• 60% Basic Salary
• 30% Housing Allowance
• 10% Transport Allowance

The specific structure of the rest of the salary is decided by the employer and employee as per their employment agreement.

Is there a legal obligation to pay salaries in the same month in the United Arab Emirates?

In the United Arab Emirates, there is a legal obligation to pay salaries at least once a month for staff. However, if a new hire joins after the cut-off time, there are no issues with processing their payroll in the following month.

How many salary payments are made per year in the United Arab Emirates?

In the United Arab Emirates, there are 12 salary payments made per year, corresponding to monthly payments. If the period is not specified in the employment agreement, the employee must be paid at least once a month.

Is salary payment monthly and is payment standard at the end of the month in the United Arab Emirates?

In the United Arab Emirates, salary payments are made monthly at the end of each month.

Should the employment agreement in the United Arab Emirates specify salary in monthly or annual amounts?

In the United Arab Emirates, employment agreements can specify salary amounts in either monthly or annual terms. The template for our employment agreements includes both annual and monthly salary figures.

What tax and social security obligations do employees have in the United Arab Emirates?

Employees in the United Arab Emirates do not have any income tax obligations, as there are no income taxes in the UAE.

What are the details of the customary bonuses, including the 13th or 14th-month salary, and when are these payments typically made in the United Arab Emirates?

In the United Arab Emirates, there is no legal requirement for employers to provide bonus payments, such as a 13th or 14th-month salary, to employees. However, it is customary for employers to offer an annual bonus to employees.

What is the minimum wage information in the United Arab Emirates?

In the UAE, the Labour Law does not stipulate a specific minimum salary, but it broadly requires that salaries must cover the basic needs of employees.

The end-of-service gratuity is calculated on the final basic salary, so companies should not keep this artificially low to reduce their future liabilities.

The general expectation is that the basic salary should not be less than 60 per cent of the total remuneration package.

If it is less than 50 per cent, the employee would have a strong claim for unfair treatment at the Labour Court if they choose to challenge it.