UAE WPS Compliance 2026: Your Guide to Ministerial Resolution No. 340

If your UAE payroll used to land on the 10th or the 15th, June 2026 moved your deadline. Under Ministerial Resolution No. 340 of 2026, wages for each month are now due through the Wage Protection System (WPS) on the 1st of the following Gregorian month. Any later payment counts as delayed. To stay compliant, you need to transfer at least 85% of total wages by that date and keep records that prove it. This guide covers what changed, who is covered, how penalties escalate, and how to rebuild your payroll calendar.

What Is the UAE Wage Protection System?

The Wage Protection System is the electronic salary transfer framework the Ministry of Human Resources and Emiratisation (MOHRE) uses to track private-sector wage payments. Salaries move through banks, exchange houses, and other financial institutions approved by the Central Bank of the UAE.

In practice, your payroll team prepares a Salary Information File (SIF) for each run. Next, the file goes to your WPS agent along with the funds. The agent then credits employee accounts and reports the transfer to MOHRE. Since the ministry sees every transfer, a late or short payment shows up on its side without anyone filing a complaint.

That visibility is why WPS compliance depends so heavily on your payroll calendar. If approved numbers reach the agent late, the system records the delay. For a refresher on how a pay run fits together, read our guide to payroll calculation and processing.

What Changed Under Ministerial Resolution No. 340 of 2026?

MOHRE issued Ministerial Resolution No. 340 of 2026 on 12 May 2026, and it took effect on 1 June 2026, according to EY’s tax alert. It also repealed Ministerial Resolution No. 598 of 2022, which had governed WPS until then.

The core change is a single national due date. Wages for the preceding Gregorian month are due on the first day of each Gregorian month. A payment made after that date counts as a delay. Under the previous framework, due dates followed each employment contract, and employers had a 15-day grace period before a payment was treated as late.

The table below sets the two regimes side by side.

Area	Before 1 June 2026 (Resolution 598 of 2022)	From 1 June 2026 (Resolution 340 of 2026)
Salary due date	Set by each employment contract	1st day of the following Gregorian month
Grace period	15 days before a payment counted as late	None; any payment after the 1st is delayed
Establishment threshold	80% of total wages paid on time	85% of total wages paid on time
Employee threshold	Paid if at least 80% of wages received	Paid if at least 85% received, with any gap from lawful deductions
New joiners	Exempt for the first 30 days	In scope from the first pay cycle

Sources: Morgan Lewis, BLK Partners via Mondaq.

According to Morgan Lewis, the employers most affected are those that pay monthly in arrears around the middle of the month. The firm also understands that paying at month-end, ahead of the 1st, will count as compliant. The resolution itself does not state this outright. For that reason, most payroll teams now target the last working days of the month.

Who Must Comply With the New WPS Rules?

Resolution 340 applies directly to all private-sector companies licensed with MOHRE. The due date applies whatever your size, so a 20-person consultancy and a 2,000-person contractor work to the same 1st-of-month deadline.

Free Zone Companies

Free zones are less settled. Morgan Lewis notes that some free zones run their own WPS arrangements, such as the Dubai Multi Commodities Centre and the Jebel Ali Free Zone. It remains to be seen whether they will update their salary transfer rules. Financial free zones such as DIFC and ADGM run their own employment laws.

If you operate a free zone entity, confirm the position with your free zone authority. Until you hear otherwise, plan as if the 1st-of-month rule applies.

Workers and Establishments Outside the WPS Calculation

According to a summary by law firm BLK Partners, Article 4 of the resolution places these categories outside WPS:

• Workers whose wage claims sit with a competent court or are subject to an executive instrument
• Workers against whom an absconding report has been filed
• Workers whose liberty a competent authority has restricted
• Workers on approved unpaid leave, provided MOHRE has been notified and documents submitted
• Seafarers working on ships
• Foreign workers employed by foreign establishments and paid outside the UAE
• Workers on mission work permits of three months or less
• Fishing boats and public taxis owned by individual citizens
• Banks and financial institutions
• Places of worship

Two of these carry conditions. The unpaid leave exclusion works only when the MOHRE notification and documents are on file. Similarly, the foreign-worker exclusion requires a request from the establishment and the employees’ approval, as Morgan Lewis explains.

How the 85% Compliance Rule Works

Resolution 340 measures compliance at two levels, both set out in the Morgan Lewis analysis.

At the establishment level, you are compliant if you transfer at least 85% of the total wages due to your workers by the due date. At the employee level, a worker counts as paid if they receive at least 85% of their wages. Any shortfall must come from lawful deductions or withholdings under UAE labor law.

A Worked Example

Say your UAE entity has 40 employees and a monthly wage bill of AED 400,000. To pass the establishment test, at least AED 340,000 must reach employees through WPS by the 1st. The test looks at wage value rather than headcount. As a result, paying 34 of 40 people on time may still fall short if the six late salaries are among the largest.

Now take one consultant on AED 20,000 a month. To count as paid, they must receive at least AED 17,000, and the AED 3,000 gap must come from a documented, lawful deduction.

What It Means for Deductions

UAE labor law allows deductions of up to 20% of salary in some cases. Where several deduction grounds apply at once, the cap rises to 50%. For WPS purposes, however, Morgan Lewis notes that the resolution in practice limits deductions to 15% of an employee’s monthly wage. If you recover salary advances or loans through payroll, check each schedule against that ceiling.

The threshold also leaves the employee’s full entitlement in place. Article 2 applies without prejudice to a worker’s right to their full wages. Any unpaid balance that is not a lawful deduction therefore remains owed.

WPS Penalties: The Enforcement Timeline From Day 1 to Day 21

The annex to Resolution 340 sets out a staged enforcement ladder. Advisory summaries differ slightly on which measure falls on which day. The table below follows Morgan Lewis, which matches the sequence in KPMG’s flash alert.

Timing	What MOHRE may do
Due date (Day 1)	Electronic monitoring starts for any establishment that has not paid
Day 2	Notifications and warnings go to the non-compliant establishment
Day 5	Issuance of new work permits may be suspended
Day 11	Repeat violations within six months may lead to administrative fines and reclassification into MOHRE’s Third Category
Day 16	MOHRE may register labor disputes automatically and suspend work permits for employers with 25 or more employees, or group companies with at least 25 employees in specific sectors
Day 21	Precautionary attachment, travel bans on responsible individuals, and referral to the Public Prosecution may follow in certain cases

Administrative fines fall under Cabinet Resolution No. 21 of 2020, and the Third Category refers to MOHRE’s establishment classification under Ministerial Resolution No. 209 of 2022, according to BLK Partners.

The practical takeaway is speed. Under the old rules, the 15-day grace period absorbed a short slip. Now a payroll that misses the 1st by a few days can trigger warnings and a freeze on new work permits. For a services firm hiring for a new client project, that freeze can stall delivery.

Group Companies and the Unity-of-Ownership Rule

Resolution 340 applies a unity-of-ownership rule, so workers across establishments with the same owner may be counted together. In other words, spreading headcount across several entities does not reduce exposure. BLK Partners also notes that Public Prosecution referral can happen at any company size. That applies where a delay threatens the stability of the labor market.

Higher-Risk Sectors

Stricter thresholds apply to construction, transport and storage, security services, cleaning services, recruitment agencies, and domestic worker recruitment offices. In these sectors, escalated measures may apply where as few as 25 workers are affected. If you run an engineering, MEP, or staffing business, check whether your licensed activity places you in one of these groups.

Why Services Firms Feel the 1st-of-Month Deadline First

Professional services payroll depends on inputs that close late in the month. Overtime comes from approved timesheets. Approved leave, including unpaid leave, changes gross pay. On top of that, reimbursements often ride along with salary and new joiners start mid-month. Many firms also run UAE and India entities side by side.

With a mid-month pay date, finance had about two weeks after month-end to chase missing timesheets and settle disputes. Resolution 340 closes that window. If approved inputs are still open late in the month, the salary file cannot reach your agent in time.

Most firms fix this in two moves. First, bring the attendance and timesheet cut-off forward, for example to the 20th. Second, carry variable items logged after the cut-off, such as overtime, into the next cycle where your contracts and policies allow it. Avoid treating the 15% gap as a buffer for unfinished work, since only lawful deductions qualify.

Our breakdown of what breaks when a professional services firm crosses 50 employees explains why these handoffs get harder as headcount grows.

UAE WPS Compliance Checklist: 10 Steps for 2026

Use this checklist to move your payroll onto the new calendar. Each step is written for a firm with 25 to 150 employees, though the logic scales in both directions.

1. Map Every Entity in Scope

List each UAE establishment with its MOHRE registration, free zone status, and ownership. Then note which entities share an owner, since their workers may be aggregated for enforcement.

2. Move Your Pay Date to Month-End

Set your transfer date within the last working days of the month. Aiming for the 1st itself leaves no room for a bank delay or a rejected file.

3. Build a Reverse Payroll Calendar

Work backward from the 1st and give every step an owner. The example below suits a monthly cycle, and your own dates depend on your agent’s cut-off times.

Step	Example date	Owner
Attendance, leave, and timesheet cut-off	20th	HR and project managers
Variable pay and reimbursement approval	22nd	Finance and line managers
Payroll run reviewed and approved	24th	Payroll lead
SIF sent to the WPS agent with funding	26th	Finance
Salaries credited to employees	By the last working day	WPS agent

Confirm processing times with your bank or exchange house. Also pull every date earlier when month-end falls on a weekend or public holiday. The advisory summaries of Resolution 340 describe no extension for non-working days, so plan as if none exists.

4. Lock Attendance, Leave, and Timesheet Inputs Before the Cut-Off

Every late input pushes the whole run back. Ask employees to correct their own attendance entries before the cut-off, and lock timesheet periods once managers approve them. Our timesheet management guide covers approval flows in more detail.

5. Document Unpaid Leave and Other Exclusions

Unpaid leave falls outside the WPS calculation only when MOHRE has been notified and has the documents. Record approved unpaid leave in your system and file the notification in the same week. Likewise, keep court referrals and absconding reports on file for the affected workers. A structured leave management system makes this record easy to pull.

6. Check Deductions Against the 15% Ceiling

Review salary advances, loan recoveries, and disciplinary deductions for every employee. Then spread recoveries so that nobody receives less than 85% of their wage in a single month.

7. Pay New Joiners From Their First Cycle

The 30-day exemption for new hires no longer exists. Collect bank details and complete labor records during onboarding, so someone who joins on the 25th still gets paid on time.

8. Validate Employee Records Before Every Run

A salary file that fails validation can push payment past the 1st. Before each run, check IBANs, employee identifiers, and salary figures against bank and MOHRE records. It also helps to route changes to bank and identity details through a second approver.

9. Review Payroll Delegation Agreements

Resolution 340 lets you delegate payroll processing to a third party. MOHRE needs the delegate’s details and the scope of the delegation. Even so, the employer remains responsible for paying on time. Update your service agreement so the provider’s input deadlines match your new calendar.

10. Keep Proof of Payment and Reconcile Every Cycle

The resolution requires documentation that proves wages were paid in line with MOHRE requirements. Keep agent confirmations, SIF copies, and approval records for each cycle. After that, reconcile the payroll register against the agent confirmation and your ledger. Our HR audit guide explains how to test the timesheet, leave, and payroll triangle.

Payroll Setups for WPS Compliance: 4 Options Compared

Whichever agent moves the money, your internal setup decides whether approved numbers reach it on time. The table compares four common setups for a UAE services firm.

Setup	Best fit	Where the WPS risk sits	Month-end effort
Juntrax (HRMS, PSA, and payroll in one platform)	Services firms with 25 to 150 people, often across UAE and other entities	Fewer handoffs, since attendance, leave, timesheets, and payroll share one record	Lower
Standalone payroll software	Firms with stable, salaried teams and few variable inputs	Exports and imports between HR, time, and payroll tools	Medium
Bank WPS portal with spreadsheet payroll	Very small teams on fixed salaries	Formula errors, manual file preparation, and a thin audit trail	Higher
Outsourced payroll provider	Firms without in-house payroll staff	Provider input deadlines, while liability stays with the employer	Medium

If you are also comparing HR platforms for the region, see our roundup of HR software in the UAE.

1. Juntrax

Juntrax is a business operations platform for professional services firms. It brings HRMS, professional services automation, and cash-flow management into one system. For WPS, the benefit sits upstream of the bank. The inputs that decide your payroll live in the same place as the payroll run.

• Entity-scoped payroll runs: The Run Payroll workspace is scoped by company entity and pay cycle, and each run moves through Open, Approved, Processed, and Paid. Your UAE entity can close on its own calendar while other entities keep theirs.
• Approval before processing: Payroll is approved first and processed second, so a reviewer signs off before the numbers go to your WPS agent.
• Self-service attendance corrections: Employees flag incorrect attendance entries and submit corrections before payroll closes, which cuts down on disputes after payslips land.
• Policy-based leave: Leave balances are calculated against each leave plan, and the form warns employees when dates fall outside the notice window.
• Timesheets with lock cut-offs: Timesheet periods lock at the submission cut-off, which suits an earlier WPS calendar.
• Maker-checker on sensitive records: Employees request edits to bank accounts and national IDs, and HR approves each change before the record updates.
• Multi-entity with local rules: Each office runs its own entity, currency, and compliance rules in one instance. For example, Dubai staff see UAE leave rules while Mumbai staff see Indian payroll.

Because timesheet hours also drive project costs, the same data shows what each client project costs in salary. Juntrax works alongside your accounting system, and your approved payroll then goes to your WPS agent for the transfer.

2. Standalone Payroll Software

Dedicated payroll tools can handle WPS file formats well. The weak point for a services firm is the handoff. Attendance, leave, and timesheet data usually arrive by export, so any late approval upstream delays the whole run.

3. Bank WPS Portal With Spreadsheet Payroll

Many small firms calculate pay in a spreadsheet and upload the file through their bank’s corporate portal. This setup costs little at the start. However, it depends on manual formulas and file preparation, and it leaves a thin audit trail when MOHRE asks for proof of payment.

4. Outsourced Payroll Provider

A provider can take calculation and file submission off your plate. Still, Resolution 340 keeps the liability with you, and the provider needs your inputs earlier than before. Check that your agreement names input deadlines that work with a month-end transfer date.

Make the 1st of the Month the Easy Part of Payroll

UAE WPS compliance in 2026 comes down to timing and records. Resolution 340 set one due date, raised the threshold to 85%, and shortened the path from a late payment to real consequences. Firms that move cut-offs earlier, document exclusions, and keep payroll inputs in one place will find the new deadline routine.

If your payroll still pulls timesheets, leave, and reimbursements from different tools, begin with those inputs. Once they close on time, the 1st of the month stops being a scramble.

This guide summarizes public advisories on Ministerial Resolution No. 340 of 2026 as of September 2026 and is not legal advice. Confirm specific obligations with MOHRE or a qualified UAE employment adviser.

Frequently Asked Questions

What Is the New WPS Rule in the UAE for 2026?

Ministerial Resolution No. 340 of 2026 makes the 1st of each Gregorian month the single due date for the previous month’s wages in MOHRE-registered private-sector companies. It took effect on 1 June 2026, removed the 15-day grace period, and raised the compliance threshold from 80% to 85% of total wages.

When Must Salaries Be Paid Under Resolution 340?

Wages for each month must be paid by the 1st of the following Gregorian month through WPS or another MOHRE-approved channel. Payment after the 1st counts as delayed. Most employers now transfer salaries in the last working days of the month to leave room for bank processing.

What Happens If Salary Is Paid After the 1st of the Month?

Electronic monitoring starts on the due date, and notifications follow from Day 2. From Day 5, MOHRE may suspend new work permits. Later stages can bring fines, Third Category reclassification, automatic labor disputes, and from Day 21, asset attachment, travel bans, or Public Prosecution referral in certain cases.

Does the 85% Rule Mean 85% of Employees?

No. The establishment test looks at wage value, so you must transfer at least 85% of total wages due by the 1st. Separately, each employee must receive at least 85% of their own wage, with any gap coming only from lawful deductions.

Do the New WPS Rules Apply to Free Zone Companies?

Resolution 340 applies directly to companies licensed with MOHRE. Some free zones run their own WPS arrangements, and it is not yet settled whether they will adopt the same rules. Confirm with your free zone authority, and plan for the 1st-of-month deadline in the meantime.

Are New Employees Covered by WPS From Day One?

Yes. Resolution 340 removed the earlier 30-day exemption for new hires, so a joiner falls within WPS from their first pay cycle. Collect bank details and complete labor records during onboarding to avoid a late first salary.

Can a Company Outsource WPS Payroll?

Yes. You can delegate payroll processing to a third party if MOHRE has the delegate’s details and the scope of the delegation. The employer still carries responsibility for paying on time, so align the provider’s input deadlines with your month-end transfer date.