The UAE is a country that purposefully creates a free and competitive environment for business participants, the tax system is transparent and clear. Since income related to work in a company registered in the UAE is not taxed in the UAE, questions often arise regarding the amount of possible salaries and payment frequency.
Is the amount of salary paid regulated?
If there are no taxes, is it possible to change the amount of salary every month?
In this article, we will answer these questions and review the features of calculating and paying for work in a company registered in the UAE.
- Despite the fact that income related to work in a company registered in the UAE is not taxed, the salary must be paid to the employee regularly and in the amount specified in the employment contract. The employment contracts of employees are registered with the responsible authorities, which are informed about the planned salary and payment frequency. It is possible to provide for supplements to the salary and pay them by calculating them in accordance with the procedure provided for in the employment contract.
2. Companies registered on the mainland are required to use the Wage Protection System. This requirement is set by the UAE Ministry of Labor and is intended to monitor compliance with labor laws.
3. Companies registered in a free zone are not required to join the WPS system, but UAE banks, for example, consider a company’s wage payments through the WPS as an indicator of reliability when deciding on customer credit.
In conclusion, it is important to note that the non-taxation of income related to employment relationships does not mean that it is not regulated by the state – it is important to pay the specified amount of wages on time in order to avoid sanctions and blocking the company’s account.