Payroll
A salary in the UAE is usually split: Basic, plus Housing, Transport and Other allowances.
Adding an employee and the salary split
Where in the app: Finance → Payroll
A salary in the UAE is usually split: Basic, plus Housing, Transport and Other allowances. Enter it the way their contract does, under Salary split. The split is not cosmetic. End-of-service gratuity is worked out on Basic only — allowances do not increase it. That is why contracts here often keep basic low, and it is legal. Also add Joined, and their bank details under WPS bank details if you will pay them through WPS.
Changing a salary
Where in the app: Finance → Payroll
A raise is a new row in Salary history. Set This salary starts on to the date it starts from. Earlier months keep the old split, so a pay run for March still uses March's salary. That is why the salary on the employee cannot simply be edited — it would rewrite the past. Add the change from the date it starts instead.
What is a pay run?
Where in the app: Finance → Payroll
One month of pay: a line per employee with Gross, Deductions, Pension, Net, and Gratuity this month. Generate it, check the lines, Approve it, then Record payment when the money leaves. Approving posts the salary expense and the gratuity for that month to the books, so a pay run needs accounting to be on. Only deductions can be changed on a line — everything else comes from the employee record.
How is gratuity calculated?
Where in the app: Finance → Payroll
For an expat on Gratuity (expats), Federal Decree-Law 33/2021 Article 51: 21 days of basic salary for each of the first five years of service, then 30 days for each year after that. It is worked out on the last basic salary, so a raise increases what is owed for every earlier year too — the month of a raise shows a larger Gratuity this month than usual, and that is correct. Resigning does not reduce it. Since 2021 an employee who resigns gets the same as one who is let go.
Who earns gratuity?
Where in the app: Finance → Payroll
Expat employees. UAE and GCC nationals do not — they are on a state pension instead, with contributions each month. That is the choice under End-of-service: Gratuity (expats), or State pension (UAE / GCC). Employees in a free zone with its own scheme, such as DIFC or ADGM, are outside what Fatura computes — set that up with your free zone.
Gratuity in your books
Where in the app: Finance → Payroll
Gratuity is money you will owe, so it is built up month by month as a liability, not paid out along the way. Each pay run adds that month's share, shown as Gratuity this month. This matters: a business with ten long-serving staff owes a real amount that is invisible if you only count cash. When someone leaves, the payment settles the liability that is already there.
Someone joined before my books started
Where in the app: Finance → Payroll
If they joined before Accounting starts on, and End-of-service is Gratuity (expats), enter what they had already earned as Gratuity already owed. Without it, the liability in the books starts from that date and understates what you owe. Ask your previous accountant for that number, or work it out from Joined and Basic.
Pension for UAE and GCC nationals
Where in the app: Finance → Payroll
Nationals of the UAE and the other GCC states are covered by a state pension fund, and you contribute each month alongside them. Choose their fund under Pension. The list is UAE — GPSSA, Saudi Arabia — GOSI, Qatar — GRSIA, Kuwait — PIFSS, Bahrain — SIO, or Oman — PASI. It appears when Nationality is a UAE or GCC country. The rates are applied for you; you do not enter percentages. Expats have no pension contributions here. They are on Gratuity (expats).
Pension in your books
Where in the app: Finance → Payroll
The employee's share comes out of their net pay — that is the Pension column on the pay run — and your share is a cost to you. Both sit as one payable until you pay the fund, because you remit them together. The payable is Pension contributions payable. Approving the pay run posts your share as an expense and the whole amount as what you owe.
The WPS file
Where in the app: Finance → Payroll
Salaries in the UAE are paid through the Wage Protection System. The bank needs a file in the Central Bank's format — a .SIF — listing each employee and what they are paid. Download WPS file from an approved or paid pay run. Each person needs a Labour card number, an IBAN and a Bank routing code. If any are missing, the pay run names who, so you can fill them in and download again. The business also needs its MOHRE establishment ID and Employer bank routing code, under Settings → Business → Business profile. Without those the file cannot be built. Downloading the file does not pay anyone and does not mark the run as paid. Your bank does the first. You do the second with Record payment.
Who can see payroll?
Where in the app: Finance → Payroll
Payroll is the most sensitive data in the app: salaries and bank details. An Owner and an Admin have it. A Staff member gets it only if you grant Payroll. An Accountant never does, even with access to the books. They will see the salary totals in the ledger, but not who earns what.
Related guides
- Do Freelancers Pay Corporate Tax in the UAE?
Only above AED 1 million of business turnover — and even then most pay nothing. But the relief that makes it nothing is closing, and it has never been automatic.
- How Do I Invoice as a Freelancer in the UAE?
Whether you charge VAT, what to put on the invoice if you're registered vs not, and how to get paid on time.