Month: October 2021
Probation Period in UAE: an Overview
HLB UAE Payroll Team
Phone:- +971 4 327 7775
Mobile:- +971 50 205 9540
WhatsApp:- +971 56 219 1607
Email:- dubai@hlbhamt.com
A probationary period is a time frame set by an employer to assess whether a new hire is a competent performer for the position. The first few months are for coaching the new hire to achieve the required standard, and there by evaluating the performance, whether the new hire is qualified enough to take the next step. If the evaluation is completed successfully, the employee will be hired by the employer permanently.
The probation period in a company usually runs for 3–6 months from the date of hire, but it may also depend on the agreement set out in the work contract.
The UAE Ministry of Labour has set out certain guidelines with regard to the employment of an individual during the probation period. Here we have covered some important points about probation in the UAE.
What is the maximum period of probation?
An employee can be held under a probation period for a maximum of six months. Some companies also choose to have a shorter probation period of about two or three months. It is prohibited to extend the probation period of an employee beyond six months.
Is the probation period included in the employee’s total period of service?
Yes. If the employee passes the probationary period and remains in service, the probation period is included in the employee’s total period of service.
Can an employer terminate an employee during probation?
If an employee is considered to be incompetent for the job position that they are currently enrolled in during the probation period, an employer has every right to terminate the services with prior notice and with no compensation.
If an employer terminates an employee during probation, is the employee eligible for any end-of-service benefit?
No, the employer can terminate the services of the employee without notice and without payment of an end-of-service benefit during the probation period.
Can an employee resign during probation?
During the probation period, an employee has the right to resign at any point. Also, it is important to ensure that the employees read the contract carefully, as some companies might keep a clause that says he/she has to serve a notice period even during the probation period. The duration of this notice period depends upon what is mentioned in the contract.
Can an employee take annual leave during probation?
No, employees cannot take available annual leave during the probation period.
Can an employee take sick leave during probation?
No, employees cannot take sick leave during the probation period.
Does an employee get a gratuity if they resign during probation?
An employee is not entitled to a gratuity if he/she leaves during the probation period. An employee should receive a gratuity only after completing one year of service at the company.For more details about gratuity, follow the below link.
Does an employer have the right to extend probation for a second time in the same company?
No, an employer cannot put an employee on probation for a second time in the same company.
Who bears the visa cost if an employee is terminated during probation?
As per UAE Labour Law, an employer has to bear all the visa expenses for an employee and cannot deduct these from the employee.
Payroll Service in UAE
The process of payroll is a little complicated and time-consuming; hence it is always recommended to outsource your company’s payroll function. Outsourcing payroll will ensure the assistance of a team of trained payroll professionals and it frees up the time of the organization, helping them focus on other projects that add value to their business. One should be extra vigilant while selecting their payroll provider, as payroll data is highly sensitive, and one should opt for a provider that can ensure high levels of data security.
As a leading payroll outsourcing company, HLB HAMT can help solve your payroll complexities through customized strategies. We take care of our client’s entire payroll cycle that includes the preparation of payroll reports, processing salary payments with WPS compliance, accrual management including Gratuity, pension funds, an online portal for accessing payslips, and many more. Our leadership team spends the necessary hours in every project, ensuring our clients get refined consulting services to take your business forward.
To know more about our payroll process, click here
Disclaimer
Whilst every effort has been made to ensure the accuracy of this information, HLB HAMT will not accept any liability arising out of errors or omissions. Please note that this blog is not all-inclusive. Our guidance is designed only to give general information on the issues/topics covered. It is subject to change and is not intended to be a comprehensive summary of all laws which may be applicable to your situation, treat exhaustively the subjects covered, provide legal advice, or render a legal opinion.
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Benefits of Opting for an Accounting Firm in Dubai, UAE
Vimal Kutty
Phone:- +971 4 327 7775
Mobile:- +971 56 147 0259
WhatsApp:- +971 56 219 1607
Email:- dubai@hlbhamt.com
Accounting is a broad concept and has many aspects to look into. An organization usually takes care of its accounting procedures with the help of an in-house accountant, but now, to make things easier and professional, entities seek the assistance of a reputed accounting company. There are numerous accounting firms in Dubai, to which you can outsource your accounting procedures.
Every business entity irrespective of its size requires accounting. There may be several questions that arise when you enter into a business and the most common one is about the importance of accounting. Accounting helps in tracking your incomes and expenses and every other financial transaction while running a business. It can be done either by an in-house accountant or through outsourcing.
Why choose an accounting firm in UAE?
An experienced accounting firm in UAE will know the ins and outs of accounting in the country and can help your business to maintain proper books of accounts and track all the transactions. There are certain financial statements that help you to assess your records; any information on the profit and loss can be identified through the “income statements”. A “balance sheet” will allow you to look at the financial position of the company on a specific date and the “cash flow statement” acts as a mediator between the income statement and the balance sheet and lets you know the cash raised and spent during a particular period of time. Apart from the financial statements one should also know the importance of accounting and they are:
- It helps you to evaluate the overall performance of your business. The financial record helps to determine the financial position of a business. It also helps you to keep track on all the transactions taking place in the organization and allows you to stay within the budget.
- Accounting helps in keeping the statutory compliances intact. Every government taxes and liabilities will be prompt when proper accounting is maintained.
- It is crucial for businesses to follow a budget and accounting makes it easier to create a budget and plan things accordingly. Accounting helps in sticking on to those plans and to make new ones as required. It also aids businesses to file all the necessary financial statements as well.
In UAE, most of the businesses, whether small or large, are required to audit their accounts every year. The books of accounts will allow the auditor to make proper audit reports; only then the management will get an exact idea about the overall position of the organization.
Maintaining proper accounting determines the future of any business. Accounting can be done within the organization, but outsourcing your company’s accounting will ensure you with accurate results. Accounting firms in Dubai will provide you with professional assistance and contribute their experience to support your business. By choosing an accounting firm in Dubai for outsourcing your accounts, the organization can focus more on the other functions taking place within the entity which will boost your business.
Accounting principles one must be aware of
In order to run a company one must know about the basic things about accounting too. What is accounting? What are the principles in accounting and so? There are mainly five principles in accounting and to name them, they are:
- Revenue recognition principle:
The revenue recognition principle allows you to recognize the revenues through your organization’s income statements. The principle states that “the revenue of a business is earned and recorded during the time of sales”, i.e., the revenue is generated at the point where a consumer possess the product or service and not during the time of money transaction. - Expense principle:
According to the expense principle, “an expense occurs at the time when the business accepts goods and services from another entity.” That is when an accountant records a transaction as an expense in the books. - Matching principle:
The matching principle states that every item of revenue should match one from the expense list. This is an important principle in accounting and every organization should follow this while entering their accounts. - Cost principle:
The cost principle lays down the rule that while computing the cost of an item, one must consider the historical cost of it and not the current market value of the item when entering in the book of accounts. - Objectivity principle:
According to the objectivity principle, one must provide the evidence to support the data, like vouchers, receipts or invoices and there is no scope for personal opinion in accounting.
These are the major accounting principles used. It is not necessary for everyone to know these, but it will surely help you to keep yourself educated. Accounting can be done by any professionally qualified accountant, but nowadays people opt for outsourcing accounting procedures as it will help the records to be free from personal interests and will result inaccurate outcomes. One should also be extra cautious while outsourcing matters like accounting as the date must be kept confidential. It is an internal activity, which is why it is important to choose a reputed accounting company in Dubai to look into your needs.
HLB HAMT: A Renowned accounting firm in Dubai
HLB HAMT is a leading accounting firm in Dubai and we offer diverse accounting services that range from online or cloud-based accounting and onsite accounting to accounting system setup training, accounting secondment and many more. Our highly qualified and well-experienced team will handle your data with utmost care and security and ensure to provide you with the best quality services available.
HLB HAMT promises to keep your data safe and we deal our client’s records with high security.
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Final Settlement calculations in UAE
HLB UAE Payroll Team
Phone:- +971 4 327 7775
Mobile:- +971 50 205 9540
WhatsApp:- +971 56 219 1607
Email:- dubai@hlbhamt.com
Employees are an organization’s lifeline. Expatriates from a multitude of locations live in the UAE, contributing to the Emirate’s economic growth and prosperity. It is the employer’s responsibility to look after and settle an employee’s end-of-service benefits, and this should be done in an accurately and timely manner.
While calculating EOS, companies should include all the benefits as mentioned in the UAE Labor law and Employment agreement between the company and the employee.
Below are the components included in the Final Settlement Calculation.
- Unprocessed Salary, if any: –
An employee is entitled to receive salary until the last working day.
If an employee resigns or gets terminated and the last working day is 10th Aug 2021 and the employee had received July 2021 salary, then the employee should be paid for 10 days additional salary as part of the final settlement calculation. If an employee resigns or gets terminated and the last working day was 25th July 2021 and the employee had received July 2021 salary, then 6 days of salary should be recovered from the employee and be included in the final settlement calculation.
- Unused Annual Leave or excess leave used: –
If the employee has worked for more than six (6) months, then the employee will be paid for unused annual leaves which are accrued till the last working day of the employee. If the employee has used excess leave from the accrued leave till the last working day, then the excess used day amount will be recovered while calculating the final settlement.For more details about the leave policy in the UAE, please follow the link UAE Leave
- Repatriation ticket to home country: –
The employer should pay the employee for a one-way repatriation ticket to the employee’s country of origin. This is applicable only if the employee is travelling back to the country of origin. If a visa change is happening within the UAE by changing visa status, the employee is not eligible to get a repatriation ticket.
- End of Service Gratuity: –
Gratuity is a monetary payment eligible to an expat employee as a lump sum at the end of his tenure, provided that the period of service exceeds one year. The basis amount used to calculate is the employee’s last drawn basic salary. The amount of gratuity payout is calculated based on the type of contract, i.e., limited or unlimited contracts, and the type of separation, i.e., resignation or termination. Please see the below table to get a fair idea of how to calculate gratuity under different scenarios.
For more information about UAE Gratuity calculation click here
- Notice Period Pay: –
The employer or employee can terminate an unlimited employment contract with a minimum of 30 days notice period. The employee will have to perform his duties during such a period as instructed by the employer. If either the employer or the employee fails to serve notice or shortens the notice period, the party obligated to serve the notice shall pay the other party compensation as Notice period pay. If the employer has terminated an employment contract for a limited period, he becomes liable for the payment of compensation, provided that the sum of compensation, in all events, may not exceed the total pay due to him for a period of three months or for the remaining period of the contract whichever is shorter, unless the terms of the contract provide otherwise. If the contract has been terminated by the employee, for reasons other than those mentioned under Article (121), the employee becomes liable for compensating the employer against losses incurred by him as a consequence of contract termination, provided that the amount of compensation, may not exceed half a month’s pay for a period of three months or for the remaining period of the contract, whichever is shorter, unless the terms of the contract provide otherwise.
- Any Outstanding loan, advances, or deductions: –
If there is any unrecovered portion of the outstanding loan, advance or deduction, it can be recovered through final settlement.
For example:- An employee has taken a loan of AED – 60,000.00 and the repayment is in 12 Equal installments. The employee has paid AED-50000.00 (10 instalments), and the remaining two installments (AED 10,000.00) are to be recovered from the employee when the final settlement is calculated.
- Other payments or recovery: –
If there is any other payment or recovery due to the employee, it also can be settled in the final settlement calculation
I.e., any overtime payment, bonus, commission, incentives, etc. that is pending to be paid with his final settlement calculation. If any amount is to be recovered (fines, telephone deductions, etc.), from an employee, it should be considered in the final settlement calculation.
- Any other benefits or compensation mentioned in Employment Contract: –
As part of the separation, an employee is entitled to any other benefits or compensation mentioned in the employment contract.
Here, we are trying to answer some of the commonly asked questions related to final settlement.
Can a company in UAE terminate an employee without any End of service Gratuity or Notice period pay?
Any employee whose employment is terminated by the employer under Article 120 is not eligible for any end-of-service gratuity or notice period pay. Article 120 of UAE Labor law includes the below conditions.
- If the employee adopts a false identity or nationality or if he submits forged documents or certificates.
- If the employee is appointed under a probationary period and dismissal occurs during or at the end of said period.
- If he commits an error causing substantial material loss to the employer, provided that the latter advises the labor department of the incident within 48 hours from having knowledge of the same.
- If an employee violates instructions regarding the safety of the place of business provided that such instructions are displayed in writing at conspicuous places and in the case of an illiterate employee, the latter must be informed verbally of the same.
- If he fails to perform his basic duties under the employment contract and continue to violate them despite a formal investigation and a warning that he will be fired if the same thing happens again.
- If he divulges any secrets about the establishment where he is employed.
- If he is awarded final judgment by the competent court in respect of an offence prejudicing honour, honesty or public morals.
- If during working hours, he is found drunk or under the influence of a drug.
- If in the course of his work, he commits an assault on the employer, the manager or any of his colleagues.
- If he is absent without lawful excuse for more than twenty intermittent days or for more than seven successive days during one year.
Do employees have the option to leave the company without serving notice period in UAE?
As per Article 121 of UAE labor law, the employee may leave the service in a Company in UAE without notice period in the following cases:
- If the employer does not fulfill his obligations towards the employee as provided for in the contract or in this law.
- If the employer or his legal representative has committed an act of assault against the employee.
Is there is any deadline in labor law for processing EOS?
There is no such deadline in the law for final settlement before cancelling Visa, as employees are asked to sign paperwork declaring that they have received all that is due to them ahead of visa cancellation.
Who bears visa cost? Can a company deduct visa cost from employee if he/she resigned from the job?
As per UAE Labour law, employer has to bear all the visa expenses for an employee and cannot deduct this from employee.
How long can an employee stay in the UAE once their visa is cancelled by the company?
Employee can stay a maximum 28 days in UAE after cancelling the visa.
Is WPS Payment processing mandatory for EOS?
WPS is not mandatory for EOS, it is recommended. Company can issue cheque also.
Should a company intimate employee bank before processing final settlement to the employee?
If company provided any letter to the bank saying that company will inform bank while processing final settlement, it is obligatory to inform bank. If there is no such letter issued by the company, it is not mandatory to inform bank that payment is final settlement.
Payroll Service in UAE
The process of payroll is a little complicated and time-consuming; hence it is always recommended to outsource your company’s payroll function. Outsourcing payroll will ensure the assistance of a team of trained payroll professionals and it frees up the time of the organization, helping them focus on other projects that add value to their business. One should be extra vigilant while selecting their payroll provider, as payroll data is highly sensitive, and one should opt for a provider that can ensure high levels of data security.
As a leading payroll outsourcing company, HLB HAMT can help solve your payroll complexities through customized strategies. We take care of our clients’ entire payroll cycle that includes preparation of payroll reports, processing salary payment with WPS compliance, accrual management including Gratuity, pension funds, an online portal for accessing payslips, and many more. Our leadership team spends the necessary hours in every project, ensuring our clients get refined consulting services to take your business forward.
To know more about our payroll process, click here
Disclaimer
Whilst every effort has been made to ensure the accuracy of this information, HLB HAMT will not accept any liability arising out of errors or omissions. Please note that this blog is not all-inclusive. Our guidance is designed only to give general information on the issues/topics covered. It is subject to change and is not intended to be a comprehensive summary of all laws which may be applicable to your situation, treat exhaustively the subjects covered, provide legal advice, or render a legal opinion.
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In-house v/s outsourced payroll services in UAE
HLB HAMT Payroll Team
Phone:- +971 4 327 7775
Mobile:- +971 50 205 9540
WhatsApp:- +971 56 219 1607
Email:- dubai@hlbhamt.com
In-house Payroll is when the organization’s payroll is processed by an internal department. Employees who process payroll in-house are classified as employees and, therefore, are paid through the same payroll system that they assist in managing. Internally paid employees usually belong to the human resources or finance department. Outsourcing payroll is when an organization hires a third party or an external company to manage and oversee their payroll process. This may include calculating employee salaries, managing employee benefits, organizing contractor payment deadlines, and submitting payroll taxes.
So, when it comes to payroll, Companies have two alternatives: Outsource or In-house payroll. However, let’s discuss some factors that each service provider gives to the organization so that your firm can make the best option possible.
Reducing data complexity
Outsourcing payroll to dependable specialist firms in the UAE is the better alternative for companies who are concerned about their compliance responsibilities, data confidentiality and administrative intricacies connected with payroll processing. If you want to entirely depend on the experience, talents, and tools of experts to process payroll correctly, and to optimize profit generation functions, then outsourcing payroll will be a good option.
In-house outsourcing is the process of building software within your organization. It entails the use of on-site full-time programmers who are paid a fixed salary and other employment perks. The in-house payroll system might cash in for cost efficiency and privacy in accessing data in a company as we have more control with the payroll process which is critical for the growth of the business.
Use of Technology
There are numerous expenses that businesses overlook when they choose to process payroll internally. A company needs to have top notch technical software as well as a high degree of employee participation and hiring of professionals in this field. This might turn out to be more costly when compared to the services offered by an external payroll provider. A company need not invest in costly technology or skilled personnel once they decide to opt for an external provider. Outsourcing payroll providers use sophisticated technology and cloud-based solutions. Most of these solutions may also be integrated with your accounting software.
Saving time and preventing errors
Another advantage of using an outsourcing firm compared to in-house is that the company will not have to spend countless hours keeping track of all the data and computations, thus saving time to focus on its core business without worrying about the payments. This way the company will be able to invest the time saved in whatever way is beneficial for the organization. This customizable reporting removes fallible paper processing and monthly reconciliation of payroll checks.
Legal Policies and Compliance
Adhering to legal policies and compliance are critical while processing the payroll functioning of an entity. Hiring an individual internally who isn’t well informed about these guidelines might cause issues with your money and employee relations. Whereas outsourcing will offer the service of a professional squad who will be well updated about the compliances and changes in the industry and this will prove beneficial to the company.
Data Security
Data Security is one of the vital parts of the payroll system. In-house payroll teams deal with a lot of sensitive data and employee information, such as bank accounts, salary information, social security numbers, etc. Organizations must take every step to ensure employee data is always kept safe and secure. Outsourcing payroll providers go above and beyond to protect client information from cyber-attacks knowing that they are in charge of a large amount of sensitive data. When compared to in house providers outsourcing teams will be equipped with properly updated resources and strategies to secure employee information.
Professional Expertise
A minor error in payroll processing might result in significant blunders and problems. A professional payroll service provider has skilled employees with years of expertise managing payroll processing for a variety of sectors. They manage outsourced payroll services projects professionally, reducing the risk of mistakes. Outsourcing payroll services ensure that payroll processing is done flawlessly. For every business to achieve a competitive advantage, financial reporting efficiency is critical. Financial reporting and analysis entail the creation of various reports as well as the analysis of data in order to assess a company’s financial health. Multiple levels of quality control checks by experienced professionals along with tracking, documentation of all the reports delivered ahead of schedule might give a healthy edge for outhouse providers when compared to an in-house payroll team.
The United Arab Emirates is considered to be a popular destination for established and developing enterprises. When companies are becoming more innovative and demanding with the highest levels of professionalism and confidentiality, outsourcing payroll functions is considered to be a proven alternative in the Middle East.
HLB HAMT is a major payroll outsourcing firm in the United Arab Emirates. The company is accredited to ISO 9001:2015, ISO 27001: 2015, and ISAE 3402, Type II. Our cluster of professionals assures optimum customer satisfaction with refined consulting services to help them grow their business. Payroll services are provided by HLB HAMT in the United Arab Emirates, Bahrain, Qatar, Saudi Arabia, Kuwait, and Oman. Payroll is a critical component of any organization and should not be taken lightly. Doing it correctly not only keeps your personnel happy, but it also safeguards your company in the long run.
Payroll Process
The process of payroll in UAE is a little complicated and time-consuming; hence it is always recommended to outsource your company’s payroll function. Outsourcing payroll in UAE will ensure the assistance of a team of trained payroll professionals and it frees up the time of the organization, helping them focus on other projects that add value to their business.
One should be extra vigilant while selecting their payroll provider, as payroll data is highly sensitive, and one should opt for a provider that can ensure high levels of data security.
As a leading payroll outsourcing company, HLB HAMT can help solve your payroll complexities through customized strategies. We take care of our clients’ entire payroll cycle that includes preparation of payroll reports, processing salary payment with WPS compliance, accrual management including Gratuity, pension funds, an online portal for accessing payslips, and many more. Our leadership team spends the necessary hours in every project, ensuring our clients get refined consulting services to take your business forward. HLB HAMT provides payroll in UAE, Bahrain, Qatar, Saudi Arabia, Kuwait, and Oman.
To know more about our payroll process, click here
Disclaimer:
Whilst every effort has been made to ensure the accuracy of this information, HLB HAMT will not accept any liability arising out of errors or omissions. Please note that this blog is not all-inclusive. Our guidance is designed only to give general information on the issues/topics covered. It is subjected to change and not intended to be a comprehensive summary of all laws which may be applicable to your situation, treat exhaustively the subjects covered, provide legal advice, or render a legal opinion.
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Foreign Citizens are permitted to own 100% Property Brokerage Businesses in UAE
HLB HAMT Team
Phone:- +971 4 327 7775
Mobile:- +971 55 160 1291
WhatsApp:- +971 56 219 1607
Email:- dubai@hlbhamt.com
The UAE has always been on the frontier of taking on important matters that have a game-changing impact, ultimately benefiting their economic and corporate operations. The real estate sector’s commanding position in the country is set to continue, as property agents will now have full ownership of their firms in the UAE, after the withdrawal of this business activity from the “restricted list.”
The UAE, both at the federal level and in individual emirates, recently revealed the number of commercial activities in which foreign citizens can control 100% of a company and not have a UAE national partner holding a substantial share. However, property brokerage services were still classified as “restricted” and this has now been amended. The Dubai Land Department and RERA are in charge of overseeing all brokerage companies in the UAE, ensuring that rigorous transparency criteria are met.
The UAE property economy is witnessing signs of progress as people upgrade to bigger houses with outdoor amenities amid a remote working and learning trend triggered by the pandemic. The market was toned down due to a three-year oil price slump that began in 2014. Economic aid and government efforts, such as residency permits for seniors and distant workers, as well as the expansion of the 10-year golden visa programme, have also supported in improving the overall sentiment in the nation. Meanwhile, the UAE has also modified its investor visa criteria for property assets, allowing an owner of a Dh750,000 property to get a three-year visa. The previous threshold was Dh1 million for a period of two years.
This revitalizing move will have the greatest influence on Dubai’s real estate market, particularly at a time when buying and selling volume has been stocking up rapidly. As a result, there are bound to be a lot of intriguing discussions inside the realty sector in the coming days.
The real estate markets are always evolving during this challenging business climate, so hiring an expert team to stay up with the pace of change and advise you on many parts of the business are inevitable. To handle the varied requirements and financial risks that come with distinct industries, new techniques must be implemented.
For a long period of time, HLB HAMT has provided services to the real estate and construction industries, and our services are adapted to the needs of our clients. Our team of professionals certifies RERA-mandated regulatory standards and audits escrow accounts.
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