If you run a business in the UAE and pay staff through the Wage Protection System (WPS), the rules you relied on for years changed on 1 June 2026. Ministerial Resolution No. 340 of 2026, issued by the Ministry of Human Resources and Emiratisation (MOHRE), replaced the old Resolution No. 598 of 2022 and tightened the salary-payment timetable significantly.
The headline change is simple but consequential: wages for the preceding Gregorian month must now be paid by the first day of each Gregorian month, and any payment made after that date is immediately treated as delayed. The 15-day grace period that employers used to enjoy is gone.
This guide from اكسريرو (Xrero) walks through exactly what the WPS is, what changed in 2026, the day-by-day consequences of paying late, and the compliance threshold every establishment now needs to hit. (Note: Xrero is a Dubai-based business software company and is not affiliated with Xero, the New Zealand accounting company.)
Key takeaway: Under Resolution 340/2026, wages are due on the 1st of each month with no grace period, and an establishment must transfer at least 85% of total wages by the deadline to be considered compliant. Late payment triggers a day-based escalation of warnings, work-permit suspensions and fines — so payroll timing now matters more than ever.
What is the WPS and who must use it?
The Wage Protection System is an electronic salary-transfer system jointly run by MOHRE and the Central Bank of the UAE. Salaries are routed through approved banks, exchange houses and financial institutions (authorised WPS agents) and matched against a structured electronic file so the ministry can verify that wages were paid in full and on time.
That file is the SIF (Salary Information File). Each pay cycle, the employer (via its WPS agent) uploads a SIF containing, for every employee: the labour-card number, the employer Establishment ID, the salary breakdown (basic, allowances, deductions) and the pay-period dates. MOHRE uses this file to confirm wages reached employees as declared.
WPS is mandatory for essentially all private-sector establishments registered with MOHRE (and applies in JAFZA). Application to some free zones such as DMCC and JAFZA has been described as still being clarified. Importantly, the previous exemption that gave new hires their first 30 days outside WPS has been removed — new employees are now immediately subject to WPS.
What changed on 1 June 2026?
Resolution 340/2026 introduced a unified, stricter pay calendar. Here is the before-and-after at a glance.
| Rule | Old (Resolution 598/2022) | New (Resolution 340/2026) |
|---|---|---|
| Payment deadline | Wage due from the 1st of the following month | Paid by the 1st day of each Gregorian month |
| Grace period | Late only if unpaid within 15 days after due date | No grace period — late the moment the 1st passes |
| Compliance threshold | 80% of wages | 85% of total wages due |
| New-hire exemption | First 30 days exempt | Removed — WPS applies immediately |
The new 85% compliance threshold
An establishment is treated as compliant if it transfers at least 85% of total wages due by the deadline, with any shortfall arising only from lawful deductions. This is up from the previous 80% threshold and, in practice, caps permissible deductions at around 15%. Note that this is a compliance metric only — employees retain their full legal right to any unpaid balance regardless of the percentage figure.
What happens if you pay late? The MOHRE escalation timeline
Consequences for late payment now escalate on a day-based timeline. The steps below are consistently reported by UAE law firms and major newspapers; the later measures (Day 16 and Day 21) are reported as weighted toward larger establishments and serious or repeat cases.
| Timeline | Consequence |
|---|---|
| ~Day 2 | Electronic warnings issued to the establishment |
| Day 5 | New work-permit issuance suspended |
| Day 11 | Administrative fines; downgrade to Third Category for repeat violations |
| Day 16 | Automatic labour-dispute registration and broader permit suspension |
| Day 21 | Precautionary asset attachment, travel bans on responsible persons, Public Prosecution referral |
Crucially, outstanding violations block work-permit renewals across the entire establishment file — not just for the affected worker — which can freeze your ability to hire, renew or transfer staff company-wide.
A note on the AED fine amounts
You may see specific figures quoted elsewhere — commonly AED 5,000 per affected worker (capped at AED 50,000 per incident) for late wages, and AED 1,000 per employee for false SIF information. Treat these as indicative. Resolution 340/2026 itself sets the deadline, the 85% rule and the escalation steps; it does not restate AED figures. Those amounts derive from the pre-existing cabinet penalty schedule and appear mainly in secondary advisory sources, so verify the exact amounts against the official MOHRE penalty schedule before relying on them.
Who is exempt from the on-time-payment rule?
Several categories are exempt from the on-time-payment violation. These include:
- Foreign employees of foreign establishments paid outside the UAE (with ministry approval)
- Workers in active court wage disputes
- Reported absconding or absent workers
- Detained or judicially-restricted employees
- Those on approved unpaid leave
- Seafarers and fishing-boat crews
- Citizen-owned taxis
- Short-term mission permit holders (3 months or less)
- Certain sectors, including banks and financial institutions, and places of worship
Your 2026 WPS compliance checklist
- Move payroll cut-off earlier. Build in time so the salary transfer clears by the 1st — there is no longer a 15-day buffer to absorb delays.
- Hit the 85% threshold every cycle. Ensure at least 85% of total wages due reach employees by the deadline; keep any shortfall limited to lawful deductions.
- Onboard new hires into WPS immediately. The first-30-days exemption is gone.
- Validate your SIF before upload. Confirm labour-card numbers, Establishment ID, salary breakdowns and bank routing details are correct so the file is not rejected.
- Track exemptions accurately. Flag genuinely exempt workers so they are not wrongly counted against your compliance rate.
- Keep clean records. Maintain a clear audit trail of pay dates and amounts in case of a dispute or review.
How Xrero helps
The 2026 rules make payroll a timing problem as much as a calculation problem — and that is precisely where Xrero is built to help. Xrero is an all-in-one cloud ERP and accounting platform for the UAE that handles UAE payroll end to end.
Xrero generates WPS 2.0 SIF files with the correct structure — labour-card numbers, Establishment ID, salary breakdown and bank routing — so your file is ready to hand to your WPS agent without manual rework. By running payroll inside one system, you can keep your pay cycle on schedule and aim to clear the 1st-of-month deadline comfortably. Xrero also calculates end-of-service gratuity, so the same platform that pays staff on time also handles their final settlement correctly.
None of this makes Xrero a regulator or a substitute for one — it is software that helps you produce accurate, on-time payroll records. See how it works on the WPS payroll software page.
Stop chasing the 1st-of-month deadline by hand.
Generate WPS 2.0 SIF files, run on-time payroll and calculate gratuity in one place.
Book a free demoFrequently asked questions
When are salaries now due under the new UAE WPS rules?
Under Ministerial Resolution No. 340 of 2026, effective 1 June 2026, wages for the preceding Gregorian month must be paid by the first day of each Gregorian month. Any payment after that date is immediately treated as delayed.
Is there still a 15-day grace period to pay wages?
No. The 15-day grace period from the old Resolution 598/2022 was removed. Resolution 340/2026 repeals 598/2022, so an employer is now considered late the moment the 1st of the month passes without payment.
What is the 85% WPS compliance threshold?
An establishment is considered compliant if it transfers at least 85% of total wages due by the deadline, with any shortfall arising only from lawful deductions. This is up from the previous 80%. It is a compliance metric only; employees keep their full legal right to any unpaid balance.
What is a SIF file?
The SIF (Salary Information File) is the structured electronic file an employer uploads each pay cycle through an authorised WPS agent. It contains each employee's labour-card number, the employer's Establishment ID, the salary breakdown and the pay-period dates, and is how MOHRE verifies wages were paid in full and on time.
What are the penalties for paying salaries late?
Consequences escalate on a day-based timeline: electronic warnings from around Day 2, suspension of new work permits at Day 5, administrative fines and possible category downgrade at Day 11, automatic labour-dispute registration at Day 16, and asset attachment, travel bans and Public Prosecution referral at Day 21. Specific AED fine amounts circulate online but are not restated in Resolution 340/2026 itself — verify exact figures with MOHRE.
Do new employees have to be on WPS from day one?
Yes. The previous exemption that gave new employees their first 30 days outside WPS was removed under Resolution 340/2026. New hires are now immediately subject to WPS.
This is general information, not tax or legal advice — verify current rules with the FTA (tax.gov.ae) or MOHRE (mohre.gov.ae), or consult a licensed advisor. WPS deadline, threshold and escalation details here are drawn from May–June 2026 reporting and law-firm summaries of Ministerial Resolution No. 340 of 2026; exact AED penalty amounts in particular should be confirmed against the official MOHRE penalty schedule before you rely on them.