Payroll & HR Outsourcing Services
Payroll and HR Services in the UAE
Accurate, compliant payroll that runs quietly in the background, so your team gets paid right, every time.
Running a business in the UAE comes with genuine payroll complexity: WPS compliance, GPSSA registration for Emirati employees, end-of-service gratuity calculations, and labour law requirements that change more often than most in-house teams can track.
- Over four decades of experience supporting UAE businesses across accounting, tax, and workforce compliance
- Full WPS and MOHRE compliance, reducing exposure to fines and delayed salary payments
- Integrated service delivery, connecting payroll directly with our accounting and tax teams rather than treating it in isolation
We handle everything from salary processing and WPS compliance to employee records and leave tracking, accurately and on schedule, so you can focus on building your team rather than managing the paperwork behind it.
What Are Payroll and HR Services?
Managing employee salaries in the UAE requires precision, legal compliance, and confidentiality. Payroll services simplify these processes by automating salary management, ensuring Wage Protection System (WPS) compliance, and reducing the administrative burden on businesses of all sizes.
Payroll services are professional solutions that manage the full range of employee salary processes for a business, including payroll calculation, payslip generation, and salary distribution, all while ensuring compliance with UAE labour laws and regulations. HR services extend this further, covering employee records, contracts, recruitment support, and the broader employment lifecycle from onboarding through offboarding.
How Payroll Services Ensure Compliance with UAE Labour Law
Adherence to UAE labour law is a priority for every business, and payroll providers help companies meet their legal and regulatory obligations in several ways:
- Wage Protection System (WPS): a mandatory electronic salary transfer system, jointly overseen by the UAE Central Bank and MOHRE, ensuring employees are paid on time through authorised financial institutions.
- Salary Information File (SIF) preparation: the structured data file submitted to process WPS salary transfers accurately each pay cycle.
- Clear service agreements: providers operate under transparent agreements specifying scope, timelines, and confidentiality terms.
- GPSSA and pension registration: payroll teams handle employee registration where applicable, including GPSSA registration for Emirati and eligible GCC nationals.
- Corporate tax awareness: while individuals are not subject to income tax in the UAE, corporate tax may apply to the employing entity under Federal Tax Authority regulations, which payroll and accounting teams should account for jointly.
- Ongoing compliance monitoring: periodic reviews help ensure alignment with current standards set by MOHRE.
GPSSA Pension Contributions for Emirati and GCC Employees
Employers with UAE national employees must register them with the General Pension and Social Security Authority (GPSSA) within one month of their joining date. Since Federal Law No. 57 of 2023, effective 2 October 2023, the contribution structure works as follows:
- Total contribution: 26% of the employee’s contribution account salary.
- Employee share: 11% of the contribution account salary.
- Employer share: 15% of the contribution account salary, though the government subsidises 2.5% of this for employees earning under AED 20,000 per month, reducing the effective employer cost to 12.5%.
- Salary cap: the contribution account salary is capped at AED 70,000 under the 2023 law, up from AED 50,000 under the previous 1999 law.
- GCC nationals: employees from other GCC countries working in the UAE are covered under a separate Unified Protection Extension system rather than GPSSA directly, with contributions following their home country’s rules.
Getting these rates and registration deadlines right matters: incorrect registration or underpaid contributions can result in penalties and directly reduce an employee’s eventual pension entitlement.
Payroll and Employee Compensation Management
Full employee compensation management covers everything from salary calculation through to end-of-service benefits.
- Salary calculation: ensuring gross and net pay are calculated correctly in line with UAE labour law.
- Pension deductions: applying mandatory GPSSA pension contributions for Emirati and eligible GCC employees.
- Benefits management: covering reimbursements, allowances, and incentives as defined in employment contracts.
- End-of-service benefits (EOSB) and gratuity: calculating gratuity entitlements based on contract type and years of service, in line with UAE labour law.
- Leave and absence management: tracking annual leave, sick leave, maternity leave, and other statutory leave entitlements.
Our Payroll Outsourcing Scope
Farahat & Co.’s payroll outsourcing service covers the full payroll cycle, from initial setup through ongoing monthly processing.
Setup and configuration
- Initial setup of payroll components and salary structures
- Setting up leave records for each employee
- Configuring pay and deduction components to match your requirements
- Fine-tuning the system for smooth ongoing operation
- Advising on and drafting local labour contracts
Ongoing monthly processing
- Processing monthly payroll for all employees, accounting for salary entitlements, benefits, and required deductions
- Preparing and transmitting salary transfer orders to the bank
- Validating payslips before distribution
- Maintaining a monthly payroll register for internal and audit purposes
- Reviewing bank transfer letters, salary cheques, and payment vouchers
- Calculating statutory gratuity and end-of-service payments
- Preparing annual salary certificates and related certificates for each employee
- Preparing journal vouchers by cost centre for accounting integration
HR Outsourcing Services
Managing HR functions internally takes significant time and effort across recruitment, documentation, and employee lifecycle management, work that can be difficult to handle without dedicated resources.
Our HR outsourcing services support businesses across:
- Recruitment support: hiring candidates and placing them on the appropriate residency and work permit status.
- Work permit facilitation: supporting employee work permits and legal residency status for new and existing staff.
- Local labour contracts: drafting employment contracts and related legal documentation in line with UAE labour law.
- Employee banking support: assisting with the opening of local bank accounts for employees, supporting timely wage transfers.
- Flexible workforce planning: support for headcount adjustments, whether expanding an existing team or managing recruitment within budget constraints.
Farahat & Co. also draws on our broader accounting, tax, audit, and trademark services, giving payroll and HR clients access to a single firm for related compliance needs rather than coordinating multiple providers.
Payroll and HR for UAE Free Zone Businesses
When establishing a company in a UAE free zone, payroll processes must comply with the relevant free zone authority’s employment regulations alongside federal WPS requirements.
- Some free zones operate their own internal wage systems, aligned with MOHRE or Central Bank standards, while others follow the standard federal WPS directly.
- Free zone companies should confirm the specific wage protection requirements that apply to their particular authority, since these can differ from mainland requirements.
- Free zone businesses generally benefit from streamlined electronic record-keeping and modern payroll infrastructure designed to support international workforces.
Confirming the correct wage protection framework early, rather than assuming the federal WPS applies uniformly, helps avoid compliance gaps specific to free zone employment.
Industries That Commonly Need Payroll and HR Support
Certain sectors face payroll and HR challenges that make outsourcing particularly valuable.
- Restaurants and F&B: high staff turnover makes automated, accurate payroll processing essential.
- Retail and e-commerce: seasonal hiring patterns require payroll systems that can flex up and down quickly.
- Hospitality and tourism: multi-shift, multi-workforce operations need precise, attendance-based salary calculations.
- Healthcare and pharmaceuticals: strict MOHRE and health authority compliance is required for medical staff salaries and benefits.
- Construction: WPS regulation and large on-site workforces make third-party payroll support particularly valuable.
- Oil, gas, and energy: multi-currency compensation for expatriate specialists and engineers requires dedicated payroll expertise.
Benefits of Outsourcing Payroll and HR
Outsourcing payroll and HR functions gives businesses of every size measurable advantages over managing these processes internally.
- Risk mitigation: reduces exposure to WPS penalties, labour law violations, and payroll errors.
- Time and cost efficiency: reduces internal HR workload and the operational cost of maintaining a full in-house team.
- Data security and accuracy: automated, encrypted systems minimise human error and protect sensitive employee data.
- Improved employee experience: on-time salary payments and transparent payslips build trust and support retention.
- Access to specialist expertise: payroll providers stay current on frequently changing UAE labour regulations, which is difficult for in-house teams to track alone.
- Multi-currency and expatriate payroll support: simplifies compensation for internationally sourced employees.
- Scalability: payroll and HR support can grow alongside your workforce without requiring proportional internal headcount increases.
How to Choose a Payroll and HR Service Provider
Selecting the right provider affects both compliance and day-to-day operational reliability. Consider the following before making a decision:
- Compliance knowledge: the provider should demonstrate a clear, current understanding of UAE labour law and WPS requirements.
- Technology and features: look for cloud-based systems with automation, analytics, and secure data backup.
- Reliability and support: consistent, responsive customer support is essential for maintaining a predictable payroll cycle.
- Scalability: the system and service should be able to grow alongside your workforce.
- Data protection: confirm the provider uses robust encryption and access controls to protect employee information.
- Track record: look for a provider with an established history of service in the UAE market and transparent, verifiable references.
- Transparent pricing: clear quotations without hidden costs for processing, revisions, or WPS submissions.
Why Choose Farahat & Co. for Payroll and HR Services
Farahat & Co. has supported UAE businesses for over four decades, and our payroll and HR team works alongside the same accountants who manage your VAT, corporate tax, bookkeeping, and audit needs, rather than operating as a separate, disconnected service.
- Integrated service delivery: payroll connects directly with our accounting, tax, and audit teams, reducing the need to coordinate multiple providers.
- Full compliance coverage: WPS, GPSSA, EOSB, and labour law compliance handled as a single, coordinated process.
- Scalable support: solutions structured around businesses of every size, from startups to established groups.
- Established track record: over four decades of experience across audit, accounting, tax, and workforce compliance in the UAE.
- Broader firm expertise: clients can also draw on our trademark registration, company deregistration, and Owners’ Association audit services when needed.
