UAE Salary Calculator

The UAE has a unique salary structure compared to many other countries, notably with no personal income tax. Understanding your salary breakdown is important for calculating benefits like end-of-service gratuity.

Salary Components

• Basic Salary: Typically 50-60% of the gross salary. This is the base component used for calculating gratuity, overtime, and other benefits. UAE labor law doesn't mandate a specific percentage, but this is standard practice.
• Allowances: The remaining portion of the salary, which may include housing allowance, transportation allowance, and other benefits. Allowances are not included in gratuity calculations.

UAE Nationals' Pension

UAE national employees contribute 5% of their basic salary to the pension scheme, while employers contribute 12.5%. Expatriates do not participate in this pension scheme.

Wage Protection System (WPS)

The UAE's Wage Protection System requires that salaries be paid through approved financial institutions, ensuring that employees receive their agreed compensation on time. Key points about WPS:

• Employers must register with the WPS
• Salaries must be paid within 10 days of the due date
• The full agreed salary must be transferred electronically
• Unauthorized deductions are not permitted

Deduction Limits

UAE Labor Law places restrictions on deductions from an employee's salary:

• Total deductions cannot exceed 50% of the gross salary
• Loan repayment deductions cannot exceed 20% of the monthly wage without the employee's consent
• Fines for disciplinary actions are limited to 5 days' wages per month

The UAE's salary structure is relatively straightforward compared to many countries, since there is no income tax. However, understanding the breakdown between basic salary and allowances is important for calculating end-of-service benefits and ensuring compliance with UAE labor laws.