Currency on Salary Payments in UAE

The new UAE labor law on currency of salary Payments in the UAE applies to all businesses and employees operating in the UAE’s private sector, including those located in the country’s free zones.

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    An Overview of salary payment currency in UAE

    According to Article 22 of new UAE Labor law (Federal Decree Law No 33 of 2021); salary shall be paid in UAE’s official currency i.e AED or any other currency upon agreement between both the employer and employee in an employment contract. UAE law has provided the freedom of choice to private sector companies to choose their payment currency in salary, but this should be mentioned clearly in the employment agreement.

    Determine the amount or kind of wage and how it will be paid under Article (22)

    • The employment contract should include the type and amount of wages as this is evaluated by the court if there are any labour disputes in the future.
    • According to the Regulations of this Decree-Law, the employer is required to pay his employees their salaries on time.
    • UAE dirhams will be used to salary. Salary may be paid in a different currency if both parties agree in the employment contract.

    The United Arab Emirates dirham, which serves as both Dubai’s and the other Emirates’ official currency of account, is abbreviated as AED. DHs or DH are widely used as the letters to represent them. The Central Bank of the United Arab Emirates is in charge of issuing the national currency.

    UAE legislation has given private sector businesses the ability to select the currency in which their salaries will be paid, but the employment agreement needs to make this explicit.

    The United Arab Emirates has a fascinating and unique system in place for paying workers. The fixed nature of most salaries makes it easier for employers to plan their expenses.  The Wage Protection System (WPS) is a requirement for all employers who have registered with the Ministry of Human Resources and Emiratization (MoHRE) to use in order to make all needed payments to their employees. According to UAE labour legislation, employees who are salaried annually or monthly have to get their payment at least once per month.

    However, it is important for anyone considering working in the UAE to understand how wages are paid.


     

     

    Frequently Asked Questions

    1. Is it mandatory to pay the employee salary in UAE Dirham (AED)?

      No. According to the new UAE Labor Law, companies can pay their employee salary in any other currency, but it should be clearly stated in the employment contract.

    2. Is there any fixed pay date in the UAE for employers to pay salaries?

      No. Employers can pay their salaries as per the company policy. But they should pay the salary to the employees at least once a month.

    3. Can WPS salary transfers be employed for non-AED payments?

      Yes. Any currency can be transferred under this system. There is no option to process non-AED payments through WPS, according to the existing WPS salary upload file template used by banks

    4. Is there any minimum wage payable in UAE?

      There is no minimum wage payable in UAE.

    5. Can an employee demand salary in their currency of choice?

      The employee cannot demand any other currency other than what is stated in their employment contract.

    6. Do employers require the employee’s consent to change the payment currency?

      Yes. The employer should pay the salary in the currency mentioned in the employment contract.

     

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