Dubai, UAE : In a move to modernize wage practices and provide greater flexibility for both employers and employees, UAE labour regulations now recognise six distinct methods by which salaries may be paid under an employment contract. These options allow parties to agree on the arrangement that best suits the nature of the work, while ensuring legal protection under the Ministry of Human Resources and Emiratisation (MoHRE).
What the Six Salary Payment Methods Are
Under current labour regulation, the following salary payment options are recognised:
- Monthly Salary
This is the most common method. An employee receives a fixed sum every month—typically covering basic wage, allowances, and bonuses. - Weekly Salary
Applicable in trades or roles where shorter payment cycles make sense, wages are disbursed weekly based on agreed terms. - Daily Wage
For temporary or day-rate roles, payment is made per day worked. - Hourly Wage
Workers may be paid strictly per hour, often used in part-time or shift work contexts. - Commission-Based Wage
Common in sales or commissionable roles, compensation is tied to performance—e.g. a percentage of sales or deals. - Piece-Rate Wage
Payment is linked to the volume produced or units completed; workers are rewarded for output rather than time.
Each method must be clearly stipulated in the employment contract and mutually agreed upon by employer and employee. These options reflect the flexibility built into the labour law to accommodate diverse job types and modern work arrangements.
Why the Flexibility Matters
The recognition of multiple salary payment methods helps align compensation with the nature of specific roles. For example, paying a salesperson solely via commission better incentivises performance, while hourly wages enable part-time flexibility.
This flexibility is particularly useful in sectors such as retail, hospitality, gig work, and craftsmanship, where rigid monthly pay cycles may not match the operational rhythm.
Moreover, the law ensures that regardless of the payment method chosen, certain protections apply—such as timely payment and oversight through the UAE’s wage protection systems.
Legal & Compliance Safeguards
Though these payment methods are flexible, they must still comply with overarching wage legislation:
- Wage Protection System (WPS)
All private sector wages must be disbursed via the WPS through approved banks, exchange houses, or financial institutions. This ensures traceability, transparency, and legal recourse in case of non-payment.
- Due Date & Delay Penalties
Salaries must be paid on time—typically within 15 days after the due date specified in the contract (unless a shorter interval is agreed). Delays can trigger penalties under MoHRE oversight.
- Currency & Method
Payment is usually made in UAE dirhams. Other currencies may be used if both parties agree explicitly in the contract.
- Clarity in Contract
The employment agreement must clearly define which payment method applies, plus how variable components (such as commissions) are calculated. - Fairness & Evidence
For piece rates or commission roles, employers must maintain records and transparent calculation methods so employees can verify their earnings.
Benefits & Challenges for Employers & Employees
Benefits
- Alignment with job nature: Employers and workers can choose payment structures suited to role dynamics.
- Greater adaptability: Useful in flexible, variable, or project-based work.
- Motivation & performance: Commission and piece rates provide direct incentives for productivity.
Challenges
- Complex payroll administration: Multiple payment structures can complicate payroll processes.
- Disputes & transparency: Especially in commission or piece-rate roles, calculation disputes may arise.
- Contractual clarity: Ambiguous contracts risk misunderstandings or legal issues if terms aren’t clearly defined.
Adoption of a flexible payment method does not exempt an employer from regulatory requirements like WPS compliance, timely payments, or ensuring fairness in deductions.
