May 16, 2022Dated: | Byadmin admin | All UAE LLCs and UAE-established businesses with an on-shore presence in the UAE must register with the Ministry of Human Resources and Emiratization (MOHRE). Companies that do not comply with the Wage Protection System (WPS), i.e., have not registered or have delayed paying their employees’ salaries for more than ten days, will face severe penalties. Continue reading for more information on WPS Registration and Payroll Services in UAE. What is Wage Protection System (WPS) — UAE It is an electronic wages transfer system in the UAE that controls the payment of workers’ paychecks. The Ministry of Human Resources and Emiratisation (MOHRE) developed it in collaboration with the Central Bank of the UAE. WPS came into being in July 2009 through the Ministerial Decree No. 788 was amended with the Ministerial Decree No. 739 of 2016 by reinforcing the norms and regulations that govern its operations. The MOHRE released new rules to amend the WPS regime on September 1, 2019. The MOHRE implemented the WPS to address these issues and required all UAE enterprises and the Jebel Ali Free Zone (JAFZA) to use it. However, all other free zones and some royal or UAE government-owned companies are exempt and need not register themselves. The Benefits of WPS Registration An online WPS system offers numerous benefits to business entities while paying their staff. They are as follows: It quickens the payroll and salary payments tasks, providing the staff with more time to take up other duties.In case of labor disputes, it is evidence that the organization pays timely salaries.It helps build a bond of trust between the employers and their employees as the employees are sure that they will receive their salaries on the specified date.The salary payment is via an online transaction, so the organization need not hold or handle substantial amounts of cash in their accounting departments in the workplace. If you do not wish to pay directly to your employee’s local account from your local account, you can use a money exchange to do so. But you can only transact cash which will take much more time. Business enterprises may use this approach if you are not ready with your local bank for payroll purposes. Please also note that WPS works only through local banks and not from any bank that is not in the UAE. How to Withdraw your Salary from a UAE WPS Card Employees who do not have a local bank account can withdraw their salaries using a UAE WPS card. They can use this card at various venues around the UAE’s emirates. Employees can transfer funds and have their wages disbursed through these exchanges. They also issue the WPS cards. Employees with a local bank account may use their ATM card to withdraw their salary. The only criteria here is that they must register the account. Conclusion All businesses in the UAE must register with a local bank UAE and open a WPS account by the bank’s instruction. They need to submit the MHRE / MoL number for the company (found on the company Labor Card and the 14-digit MHRE / MoL number of each employee. Want More Information? Flyingcolourtax offers an automated solution for all of your payroll needs; enter your employee information, compliance details, and pay schedule, and you’re done. Book your free consultation with us to know more about the comprehensive services.