Tally Payroll in UAE: Can It Handle WPS and Gratuity?

Most of us think of payroll as just a salary handling system at the end of the month. But in the UAE, it’s rarely that simple. UAE business owners already know there’s more to it, including compliance, rules, and government checks that no one can ignore.

You may have software that flawlessly manages all regular salary-related calculations, like allowances and deductions. However, the question is, can it comply with all the WPS (Wage Protection System) rules and calculate gratuity exactly as per the labour law, while maintaining every record intact?

Well, just forget about other solutions, Tally Prime UAE can excellently do that. It provides features to deal with every Middle East compliance and to avoid fines, penalties, and damaged reputation.

So, with the right setup and reliable tally partner, you can process salaries, generate WPS files, and calculate gratuity payouts.

Payroll in the UAE

The UAE federal Labor Law never leaves room for errors. It applies to both onshore businesses licensed by the DED (Department of Economic Development) and companies established in the UAE free zones. Here, compliance is expected for companies of all sizes; otherwise, legal issues and penalties may chase you and your profit.

Salary Payment in the UAE

Companies must clear their employee' wages within the required day mentioned in the employment contract. It’s mandatory to pay them within 15 days of the mentioned date, but in case there’s no specific date mentioned in the contract, then employees must be paid once every month.

Payroll and Leave Calculations

Here’s another thing that can leave a solid impact on your payroll, and that’s leave.

Annual Leave: As per the UAE government, employees who have completed at least one year in an organization can get 30 days of paid leave in a year. And those who are there in the company for six months are eligible to get 2 paid leaves per month.

Sick Leave: In the UAE, the total amount of sick leave is 90 days, which includes both paid and unpaid. It initially starts with 15 days paid leave, half paid for the next 30 days, and for the additional 45 days, it’ll remain unpaid. Additionally, employees on their probation periods are not eligible to get paid sick leave.

Maternity and Parental Leave: The maternity leave varies across different Emirates in the UAE. Still, Article 19 of the Federal Decree Law No. 49 of 2022 says a permanent female employee is eligible to get 90 days of paid maternity leave. And as per Article 20, either mother or father is eligible to get 5 working days of paid paternal leave for the child.

Unpaid Leave: If the employee exceeds the paid leave days or they are not eligible for the same, then there’ll be a deduction from their salary, which’ll be calculated as per the number of their working days.

• Let’s see how: Suppose you are getting AED 15,000 per month and the working days are 22 (excluding Saturdays and Sundays). So you are getting AED 681.81 per day. Now your employer can deduct that amount from your salary each day.

Gratuity and End of Service Benefits

This is the most salient part of payroll that every UAE business must obey. In the UAE, it’s mandatory for businesses to provide Gratuity or end-of-service benefits to their employees once the contract ends. Employers need to calculate the amount according to the service length and the last basic salary of the employee. Also, this is not applicable to those employees who haven’t completed at least one year in the company.

WPS (Wage Protection System) and Payroll

The MOHRE (Ministry of Human Resources and Emiratisation) has introduced the UAE with an electronic system for salary transfer, called WPS (Wage Protection System), to ensure employees are getting their salaries accurately and on time. This system works with some approved banks, including the Central Bank of the UAE. Employers must comply with the entire process to avoid fines and penalties.

As an employer, you must follow these rules:

• Create proper WPS files and submit them through the required channels.

• There must not be any errors in the data, else it can be rejected.

If you are non-compliant, then there are many penalties waiting. It includes fines, suspension of both new and existing work permits, and legal actions.

In this scenario, having reliable payroll software for WPS and Gratuity is a must, and here, Tally UAE can be your ultimate savior.

How and Where Tally UAE Helps the Most

WPS

With Tally Cloud in place, employers can stay untroubled now. This system helps users to set up detailed employee profiles, map their salaries, and define the allowances or required deductions. Tally can efficiently generate SIF files in the format that UAE banks require.

What Businesses can expect:

• They can store their IBAN (International Bank Account Number) and other designation details directly inside the system.

• It seamlessly runs payroll according to the UAE rules.

• You can now export ready-to-submit WPS files.

• Tally customization helps to maintain a clean record for audits.

Once payroll is processed, generating the WPS file is just another step.

Gratuity

Once you’ve defined employee data, joining date, basic salary, and end date, Tally can calculate gratuity automatically.

• It applies different formulas depending on service length.

• Reports forecast gratuity liabilities ahead of time.

All calculations are tied to the basic salary component, which keeps them accurate and legally aligned.

Who Benefits the Most with Tally

Payroll directly integrates with your Tally accounting ledgers, and it makes compliance consistent every month. Here’s which companies get the most out of Tally.

• Freelancer: If you’re working alone, then Tally Single User can be your best choice.

• Growing startups: Tally Multi-User is great for companies that are currently growing. 

• Large Enterprises: If you are running a large enterprise, then use Tally Cloud with custom payroll modules to stay fully compliant.

So, it’s clearly visible now that Tally is efficient in handling WPS and gratuity in the UAE. Tally Prime provides you with everything, including SIF files to calculate the Gratuity amount on one platform.

Just add in Tally Renewal and you have a reliable system that simplifies payroll cycles month after month.

If you’re still managing salaries outside of Tally, maybe it’s time to put everything under one system and let Tally do the heavy lifting.