UAE WPS Compliance Guide 2025: Wage Protection System

The Wage Protection System is a mandatory electronic salary payment system that tracks all private sector salary payments in the UAE. It was designed to protect workers' rights and ensure timely wage payments.

Key Objectives

• Ensure employees receive wages on time
• Prevent wage disputes between employers and employees
• Create a database for tracking salary payments
• Enable MOHRE to monitor compliance
• Protect workers from exploitation

Mandatory Coverage

WPS compliance is mandatory for:

• All private sector companies registered with MOHRE
• Companies in Jebel Ali Free Zone (JAFZA)
• Establishments with 1 or more employees

Exemptions

The following are exempt from WPS:

• Federal and local government entities (have own systems)
• Domestic workers (governed by separate regulations)
• Employees of certain free zones (may have own requirements)

Step 1: Open Corporate Bank Account

• Open account with a UAE bank approved for WPS transactions
• Ensure bank offers WPS services
• Maintain sufficient funds for payroll

Step 2: Register with WPS Agent

Register with an authorized WPS agent:

• Commercial banks
• Exchange houses
• Financial institutions authorized by Central Bank

Step 3: Set Up Salary Transfer System

• Configure payroll system to generate compliant files
• Set up automated transfers
• Test system before first payroll run

Step 4: Employee Account Setup

Ensure all employees have:

• UAE bank account, OR
• Prepaid payroll card from approved provider, OR
• Exchange house account for cash collection

The Salary Information File is a standardized electronic file containing salary payment details that employers must submit through WPS.

Required Information in SIF

SIF File Format

• Standard format prescribed by MOHRE
• CSV or XML format (varies by agent)
• Must match employee records in MOHRE system

Payment Deadlines

Coverage Thresholds

To maintain compliance, employers must ensure:

• Minimum 70% of employees are paid through WPS
• Minimum 75% of total wages are processed through WPS

Payment Methods

All WPS payments must go through:

1. Bank transfer to employee's UAE bank account
2. Prepaid payroll cards issued by authorized providers
3. Exchange house accounts for cash collection

Cash payments are NOT compliant with WPS requirements.

Financial Penalties

Administrative Consequences

Impact on Operations

Non-compliant employers face:

• Inability to hire new employees
• Inability to renew existing work permits
• Blocked labor transactions
• Negative company classification

Error: Employee Not Found in System

Cause: Employee labor card number doesn't match MOHRE records

Solution:

• Verify labor card number
• Update employee record in MOHRE if needed
• Contact MOHRE for discrepancies

Error: Invalid Bank Account

Cause: Incorrect IBAN or closed account

Solution:

• Verify IBAN with employee
• Get new bank letter if needed
• Update payroll system

Error: Amount Mismatch

Cause: Salary in SIF doesn't match contract registered with MOHRE

Solution:

• Reconcile contract salary with actual payment
• Update MOHRE records if salary changed
• Document approved salary changes

Error: Duplicate Entry

Cause: Same employee listed twice in SIF

Solution:

• Review SIF for duplicate records
• Remove duplicate entries
• Regenerate file

Monthly Requirements

• Calculate accurate salaries for all employees
• Prepare SIF file with correct information
• Submit SIF to WPS agent by deadline
• Ensure sufficient funds in bank account
• Process salary transfers
• Verify all payments completed successfully
• Retain records and confirmation receipts

Quarterly Review

• Reconcile WPS records with MOHRE employee list
• Update any employee banking changes
• Review compliance reports from WPS agent
• Address any discrepancies flagged

Annual Requirements

• Audit WPS compliance
• Update employee records in MOHRE system
• Review and update payroll processes
• Train new HR staff on WPS requirements