Payroll Process in Dubai Multi Commodities Centre (DMCC).pdf
1. Payroll Process in Dubai Multi
Commodities Centre (DMCC)
Dubai Multi Commodities Centre (DMCC) was founded in 2002 by the
Government of Dubai to provide the Physical, market and financial
infrastructure required to establish a hub for global commodities trade. It is
considered one of the flagship free zones of the United Arab Emirates.
In this blog we are trying to answer some of the commonly asked questions
related to payroll process in DMCC.
1. What is the frequency of making salary payments to employees in
The law stipulates in Article 56 that employees engaged in yearly or
monthly remuneration shall be paid at least once a month. All other
employees shall receive their remuneration at least once every two
2. Does DMCC have a minimum wage?
Employees at DMCC do not have a set minimum pay. Some nations,
meanwhile, have established minimum salaries for their citizens working
in the UAE, either through bilateral agreements or as a condition of visa
3. What are the statutory pay components included in an employee’s
The Law does not define the components that should make up an
employee’s salary; there are no defined statutory components.
4. Which are the common components of employee compensation?
The law does not define the components that should make up an
employee’s salary; there are no statutory components. Commonly,
2. employee compensation components include basic salary, house rent
allowance, transport allowance and other allowances that may be
defined from one employer to the other. The variable earnings and
deductions components may include overtime, sales commission
incentives, relocation allowances, vacation pay, mobile allowances and
many more components that are payable to employees from one
company to another.
5. Which are the currencies that can be used in making salary payments
in UAE? Can a salary be paid in a foreign currency?
The only accepted currency used in making salary payments in DMCC
is the country’s national currency which is the AED.
6. What is the maximum number of working hours per day?
An adult works eight (8) hours per day or forty-eight (48) hours per week
(considering a six-day workweek). When an employer works a five (5)
day work week, the total weekly working hours must not surpass 40
hours (i.e. 8 hours per day). Working hours may be raised to nine (9)
hours per day at commercial businesses, hotels, restaurants, watchmen
jobs, and similar operations. Working hours do not include travelling
time required to the workplace. During Ramadan, working hours are
reduced by two (2) hours each day. Working hours do not include
recess times. Employees are not permitted to work continuously for
more than five (5) hours without taking a break for rest, food, or prayer,
with a total break of at least one (1) hour.
7. What is the method of calculating overtime?
Overtime is any extra hours worked by an employee beyond the normal
working hours. When situations necessitate an employee working
longer than normal working hours, overtime is rewarded at normal
salary plus at least a 25% increase in salary. If the overtime occurs
between the hours of 9.00 p.m. and 4:00 a.m., the overtime is rewarded
at the normal salary plus a 50 percent increase. Over time, on the other
hand, is limited to two (2) hours a day unless it is required to avoid a
3. significant loss, a severe accident, or to prevent or relieve both. If an
employee’s job requires them to work on a public holiday for which they
would ordinarily be paid in full or in part, after which:
The employee should be paid with a substitute day off and a salary rise of
at least 50% of the employee’s current salary; or
If the employee is not granted a substitute day off, the employer shall pay
a compensation increase equal to 150 percent of the employee’s basic
rate for the days worked.
8. How is gratuity accrued? When is gratuity paid to an employee?
Gratuity is accrued against the last drawn basic salary and calculated as
1. a) Twenty-one days’ pay for each year of the first five years of service;
2. b) Thirty days pay for each additional year;
provided that the entire total remuneration shall not exceed two year’s
The employee, who has completed one year or more in the continuous
service, is entitled to the end of service remuneration at the end of his
service. Gratuity paid is dependent on the type of separation and the
type of contract
For a comprehensive understanding of UAE gratuity accrual and
settlement, please refer to our article on UAE gratuity policy and
9. How is UAE pension calculated and deducted from an employee’s
salary? Which employees qualify for UAE pension contributions?
UAE nationals are subject to mandatory national pension plan
contributions. Monthly pension deductions are made on UAE nationals’
total fixed salaries to a maximum limit of AED 50,000/-. Employee
makes a 5% contribution, employer contributes 12.5% and the
government contributes 2.5%.
4. 10. What are the different types of employment contracts in DMCC?
There are two types of employment contract: Limited and Unlimited
11. When is an employment contract considered terminated?
An employment contract is terminated in any of the following cases:
Mutual consent by both parties to terminate the contract, provided that the
employee’s consent is in writing
On the expiry of the specified period in respect of limited contracts, unless
the contract is explicitly or implicitly extended
At the option of either party in respect of unlimited contracts, provided that
the correct notice is given and the grounds for termination are not arbitrary;
if the employee dies or is completely incapacitated from working as
evidenced by a medical certificate.
12. Which are the statutory leaves available in DMCC?
A. Annual leave
If the service period is less than 6 months, the employee is not eligible
for any leave. An employee is eligible for 2 days per month if their
service period is less than one year but more than six months.
According to article 75 of the UAE labour law, annual leave is granted
for 30 days per year, where the worker’s period of service is more than
one year. Annual leave is based on calendar days, and any public
holidays and weekends that fall within annual leave is considered as
B. Sick leave
According to article 83, a worker will not be entitled to any paid sick
leave during the probationary period. A worker who contracts illness
following the probationary period, in the continuous service of an
employer shall be entitled to a sick leave not exceeding 90 days,
successive or otherwise, in respect of each year of service, to be
calculated as follows-
5. The first 15 days: with full pay
The next 30 days: with half pay.
Next 45 Days: Without pay
C. Maternity leave
A female worker shall be entitled to maternity leave with full pay for a
period of forty-five days, including both pre-and post-natal periods if she
has completed not less than one year of continuous service with her
employer. A female worker who has not completed one year of service
shall be entitled to maternity leave with half pay. On the expiry of the
maternity leave, may discontinue work without pay for a maximum
period of one hundred consecutive or intermittent days if such absence
is due to illness which does not enable her to resume work
D. Hajj Leave
Hajj leave is taken by Muslims to go perform pilgrimage. Article 87
states that ‘Each worker shall be entitled, once in the course of entire
service, to special leave without pay for performing pilgrimage’. Hajj
leaves shall not exceed 30 days and is granted once in the entire
E. Paternity Leave
Both Male and Female employees shall be entitled to five days of paid
leave to take care of their infants, and this has to be availed of within the
first 6 months of the baby’s birth.
For a comprehensive understanding of the UAE leave policy, please
read our article on the UAE leave policy here.
13. What is WPS? Is it applicable in DMCC?
WPS is an electronic salary transfer system that allows institutions and
organizations in the private sector to pay their employees through
banks, exchange bureaus and financial institutions approved by the
UAE Central Bank. Currently, Jebel Ali Free Zone Authority (JAFZA) is
the only free zone that has fully adopted the use of WPS and it is not
applicable in DMCC.
6. Please read our detailed article on UAE WPS for more information
14. What are the items included in the End of Service Benefits
calculation in the UAE?
The employee is entitled to the following end of service benefits.
Gratuity, if applicable
Repatriation ticket if applicable
Notice period pay if applicable
Any unutilized leave (Vacation) pay
Remuneration until the employee’s last day of employment
Any other outstanding payment or deduction
Any other benefit or compensation mentioned in Employment Contract
15. Is it necessary to give employees a payslip?
No. Even if it is not compulsory, It is recommended that employers
provide payslips to their workers as a document of the elements of the
remuneration received every month.
16. Is it possible for a DMCC employee to be barred from working
in the UAE?
Yes. A DMCC employee can be banned in two (2) situations. The
Immigration Department issues bans in response to a DMCC NOC. The
following submissions can result in DMCC issuing a NOC:
An employee’s criminal history as indicated by a police report; or
A hospital certificate stating that the employee has tested positive for a
sickness that is not tolerated in the UAE. The individual who has been
barred from entering the UAE would be unable to do so until the ban term
Cost-effective, efficient, and timely payroll process of wage payment is critical
to a business’s success, be it a company in DMCC or anywhere in the GCC.
The payroll function’s responsibility is not confined to computing employee
wages; it also includes the effective administration of a variety of additional
components such as leave, travel expenses, accruals, and other HR activities.
7. The process of payments for employees is simplified and processed by payroll
providers who provide accurate and timely service to companies.
The process of payroll in UAE is a little complicated and time-consuming;
hence it is always recommended to outsource your company’s payroll
function. Outsourcing payroll in UAE will ensure the assistance of a team of
trained payroll professionals and it frees up the time of the organization,
helping them focus on other projects that add value to their business.
One should be extra vigilant while selecting their payroll provider, as payroll
data is highly sensitive, and one should opt for a provider that can ensure high
levels of data security.
As a leading payroll outsourcing company, HLB HAMT can help solve your
payroll complexities through customized strategies. We take care of our
clients’ entire payroll cycle that includes preparation of payroll reports,
processing salary payment with WPS compliance, accrual management
including Gratuity, pension funds, an online portal for accessing payslips, and
many more. Our leadership team spends the necessary hours in every
project, ensuring our clients get refined consulting services to take your
business forward. HLB HAMT provides payroll in UAE, Bahrain, Qatar, Saudi
Arabia, Kuwait, and Oman.
To know more about our payroll process, click here.
Whilst every effort has been made to ensure the accuracy of this information,
HLB HAMT will not accept any liability arising out of errors or omissions.
Please note that this blog is not all-inclusive. Our guidance is designed only to
give general information on the issues/topics covered. It is subjected to
change and not intended to be a comprehensive summary of all laws which
may be applicable to your situation, treat exhaustively the subjects covered,
provide legal advice, or render a legal opinion.
8. Payroll Process in Dubai Multi
Commodities Centre (DMCC)
Level 18, City Tower-2,
Sheikh Zayed Road
PO Box 32665
Dubai – United Arab Emirates. Tel: +971 4 327 7775