As your business in UAE continues to grow, implementing reliable payroll practices will become very tricky but crucial exercise. As a company grows bigger, payroll complexities become greater. But, regardless of the size, there’s a couple of basic principles which your business should embrace. This is to ensure that you are running your company payroll appropriately.
When running payroll in UAE, it is often best to work with a specialist such as an outsourced payroll service provider. This is to avoid the cumbersome administrative work associated with payroll processing. Remember that effective payroll management is key in ensuring your legal obligations related to payroll are met.
In this article, we’ll walk you through five important steps for processing payroll in UAE. Let’s start!
Step 1: Register the company to UAE’s Wages Protection System.
Registration and set up of your company to UAE’s Wages Protection System (WPS) is mandatory. WPS is an electronic system for salary transfer, which enables all businesses operating and registered in UAE to pay the wages of employees through approved financial institutions.
WPS in UAE safeguards the interests of employers and employees alike, and provides a more seamless system in reducing both time and effort which are required in paying due wages.
Take note: the local economic authorities in UAE won’t deal with businesses that aren’t registered with WPS, which is why it’s necessary to under WPS registration. This can be through the help of a payroll outsourcing service in Dubai, UAE.
Step 2: Select the frequency for making employee payments.
You will have to decide on the frequency you want in paying company employees. Before you make a decision on how often your employees receive their wages each month, either monthly, weekly, or biweekly. make sure you take into consideration your company cash flow.
There are advantages and disadvantages for all frequency options. A smaller business will want more frequent or weekly payments to employees, especially with hourly-wage or short-term workers. A bi-weekly payment frequency is common in UAE as it’s easy in administering. Monthly is the option that’s rarely used in UAE; however, it is a great option for a company with a workforce which is largely based on commission.
Step 3: Collect the payroll data.
Before you start processing company payroll in UAE, you’ll need access onto all payroll-related information. Consult with a specialist on payroll processing in UAE or an account to make sure that you are gathering the correct data. In general, what you will need to process payroll are as follows:
- Name of each employee
- Address of each employee
- The contact details
- Date of hiring
- Date of birth
- Amounts that are due to each employee
- Type of pay e.g., hourly or salary
You may also want to gather other information such as banking information and vacation accrual.
Step 4: Complete the calculations.
There are a lot of options for businesses in UAE to process payroll. The calculations can be done inhouse through the hiring of the appropriate internal resources while making sure they’re adequately trained in ensuring the business is fully compliant to relevant payroll regulations. Another option for processing pays of employees is outsourcing it to a reputable service provider offering payroll service in Dubai or anywhere in UAE.
If you choose the outsourcing option, you need to make sure that you keep the correct records in order to produce year-end reports. Year-end reports may be supplied by an outsourced firm, depending on the payroll package and your agreement with the payroll vendor.
Step 5: Evaluate the entire process.
You should always evaluate the payroll process. Determine how you will be able to streamline the entire operation. As your business grows, its payroll needs also evolve. What worked when it was smaller may not work or be adequate anymore as the business develops.
With payroll outsourcing in UAE to a reliable service provider such as FAR Consulting Middle East, you have access to payroll specialists. A professional can help you find out whether your current payroll practices are effective and efficient, and determine whether or not there are gaps and opportunities to improve your payroll process.
Outsourcing firms providing payroll services in UAE also help in the setup of pay types in categorizing various employee earnings. This is so direct labor costs may be directed to the different accounts of the company general ledger. An outsourced payroll service provider in Dubai, UAE can assist you in setting up deductions, accruals, and benefits to automate the entire process of subtracting the voluntary and mandatory deductions; calculating the benefits; and tracking all the applicable accruals for each payroll cycle. There is also the option of having an outsourced firm handle the entire payroll obligations of businesses in UAE.
To know more, don’t hesitate to consult with payroll specialists in Dubai, UAE!