How to Setup Payroll in UAE for the First Time

1. HowtoSetupPayrollinUAEfortheFirstTime • August23,2022 • Asabusinessowner,youmaybewellawareregardingtheresponsibilitiesyouhaverelated to payroll, complying with local employment regulations, and paying your employees. With thatinmind,thereis a needtosetupapayrollsystem.Therearefouroptionsforbusiness ownerswhenitcomestoapayrollsystemandtheyarethefollowing: • Doingpayrollbyhand–payrollthatis donebyhandcanbepossible,butit can be inefficient and time-consuming, especially with a business with a numberofemployees. • Utilizingapayrollsoftware–usingasoftwareforpayrollprocessingallows • forbettermanagementofpayingemployees,providedthatthesoftwareis runningproperly. • Hiringanaccountant–withhiringanaccountant,themainbenefitis the • fact that the accountant is familiar with all the responsibilities related to payrollprocessinginUAE.However,thiscanbecostly,astheaccountantmay requireanentiredepartmentto assistwiththemanagementofpayroll. • Outsourcing payroll processing to experts – payroll outsourcing in UAEcanalleviatetheworkloadofbusinesseswithouthavingtoacquire • equipmentandhirenewstafftocompletepayrollprocessing.However,there • isaneedtomakesuretheoutsourcedfirmhiredbyabusinessisreputable andestablishedtoensureproperprocessing.

2. Regardlessofthesystemthatyouchoosetosettleon,thereisaneedtohavethefollowing setup: • Theoptionforemployeestoeithergettheircompensationthroughdirect depositorcheque; • Thereportingofwithholdingsandearningsofeverysingleemployee,aswell asthetotalwithholdingamountssenttotherightagenciesorauthorities • Ifyouchoosetodopayrollprocessingonyourown,hereiswhatyouneedingettingstarted withthetask: • Find out The Differences Between an IndependentContractorandEmployee • There can be huge differences as to how you pay independent contractors or freelancers and employees. Knowing how the two kinds of employees will have an impact on your payrollis crucialfor abusinessownertounderstand. Youmayalreadyknowhowdifferent thepaystructuresofyouremployees.If so, takenoteofthat. • Also Read:TypesofPayrollSolutionsforBusinessesinUAE • SettleonThePayPeriod • In the United Arab Emirates, pay periods are commonly by the end of every month, weekly, biweekly,andsemi-monthlywhichistwiceinonemonth:onthe15thand1stofeverymonth. Since payroll specialists run the monthly reports, they’re often happier with semi-monthly periodsastheycalculatetwentyfourtimesthroughoutoneyear.Thebenefitsarealsoevery month,soasemi-monthlyasthepayperiodwillmakethedeductionseasiertomanage. • As for biweekly pay periods, they are preferred by employees that are paid by the hour as wellasthosewhoworkovertime.Theycan besimplycalculatedaswell.Sincesemi-monthly pay employees that work by the hour at 86.67 hrs with every pay period, calculation for overtime may be complicated especially when compare to monthly and semi-monthly calculations. • Weeklypayperiodswouldbetheonesthataremostfavoredbytradeindustries,including contraction. Some businesses tend to avoid pay periods that are weekly as they can be expensiveandserviceprovidersthatofferpayrollservicesinUAEchargewithevery payroll processasit iscertainlytime-consuming. • Besides finding the most appropriate pay period for your business and employees, you shouldalso considertheregulationsregardingpayperiodsintheareainUAEthatyouare operatingin. • AlsoRead:WhatisPayrollProcessingServices? DocumentEmployeeCompensation

3. Precise payroll records would be a necessity with businesses. It is, therefore, essential to haveasystemsetupinplacewhich canaccuratelytrackemployeecompensation,business deductibles,howthebusinessishandlingpaidtimeoff,andemployeehours.Ifyouarenot sure as to where to start, then this is the best time to consult with specialists on payroll outsourcinginUAE. AlsoRead:PayrollAccounting:EverythingYouNeedtoKnow OrganizeRecords There are regulations that require businesses in the UAE to keep records for a specific amountoftime.Togiveyouanexample,employeeinformationhastobekeptforatleast sixyearsevenwhentheyleavetheorganization.Certainrecordsalsohavetobekeptand stored properly and they include designation of the employee, employee name, address, andcontactnumberamongothers. Dealing with numbers is already hard enough for most of us. Dealing with numbers and employeesatthesametimecan provetobeabiggerheadacheas a businessgrows.Ifyou want to make sure you handle payroll processing properly, talk to us. Our experts will be abletoadviseyouonpayrollprocessingbasedonyourspecificneedsandrequests.Callus todaytobookaninitialconsultationwithourexpertsonpayrollprocessinginUAE.