You have set up your company, hired your first employee, and everything seems perfect. Then, suddenly, your company file is blocked by the Ministry of Human Resources and Emiratisation (MOHRE). You cannot issue new visas or renew existing ones. Why?
lass=”yoast-text-mark” />>In 90% of cases for new investors, the reason is ignoring the Wage Protection System (WPS).
>In the UAE, paying salaries in cash is not just outdated—it is a compliance violation. In this guide by Tdabeer, we explain how to register for WPS and pay your staff correctly to keep your business safe.
What is WPS?
The Wage Protection System (WPS) is an electronic salary transfer system that allows MOHRE and the Central Bank of the UAE to monitor salary payments. It ensures that workers are paid:
- On time (as per the contract).
- In full (no unauthorized deductions).
- Through official banking channels (no cash).
Who Must Register? (Don’t Assume You Are Exempt)
This is where most new investors get confused.
Mandatory for: All Mainland companies registered with MOHRE, even if you have only one employee.
Exemptions: Free Zone companies are generally exempt (unless the specific Free Zone authority requires it), and shareholders/partners who are not on the employee payroll.
The Consequences of Non-Compliance
Failing to pay salaries through WPS triggers automatic penalties. The system is automated, so there is no “talking your way out of it”:
| Delay Period | Penalty / Action |
|---|---|
| 15 Days Late | Company Block (Cannot issue new work permits). |
| 30 Days Late | Companies with 50+ employees may face judicial referral. |
| 60 Days Late | AED 5,000 fine per employee (up to AED 50,000). |
| Fake WPS Payment | AED 20,000 fine per employee for fraudulent transactions. |
How to Register and Pay Salaries?
The process is simple once set up:
- Open a Corporate Bank Account: You need a UAE bank account.
- Contract with a WPS Agent: This can be your bank or an Exchange House (e.g., Al Ansari, Lulu Exchange). Exchange houses are often cheaper and easier for SMEs.
- Prepare the SIF File: Every month, you create a “Salary Information File” (SIF) – a simple .CSV format containing Employee ID, Salary Amount, and Days Worked.
- Send the File: Upload the SIF to your agent, transfer the total amount, and they distribute the salaries.
Common Newbie Mistakes
- Paying in Cash: Even if your employee signs a receipt, MOHRE does not recognize it. You must pay via WPS.
- Paying Less than 80%: If you transfer less than 80% of the registered salary (due to deductions), the system might flag it. Always document valid deductions.
- Forgetting to Pay Yourself: If you are on an “Employee Visa” (Manager) in your own mainland company, you technically need to pay yourself through WPS too!
How Tdabeer Helps You Stay Compliant
Managing payroll can be a headache. Tdabeer offers PRO & Compliance Services where we:
- Register your company with WPS.
- Review your employment contracts to match WPS data.
- Help lift blocks if you are already penalized.
Read Also for Smooth Operations
Is Your Company Blocked?
Don’t panic. We can help you resolve salary delays, pay the fines, and lift the block on your trade license quickly.
