UAE HR Glossary · 2026

UAE HR & Payroll Glossary

Plain-English definitions of the UAE HR, payroll and labour-law terms that come up most — each aligned to UAE Labour Law (Federal Decree-Law No. 33 of 2021) and current MOHRE rules.

Pay & Salary End of Service Payroll & WPS Compliance Emiratisation & Contracts Leave & Time Off

Pay & Salary

Basic Salary: The fixed core component of an employee's wage, before allowances. Under UAE Labour Law it is the base used to calculate gratuity, leave salary and overtime, so its proportion of total pay matters. It is typically 50–60% of the total salary.Salary Calculator
Gross Salary: The total monthly pay before any deductions — basic salary plus allowances (housing, transport, etc.). It is what the employer commits to in the contract, not necessarily what drives end-of-service benefits.
Allowances: Additional payments on top of basic salary, commonly housing, transport and general allowances. Allowances are generally excluded from gratuity and leave-salary calculations, which are based on basic salary.
Leave Salary: The wage paid to an employee during annual leave, or encashed for untaken leave on exit. The MOHRE formula is Basic Salary ÷ 30 × number of leave days.Leave Salary Calculator
Overtime: Work beyond normal contracted hours. Under Federal Decree-Law No. 33 of 2021 it is paid at 125% of the normal hourly wage (day) or 150% (night / rest-day work), calculated from basic salary.Overtime Calculator

End of Service

Gratuity (End-of-Service Benefit): A lump sum owed to an employee on leaving, based on length of service and basic salary: 21 days' basic pay per year for the first five years and 30 days' per year thereafter, under Federal Decree-Law No. 33 of 2021. Full gratuity now applies on resignation too.Gratuity Calculator
Final Settlement: The full amount due to an employee on exit: gratuity plus any unpaid wages, leave encashment, notice-period pay and approved reimbursements, less lawful deductions.End of Service Calculator
Notice Period: The advance notice either party must give to end an employment contract — typically 30 to 90 days in the UAE. Pay in lieu of notice may apply if the period is not worked.
Probation Period: An initial trial period of up to 6 months in the UAE, during which either party can end the contract with shorter notice (14 days by the employer in most cases). Gratuity does not accrue for time that does not count as continuous service.

Payroll & WPS Compliance

WPS (Wage Protection System): A UAE electronic salary-transfer system, overseen by MOHRE and the Central Bank, that ensures employees are paid correct wages on time through approved banks and exchange houses. Non-compliance carries fines and permit suspensions.WPS Fine Calculator
SIF (Salary Information File): The standardized file employers submit through WPS containing each worker's salary details. It must follow the exact MOHRE format to be accepted by the bank or exchange house.WPS SIF Generator
MOHRE: The Ministry of Human Resources and Emiratisation — the UAE federal authority that regulates private-sector employment, work permits, WPS and labour disputes.
Payslip: An itemized statement of an employee's pay for a period, showing basic salary, allowances, deductions and net pay. Good practice (and increasingly expected) for transparency and WPS record-keeping.
GPSSA: The General Pension and Social Security Authority — administers pension and social-security contributions for UAE and GCC national employees. Emiratis in the private sector are registered here rather than accruing gratuity.

Emiratisation & Contracts

Emiratisation (Tawteen): The UAE policy requiring private-sector companies with 50+ employees to fill a rising share of skilled roles with UAE nationals — 10% by end of 2026 — supported by the Nafis programme, with monthly penalties for shortfalls.Emiratisation Calculator
Nafis: The UAE federal programme that supports Emiratisation by subsidising salaries, training and pension contributions for Emiratis employed in the private sector.
Limited (Fixed-Term) Contract: Since the 2022 reforms, all UAE private-sector contracts are fixed-term (limited), renewable by agreement. Gratuity and end-of-service rules apply on completion, renewal or early exit.Limited Contract Gratuity
Labour Card / Work Permit: The MOHRE-issued authorization that allows a foreign national to work legally for a specific employer in the UAE, tied to the employment contract and residence visa.
Labour Ban: A restriction that can prevent an employee from taking new employment for a period after leaving a job. Under current rules, unrestricted work-permit mobility has reduced the scope of bans, but specific cases still apply.

Leave & Time Off

Annual Leave: Paid yearly leave: 30 calendar days per year after one year of service (and 2 days per month between 6 months and 1 year) under UAE Labour Law. Untaken leave is encashed at basic salary on exit.Annual Leave Calculator
Public Holidays: Federally declared days off that apply across all seven emirates to both public and private sectors. They are separate from annual leave; working one entitles the employee to a substitute day or extra pay.
Sick Leave: Statutory leave for illness after probation — up to 90 days per year in the UAE, paid on a sliding scale (first 15 days full pay, next 30 half pay, remainder unpaid).
Maternity Leave: Paid leave for childbirth under UAE Labour Law — 60 days (45 at full pay, 15 at half pay), with additional conditions for medical complications.

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