Payroll services relate to outsourcing the setup, preparation, compliance and payment on salaries and wages. Although there is no individual Income Tax in UAE, there are compliance requirements with Labour Laws. International businesses with Employees across countries benefit from outsourcing their payroll function to IFC as we ensure full compliance with the UAE Law.
For UAE Nationals, there are pension contributions to General Pension and Social Security Authority (GPSSA) that need to be made by Employer and Employee. Contributions should be made by both the employer and employee. The contributions are as follows:
Employer Contribution – 12.5% of employee’s monthly salary (Basic + Housing Allowance)
Employee Contribution – 5%
Late Payment Fee – 10%
The monthly minimum salary subject to social security contributions is AED 1,000 and maximum is AED 50,000. The 5% employee contribution will be deducted from the employee’s salary each month while the payment to GPSSA should be done before 10th of the following month. The social security payments that have to be made for the UAE nationals cannot be processed through bank transfer, but by physically handing out a check at the government office. The cheque has to be written in Arabic. At IFC, we ensure that the company stays compliant by processing the payments and declarations correctly.
UAE has established many freezones which allow 100% ownership to expats. As a result it is a popular option amongst international investors and companies to setup a Freezone company. Each Freezone authority has its own independent rules of compliance. IFC ensures that all employee related matters including salary processing is compliant and expedited.
Mainland companies require that a UAE National is part of the company, either as a Shareholder or as an Agent for some specified licencing activities. These companies have to pay the salaries via WPS System. There are legal requirement compliance when the Employee joins and leaves during the course of employment. IFC Team is fully conversant with the law and changes that are announced by the Ministry. We ensure that our clients stay compliant with the payment of salaries in the appropriate format and payments to Government Authorities for the pension deductions for UAE Nationals, GCC citizens and expats.