How does UAE payroll tax work in 2026?

GPSSA contributions for UAE nationals

The General Pension and Social Security Authority (GPSSA) administers the national pension scheme under Federal Decree-Law No. 57 of 2023. Contributions apply only to UAE national (Emirati) employees in the private sector. The contribution base is the employee's contribution account salary, which may differ from basic salary where applicable GPSSA rules and caps apply.

Expatriate employees: no GPSSA, no payroll tax

Expatriate employees are outside the GPSSA framework entirely. The employer has no monthly social contribution to pay on an expatriate salary. The only mandatory departure-linked cost is end-of-service gratuity, which accrues annually and is settled when employment ends.

Emiratisation (Nafis) levy

Companies in certain sectors that fall below their Emiratisation quota must pay a monthly levy per unfilled Emirati position. The levy is a workforce-compliance cost, not a payroll tax, and its rate is set separately. Teamed can advise on whether a specific hire or headcount triggers a quota obligation.

For UAE national employees, the 11% GPSSA contribution is deducted from the salary and remitted by the employer alongside the employer's own 15% contribution. The net effect on an Emirati employee's take-home pay is the 11% deduction only, with no income tax on top.

For expatriate employees, the payslip arithmetic is simple: gross salary equals net salary. No income tax. No social contribution. No withholding. This is one of the most internationally competitive compensation structures for attracting global talent.

End-of-service gratuity: the expatriate deferred benefit

Rather than a monthly pension contribution, expatriate employees build an entitlement to end-of-service gratuity under Federal Decree-Law No. 33 of 2021, Article 51. The gratuity accrues at 21 days of basic wage per completed year for the first five years, and 30 days of basic wage per year after that, up to a cap of 24 months of basic wage. This is a liability on the employer's books, not a monthly cash deduction from the employee's salary. Most UAE employers provision for it internally or use an end-of-service benefit scheme.

Corporate tax: separate from personal income

The UAE introduced a 9% federal corporate income tax on business profits above AED 375,000, effective for financial years starting on or after 1 June 2023. This is a corporate tax, not a payroll or personal income tax. Employment income is not affected. Payroll processing for employees is unchanged by the corporate tax rules.

What this means for your payroll

There is no income tax withholding step in a UAE payroll run. The payroll calculation does not include a PAYE-equivalent deduction. Gross and net pay are the same figure for all employees. This removes the hardest step from payroll administration compared with most other jurisdictions. The remaining employer obligations are GPSSA for nationals, Wage Protection System compliance, and end-of-service gratuity provisioning for expatriates.

Payroll cycle

Salaries must be paid at least once per month. Employers who miss the WPS deadline face permit and trade-licence penalties before formal MOHRE action. Most UAE employers run a monthly cycle aligned to the calendar month.

GPSSA remittance

For UAE national employees, the employer must remit both the employee's 11% deduction and the employer's own 15% contribution to GPSSA by the deadline set by the authority. Late remittance carries a penalty. GPSSA operates its own employer portal separate from WPS.

End-of-service provisioning

Employers are encouraged to provision for expatriate end-of-service gratuity monthly, even though it is not paid until employment ends. Some large UAE employers use approved end-of-service benefit schemes administered by licensed fund managers. Teamed handles end-of-service accrual tracking for all expatriate hires on the platform.

1. Collect salary and allowance data

   Gather the basic wage, housing allowance, transport allowance, and any other contractual pay elements for each employee before the monthly cut-off.

2. Calculate gross pay

   Total all salary components. Gross pay equals net pay for expatriate employees. For UAE nationals, note that gratuity and GPSSA are calculated on basic wage only.

3. Deduct GPSSA for UAE nationals

   Deduct 11% of contribution account salary from each Emirati employee's pay. There is no income tax deduction for any employee.

4. Calculate employer GPSSA contribution

   Calculate 15% of contribution account salary for each UAE national employee. This is the employer's direct pension cost on top of the salary.

5. Transfer salaries via WPS

   Pay all salaries electronically through a Central Bank of the UAE approved WPS channel before the monthly deadline. Late payment triggers permit and compliance penalties.

6. Remit GPSSA and update accruals

   Pay combined GPSSA contributions to the authority by their due date. Update the end-of-service gratuity accrual ledger for all expatriate employees covered in the period.

GPSSA pension for UAE nationals

The GPSSA scheme under Federal Decree-Law No. 57 of 2023 provides retirement, disability, and death benefits. UAE national employees are enrolled from their first day of eligible private-sector employment. Contribution rates are:

• Employer: 15% of contribution account salary
• Employee: 11% of contribution account salary
• Government subsidy of 2.5% applies where the contribution account salary is below AED 20,000

Abu Dhabi nationals may fall under the Abu Dhabi Pension Fund (ADPF) rather than GPSSA. Rates and rules under ADPF are broadly similar but administered separately. Teamed confirms the correct scheme at onboarding.

End-of-service gratuity for expatriates

Expatriate employees in the UAE receive end-of-service gratuity (EOSG) under Article 51 of Federal Decree-Law No. 33 of 2021. Key rules:

• Minimum qualifying service: one completed year
• Rate for years 1 to 5: 21 days of basic wage per completed year
• Rate for years after 5: 30 days of basic wage per completed year
• Total cap: 24 months of basic wage
• Paid within 14 days of the last working day

Gratuity is calculated on basic wage only, not on allowances, bonuses, or benefits. This means an employee earning a high allowance package may receive a lower gratuity than their total compensation suggests. Structuring the basic wage correctly at hire is important.

UAE nationals: minimum Emirati wage

A UAE national working in the private sector must receive at least AED 6,000/month in base monthly salary from 1 January 2026. This applies only to Emirati nationals. There is no statutory minimum wage for expatriate employees.

Real HR and legal experts handle your UAE hires, from offer letter through every WPS transfer and end-of-service settlement. An actual person, not a chatbot or a pooled queue. There is no setup fee and no exit fee. Employer cost passes through at cost, itemised on every invoice.

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Key sources: MOHRE: Federal Decree-Law No. 33 of 2021, GPSSA, and PwC Tax Summaries UAE.