In the beginning, as the economy of UAE and other GCC countries are developing day by day due to scaling of businesses, salary slip format UAE as well as salary certificate becomes an important document. Moreover, in recent years the scale of hiring employees in the UAE has increased rapidly. Furthermore, the salary slip becomes an essential document for every employee.
What is the Importance of Salary Slip format UAE?
A salary slip format or pay slip is an essential document that contains important details related to an employee’s salary. Similarly, this new concept for startups in the UAE signals that HR managers allows a structured approach.
In addition, all the employees have the right to get a salary slip format whether it is in the form of a physical document or a soft copy.
This helps employees to check their CTC, basic salary, deductions and allowance. In addition, a salary slip format is necessary for receiving eligible government benefits and subsidies.
Thus, in the UAE, all employees, regardless of their working hours or contracts, must receive a salary slip.
What is the Salary Slip Format UAE?
The salary slip format in UAE contains all the necessary details as mandated by the UAE government. Additionally, an employer can provide a salary slip to employees which contains all the basic components mandated. Furthermore, these components include:
Salary Slip Format Includes :
- Payroll Identification number or Employee ID
- Details of the employer
- Employee attendance
- Company tax code
- Deductions
- Payroll processing details
1. Payroll Identification number or Employee ID
Generally, employers provide a unique identification number. Furthermore, this number is created by the payroll. Moreover, these numbers can be configurable as per the preferences. Besides, in most companies the initial two letters of the employee ID denote the name of the company and the last two digits denote the employee number.
2. Details of the employer
In the UAE employers must mention the organization’s name and head office address. Moreover, it is also necessary to mention the month for which the HR manager operates the salary slip format.
3. Employee Attendance
The pay slip should include the number of days the employee was present in the organization if no leaves were taken. Hence, if there are any Loss of Pay (LOP) days, they should also be mentioned in the salary slip.
4. Company Tax Code
If employees are required to pay any tax, they are provided with a unique tax code that they can use to calculate the tax deducted. In UAE, businesses withhold 5% of salary as a pension contribution.
5. Deductions
In most countries, you are required to pay taxes on the amount of income you earned but UAE has different laws. Your gross income is what you receive after completing a month. So there is no column of deduction in the salary slip format of UAE.
6. Payroll processing details
This section includes the details of the bank account where the employer deposits your salary. Moreover, the Labor Ministry of UAE has made it necessary for employers to provide these details using the WPS system.
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How to Calculate Wage of Employees in Salary Slip Format UAE?
Wages forms an integral part of the salary slip format in the UAE. Furthermore, you need to mention the salary details of the employees which include:
- CTC
- Basic salary
- HRA (House Rent Allowance)
- Conveyance Allowance
- Medical Allowance
- Perks
- Net Salary
1. CTC (Cost to Company)
Cost to the company refers to the total cost incurred by the organization. It is the total salary package of an employee which includes basic salary, allowances and other benefits provided.
2. Basic Salary
Basic salary or in-hand salary refers to the amount an individual receives after all the deductions. This amount may differ from organization to organization and ranges around 60% of CTC.
3. HRA (House Rent Allowance)
This amount, included in the CTC, is paid for the accommodation of the employee in the employer’s city. Additonally, most companies provide HRA to employees hired from abroad.
4. Conveyance Allowance
The employer pays this amount for employees’ commute from home to work and back. Therefore, this amount varies from organization to organization depending upon their policies.
5. Medical Allowance
Employers pay this amount to their employees to cover medical expenses. Although, some organizations provide the full amount for the expenses incurred while some provide a fixed amount.
6. Perks
This section of an employee’s salary slip is left vacant until extra perks or bonuses are provided. Since companies generally provide bonuses on various festivals. It may vary from organization to organization.
7. Net Salary
In most of the salary slip format issued in UAE, the net salary has a specified formula. So, if you as an employer are creating salary slips you must use the formula.
Calculation:
⁂ Net salary = Gross Salary – Deductions
What is the Salary Certificate format in UAE?
As the name itself suggests, Salary certificates are an official document which contains an organizational seal. Generally, this document is proof that the particular employee has worked with a specific company for the stated period of time. Even then , it varies from salary slips in the UAE. Thus, the salary slip format contains the financial details of the employee whereas it is not necessary for a salary certificate to contain those details.
Typically following details are mentioned in the salary certificate of an employee in UAE:
- The issued date
- Name of the employee
- Gender of the employee
- Designation of the employee in organization
- Joining date
- Net and total compensation of the employee
- Reimbursement and perks (if any)
Moreover, the signatory of the salary certificate must mention the name, designation, contact details and location. Generally it is issued by the HR of the organization.
In addition to the salary certificate, another document issued to employees in the UAE is a letter of employment. A salary certificate letter contains a specific letter. Furthermore, this document can be used according to the purpose for which the salary certificate was issued.
Difference Between Salary Slip & Salary Certificate
| Factor | Salary Slip | Salary Certificate |
|---|---|---|
| Purpose | Monthly proof of salary | Official proof of employment and income |
| Frequency | Issued monthly | Issued on request |
| Salary break-up | Yes | Usually shows the gross/net amount |
| Used for | Loans, financial planning | Bank loans, visa applications, proof of employment |
| Format | Detailed tabular format with earnings and deductions | Official letter with employer’s seal and signature details |
Conclusion of Salary Slip Format
In conclusion, to generate multiple salary slip format in the UAE, a robust HR software is required to eliminate manual tasks. In addition, a robust software like Zimyo can help you streamline all your HR tasks and helps to run an automated payroll that reduces the effort of manually calculating the leaves, LOP days, overtime etc. Moreover, it helps you to seamlessly generate number of salary slip format at a time.
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FAQ's (Frequently Asked Questions)
What is Salary slip form UAE?
Salary slip form UAE is a format document, that is, offered by the employers to their employees every month and that reflects the details of the salary an employee has earned, i.e. basic salary, allowances, deductions and net salary. It is an authorized document, which can be evidenced as a source of income to address to different needs such as visa application, loan approvals and financial planning.
Is salary slip form required in UAE?
Yes. Concerning the employment in the UAE labour laws, every month employees should receive a salary slip form at the end of the month regardless of the nature of employment. This provides the payroll with the transparency and the adherence to the Wage Protection System (WPS).
What are the main details of salary slip form UAE?
A typical salary slip in UAE entails:
- Organisational and employee information
- Salary month
- Minimal Wage and gross income
- Tax deductions (monthly disability benefits, LOP, NY loans).
- Net salary
- Bank account details/Mode of payment
To who can a salary slip form UAE be issued?
All employees, the local and the expatriate who has an employer in UAE are meant to be given a salary slip form in UAE. Even casual or part-time worker is expected to be given a payslip that indicates the earnings.
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