---
name: ae-payroll-social
description: "Source-cited draft: payroll & social contributions for United Arab Emirates (tax year 2025) — rates, thresholds and rules with primary-source citations. Unverified; pending local-accountant review."
license: "AGPL-3.0-or-later (code) / OpenAccountants Guide License v1.0 (content)"
metadata:
  source: openaccountants
  openaccountants_url: "https://www.openaccountants.com/skills/ae-payroll-social"
  jurisdiction: "AE"
  tax_year: "2026"
  last_updated: "2026-10-16"
  authored_by: "Michael Cutajar and the OpenAccountants team"
  trust_label: "Built by Michael Cutajar and the OpenAccountants team"
  review_status: "pending_review"
---

# UAE payroll for tax year 2026: no tax on wages, what the employer's tax return and VAT return do with payroll, and the pension, gratuity and insurance points to confirm

## Scope and who this is for ([Cabinet Decision No. 49 of 2023](https://tax.gov.ae/DataFolder/Files/Legislation/05-06-2023/3/Cabinet%20Decision%20No.%2049%20of%202023%20-%20for%20publishing.pdf); [CTGTNP1: Taxation of natural persons](https://tax.gov.ae/Datafolder/Files/Guides/CT/Taxation%20of%20natural%20persons%20-%2025%2011%202023.pdf))

This skill is for anyone running or advising on a UAE payroll in calendar year 2026: an employer, a payroll provider, or an accountant answering "what do I deduct from this salary, and what does the company owe?". Figures are for tax year 2026, the calendar year, and the law as published on 25 September 2026.

What it covers:

- Why no income tax is withheld from wages, and where the line sits between an employee (no tax) and a self-employed person (possible Corporate Tax).
- How the employer's own Corporate Tax return treats salaries, benefits, directors' pay and pension contributions.
- How the employer's VAT return treats goods and services given to staff, including the rule that changes on 1 October 2026.
- The social side of payroll: the state pension scheme for UAE nationals (and GCC nationals), the end-of-service gratuity for expatriates, the Wage Protection System and the unemployment insurance scheme.

**Read this before relying on the social side.** The pension, labour and unemployment-insurance rules are made and published by the General Pension and Social Security Authority (GPSSA), the Abu Dhabi Pension Fund (for UAE nationals employed in Abu Dhabi), the Ministry of Human Resources and Emiratisation (MOHRE) and the federal legislation portal. This skill only cites the Federal Tax Authority and the Ministry of Finance. So it tells you **which** social rules apply and **what to confirm**, but it does not state pension rates, salary caps, payment days, gratuity day-counts or insurance premiums. Where you see "check", confirm the point with the body named before you run the payroll.

Companion Skills: Corporate Tax for the employer is in `ae-corporate-tax`; the individual's own position (including when a self-employed person must register) is in `ae-income-tax`; VAT registration and returns are in `uae-vat`.

## What UAE payroll does and does not involve ([Cabinet Decision No. 49 of 2023, Articles 1 and 2](https://tax.gov.ae/DataFolder/Files/Legislation/05-06-2023/3/Cabinet%20Decision%20No.%2049%20of%202023%20-%20for%20publishing.pdf); [CTGTNP1, section 3.8.1](https://tax.gov.ae/Datafolder/Files/Guides/CT/Taxation%20of%20natural%20persons%20-%2025%2011%202023.pdf); [CTGDTI1: Determination of Taxable Income](https://tax.gov.ae/DataFolder/Files/Pdf/2024/Determination%20of%20Taxable%20Income%20-%2031%2007%202024.pdf))

**No tax on wages.** The UAE has no personal income tax. A natural person is only taxed on income under Corporate Tax, and only on business income; a natural person's Wage is outside it "regardless of the amount of Turnover". So there is nothing to calculate or withhold from an employee's pay for tax, and no employee tax return to file.

**What counts as a wage.** The official definition is wide: "the wage that is given to the employee in consideration of their services under the employment contract, whether in cash or in kind, payable annually, monthly, weekly, daily, hourly, or by piece-meal, and includes all allowances, and bonuses in addition to any other benefits provided for, in the employment contract or in accordance with the applicable legislation in the State". Allowances, bonuses, benefits in kind and benefits due under UAE legislation (such as the statutory end-of-service gratuity) all fall inside it.

**No withholding tax either.** Corporate Tax law contains a withholding tax on certain payments to non-residents, but the FTA states "The current Withholding Tax rate applicable in the UAE is 0%", and the categories of income it would apply to have not been specified by Cabinet Decision. It does not reach wages.

**Employee or not is a question of fact.** The FTA says "whether a natural person is an employee and earns a salary or other form of remuneration as such, is a question of fact to be determined on a case-by-case basis". A person working under an employment contract is paid a Wage. A person who works for themselves and is not employed by the payer is running a Business, and if that person's business turnover exceeds AED 1,000,000 in a calendar year, that person must register for and pay Corporate Tax. The payer withholds nothing either way; the obligation is the contractor's own.

**Directors' fees.** "Generally, director fees will not be considered as a Business or Business Activity, and therefore would not be subject to Corporate Tax." Where a director is also an employee, the FTA's example treats both the salary and the board fees as a Wage.

**What payroll does involve:**

| Obligation | Who it applies to | Who runs it | Status in this skill |
|---|---|---|---|
| Income tax withholding | Nobody | None | Not applicable; no tax on wages |
| State pension contributions | UAE national employees; GCC nationals under arrangements for their home scheme | GPSSA, or the Abu Dhabi Pension Fund for UAE nationals employed in Abu Dhabi | Check coverage, rates, salary cap and due date with the right fund |
| End-of-service gratuity | Expatriate employees under the Labour Law | MOHRE | Check the day-count, basis and cap with MOHRE |
| Wage Protection System | Employers registered with MOHRE | MOHRE | Check which employers and which pay dates |
| Unemployment insurance | Employees | MOHRE | Check who must subscribe and the premium |
| Corporate Tax deduction for payroll | Employers that are Taxable Persons | FTA | Covered below |
| VAT on staff benefits | VAT-registered employers | FTA | Covered below |

## Ask the client first

- Is the worker employed under an employment contract, or engaged as a contractor or freelancer? If a contractor, how much business turnover do they have in the calendar year?
- What is the worker's nationality: UAE national, another GCC nationality, or expatriate? The social scheme depends on it.
- For a UAE national: in which emirate are they employed? UAE nationals employed in Abu Dhabi are registered with the Abu Dhabi Pension Fund rather than GPSSA (check with the fund).
- For a UAE national: when were they first insured? The pension rules differ by when the person was first insured, so confirm the right regime with GPSSA, or the Abu Dhabi Pension Fund for UAE nationals employed in Abu Dhabi.
- Is the employer on the mainland or in a free zone, and which authority licensed it? This decides whether MOHRE's systems and the federal Labour Law gratuity apply, or a free zone's own employment rules.
- Is the employer a Taxable Person for Corporate Tax, and what is its Tax Period? Is it VAT-registered?
- Which benefits does the employer give beyond cash salary: accommodation, health insurance (and for which family members), cars, flights, staff events?
- Does the employer pay into a private pension or end-of-service savings fund for staff? How much, and has it actually been paid in the Tax Period?
- Are any employees or directors also shareholders, or related to shareholders?

## The method, step by step

1. Classify each person. Employment contract means Wage; no tax is withheld. Self-employed means the person handles their own Corporate Tax position, and you withhold nothing. If you cannot tell, treat it as a question of fact and look at the contract and how the work is done, not the label on the invoice ([CTGTNP1, section 3.8.1](https://tax.gov.ae/Datafolder/Files/Guides/CT/Taxation%20of%20natural%20persons%20-%2025%2011%202023.pdf)).
2. Sort employees by nationality. UAE nationals (and GCC nationals) go through the GPSSA pension process, or the Abu Dhabi Pension Fund for UAE nationals employed in Abu Dhabi (check); expatriates do not, and instead accrue the Labour Law end-of-service gratuity. Get the current rates, contribution salary basis, cap and monthly due date from the right fund before the first run. If you do this step after paying salaries, the employee share will not have been deducted and has to be recovered later.
3. Confirm the MOHRE obligations for the employer: whether it must pay through the Wage Protection System and on what timetable, and which employees must hold unemployment insurance. Free zone employers: check the free zone's own rules first.
4. Run payroll: gross pay, less the employee's pension share where it applies (check), less any other lawful deductions. No tax line.
5. Accrue the end-of-service gratuity for expatriate staff each month so the liability is in the accounts when the person leaves. Confirm the day-count and the pay basis with MOHRE or the free zone.
6. For the employer's Corporate Tax return, deduct payroll costs as Business expenditure, test related-party pay at Market Value, and cap private pension fund contributions at the limit shown under the figures below ([CTGDTI1](https://tax.gov.ae/DataFolder/Files/Pdf/2024/Determination%20of%20Taxable%20Income%20-%2031%2007%202024.pdf); [Ministerial Decision No. 115 of 2023](https://mof.gov.ae/wp-content/uploads/2023/05/Ministerial-Decision-No.115-of-2023-on-Private-Pension-Funds-and-Private-Social-Security-Funds-for-Corporate-Tax-Purposes.pdf)).
7. For the employer's VAT return, block input tax on goods and services given free to staff for their personal benefit unless an exception applies, and apply the stricter accommodation wording to supplies from 1 October 2026 ([VAT Executive Regulation, Article 53](https://mof.gov.ae/wp-content/uploads/2025/10/Cabinet-Decision-No.-52-of-2017-of-the-Executive-Regulation-of-the-Federal-Decree-Law-No.-8-of-2017-on-Value-Added-Tax-and-its-amendments.pdf); [Cabinet Decision No. 149 of 2026](https://mof.gov.ae/wp-content/uploads/2026/09/Cabinet-Decision-No.-149-of-2026-Amending-Certain-Provisions-of-The-Executive-Regulation-of-VAT-EN.pdf)).
8. File and pay each item on its own timetable (see "Filing and payment" below) and keep the payroll records that support the Corporate Tax deduction.

## Figures for tax year 2026 ([Cabinet Decision No. 49 of 2023](https://tax.gov.ae/DataFolder/Files/Legislation/05-06-2023/3/Cabinet%20Decision%20No.%2049%20of%202023%20-%20for%20publishing.pdf); [CTGDTI1](https://tax.gov.ae/DataFolder/Files/Pdf/2024/Determination%20of%20Taxable%20Income%20-%2031%2007%202024.pdf); [Ministerial Decision No. 115 of 2023](https://mof.gov.ae/wp-content/uploads/2023/05/Ministerial-Decision-No.115-of-2023-on-Private-Pension-Funds-and-Private-Social-Security-Funds-for-Corporate-Tax-Purposes.pdf))

| Item | 2026 figure | Official source |
|---|---|---|
| Income tax withheld from a Wage | None; Wage is outside Corporate Tax whatever the amount | [Cabinet Decision No. 49 of 2023, Article 2(2)(a)](https://tax.gov.ae/DataFolder/Files/Legislation/05-06-2023/3/Cabinet%20Decision%20No.%2049%20of%202023%20-%20for%20publishing.pdf) |
| Withholding Tax rate (non-resident payments, not wages) | 0% | [CTGDTI1, page 17](https://tax.gov.ae/DataFolder/Files/Pdf/2024/Determination%20of%20Taxable%20Income%20-%2031%2007%202024.pdf) |
| Business turnover above which a self-employed natural person is in Corporate Tax (calendar year) | exceeds AED 1,000,000 | [Cabinet Decision No. 49 of 2023, Article 2(1)](https://tax.gov.ae/DataFolder/Files/Legislation/05-06-2023/3/Cabinet%20Decision%20No.%2049%20of%202023%20-%20for%20publishing.pdf) |
| Maximum deductible private pension fund contribution per member | 15% of the member's total remuneration that is deductible in the Tax Period | [Ministerial Decision No. 115 of 2023, Article 5(2)](https://mof.gov.ae/wp-content/uploads/2023/05/Ministerial-Decision-No.115-of-2023-on-Private-Pension-Funds-and-Private-Social-Security-Funds-for-Corporate-Tax-Purposes.pdf) |
| Entertainment for business partners, customers and similar (not staff) | 50% deduction allowed (the other 50% is disallowed) | [CTGDTI1, section 4.5.10](https://tax.gov.ae/DataFolder/Files/Pdf/2024/Determination%20of%20Taxable%20Income%20-%2031%2007%202024.pdf) |
| Staff entertainment and benefits | Fully deductible if not excessive | [CTGDTI1, sections 4.5.2 and 4.5.10.1](https://tax.gov.ae/DataFolder/Files/Pdf/2024/Determination%20of%20Taxable%20Income%20-%2031%2007%202024.pdf) |

### Social figures to confirm, not stated here

These are real and current obligations, but their figures are published by bodies this skill cannot cite. Confirm each one before the first 2026 payroll run and whenever the authority announces a change.

- **GPSSA pension (UAE nationals):** employer share, employee share and any government share; what pay counts as the contribution salary; the monthly cap; the monthly payment deadline; and the late-payment consequence. Check with GPSSA, or the Abu Dhabi Pension Fund for UAE nationals employed in Abu Dhabi. The governing federal laws are Federal Decree-Law No. 57 of 2023 and the earlier Federal Law No. 7 of 1999; read them, not a summary. The rules can differ depending on when the employee was first insured, so confirm which regime each employee is in.
- **GCC nationals working in the UAE:** check with GPSSA whether and how contributions to the employee's home-country scheme are collected, and at what rates.
- **End-of-service gratuity (expatriates):** the Labour Law, Federal Decree-Law No. 33 of 2021, sets the gratuity by length of service and basic wage. Check the day-count, the basic-wage definition, any cap and any minimum service period with MOHRE, and check free zone rules where the employer is in a free zone with its own employment law.
- **Wage Protection System:** which employers must pay salaries through it, and the deadline after the pay date. Check with MOHRE.
- **Unemployment insurance:** who must subscribe, the premium bands and the penalty for not subscribing. Check with MOHRE.

The Ministry of Finance's Ministerial Decision No. 115 of 2023 confirms that the statutory end-of-service benefit is the one "as per the provisions of Federal Decree- Law No. 33 of 2021 and Federal Law No. 7 of 1999" ([Ministerial Decision No. 115 of 2023, Article 1](https://mof.gov.ae/wp-content/uploads/2023/05/Ministerial-Decision-No.115-of-2023-on-Private-Pension-Funds-and-Private-Social-Security-Funds-for-Corporate-Tax-Purposes.pdf)). Read those laws themselves, not a summary, for the amounts.

## VAT on what the employer gives to staff ([VAT Executive Regulation, Article 53, as amended](https://mof.gov.ae/wp-content/uploads/2025/10/Cabinet-Decision-No.-52-of-2017-of-the-Executive-Regulation-of-the-Federal-Decree-Law-No.-8-of-2017-on-Value-Added-Tax-and-its-amendments.pdf); [Cabinet Decision No. 149 of 2026](https://mof.gov.ae/wp-content/uploads/2026/09/Cabinet-Decision-No.-149-of-2026-Amending-Certain-Provisions-of-The-Executive-Regulation-of-VAT-EN.pdf))

The payroll question for VAT is the input tax a VAT-registered employer pays on things it buys and hands to staff.

**The general block.** Input tax is non-recoverable "Where Goods or Services were purchased to be used by employees for no charge to them and for their personal benefit including the provision of entertainment services", unless one of the listed exceptions applies.

**The exceptions, up to 30 September 2026:**

- (1) the employer is legally obliged to provide them "under any applicable labour law in the State or Designated Zone";
- (2) it is "a contractual obligation or documented policy to provide those services or goods to those employees in order that they may perform their role" and it can be proven to be normal business practice;
- (3) health insurance, including enhanced health insurance, for employees "and their family members (as applicable) up to a husband or one wife, and three children younger than eighteen years";
- (4) the provision is a deemed supply under the VAT Decree-Law (output tax is then accounted for instead).

**What changes from 1 October 2026.** Cabinet Decision No. 149 of 2026 replaces exceptions (1) and (2). The Decision is "effective from 1 October 2026". The new texts:

- (1) now reads "Where the provision of those Goods or Services to the employees is mandatory under the applicable labour legislation in the State or any free zone, including financial and non- financial free zones, provided that this does not include the accommodation provided by the employer to its employees, unless the provision of such accommodation is mandatory pursuant to the decisions or directives issued by the Ministry of Human Resources and Emiratisation."
- (2) now reads "Where it is a contractual obligation or documented policy to provide those Goods or Services to the employees, in accordance with the cases and conditions specified by the Authority."

Exceptions (3) and (4) are not changed.

What this means in practice:

- **Staff accommodation.** From 1 October 2026 the labour-law exception no longer covers accommodation unless a MOHRE decision or directive makes it mandatory. Whether a contract or policy can still bring accommodation within exception (2) depends on the "cases and conditions" the FTA specifies. As of 25 September 2026 this skill has not seen those conditions on the FTA site; treat recovery on accommodation supplied from 1 October 2026 as unsettled and check the FTA's published guidance before claiming it. The block only matters where the accommodation carries VAT, such as a hotel stay or a hotel or serviced apartment, which are not "residential buildings" (Executive Regulation, Article 37(2)). A lease of a residential building is exempt "where the lease is more than 6 six months or the tenant of the property is a holder of an ID card issued by Federal Authority for Identity and Citizenship" (Article 43(1)), so an ordinary long staff flat lease has no input tax to block.
- **Contract or policy benefits generally.** The old test (needed for the role, and normal business practice) is replaced by the FTA's own cases and conditions. Check them before claiming.
- **Health insurance.** Recovery continues for the employee, one spouse and up to three children under 18. Input tax on cover for a fourth child, or a child aged 18 or over, falls outside exception (3) and is blocked unless another exception applies.
- **Entertainment of non-staff.** Input tax on entertainment for customers, potential customers, officials, shareholders or investors stays blocked for non-government employers.

Timing: the new texts apply from 1 October 2026; where a cost straddles that date, check with the FTA which text governs it. The changes to the input-tax apportionment rules in the same Decision start later, from the first tax year commencing after 1 October 2027; they are not payroll rules and are covered in `uae-vat`.

## Corporate Tax on payroll costs for the employer ([CTGDTI1, sections 4.5.2 and 4.5.10](https://tax.gov.ae/DataFolder/Files/Pdf/2024/Determination%20of%20Taxable%20Income%20-%2031%2007%202024.pdf); [Ministerial Decision No. 115 of 2023, Article 5](https://mof.gov.ae/wp-content/uploads/2023/05/Ministerial-Decision-No.115-of-2023-on-Private-Pension-Funds-and-Private-Social-Security-Funds-for-Corporate-Tax-Purposes.pdf); [CTGEPF1: Pension Funds and Social Security Funds](https://tax.gov.ae/Datafolder/Files/Guides/CT/Exempt%20Persons%20-%20Public%20Benefit%20Entities%20Pension%20Funds%20and%20Social%20Security%20Funds%20-%2001%2012%202023.pdf))

- **Pay and benefits are deductible.** "Employee costs are generally considered to be wholly and exclusively incurred for Business purposes provided that they are not excessive". It does not matter whether an employee is paid in cash or in benefits such as a car, medical insurance or a flight allowance for family.
- **Related-party pay is tested at Market Value.** Salary or bonus paid to directors, officers or owners "would be deductible ... but only insofar as this salary corresponds with the Market Value rates for such services rendered". Any excess is added back.
- **Staff events are not entertainment.** Staff parties, away-days and performance rewards are employee costs and fully deductible. A private event, such as a family wedding for relatives who happen to work there, is not.
- **Private pension fund contributions.** An employer "may deduct the total value of contributions made to a private pension fund in respect of its employees who are Pension Plan Members in the Tax Period in which such contributions are paid", capped at 15% of that member's total deductible remuneration for the Tax Period. Contributions not paid in the period, or above the cap, are added back.
- **Funds that hold the gratuity.** A private social security fund is "a fund created by a private employer for the purposes of providing statutory end of service gratuity payments to employees". Such a fund, and a private pension fund, can apply to the FTA to be an Exempt Person if it meets the conditions. Public pension and social security funds can also apply for exemption.

## Boundaries and exceptions ([Cabinet Decision No. 49 of 2023](https://tax.gov.ae/DataFolder/Files/Legislation/05-06-2023/3/Cabinet%20Decision%20No.%2049%20of%202023%20-%20for%20publishing.pdf); [CTGTNP1](https://tax.gov.ae/Datafolder/Files/Guides/CT/Taxation%20of%20natural%20persons%20-%2025%2011%202023.pdf); [VAT Executive Regulation as amended to 2026](https://tax.gov.ae/Datafolder/Files/Legislation/2026/Law-No-8-of-2017-and-its-amendments--09-2026.pdf))

| Situation | Treatment | Watch for |
|---|---|---|
| Employee under an employment contract, any nationality | Wage; no tax withheld | Social obligations depend on nationality (check with GPSSA, or the Abu Dhabi Pension Fund for UAE nationals employed in Abu Dhabi, and MOHRE) |
| Allowances, bonuses, benefits in kind | Part of the Wage; no tax | VAT input tax on the benefit may be blocked |
| Director who is also an employee | Salary and board fees both typically a Wage | Related-party pay deductible for the company only at Market Value |
| Non-executive director paid fees | Generally not a Business Activity; no Corporate Tax | Confirm the facts; a director running a separate advisory business is different |
| Freelancer or contractor, business turnover not above AED 1,000,000 in the calendar year | No Corporate Tax registration for that person | The payer still withholds nothing |
| Freelancer or contractor, business turnover exceeds AED 1,000,000 in the calendar year | Taxable Person; registers and files Corporate Tax | The test is "exceeds", so exactly AED 1,000,000 is not over it; Wage, Personal Investment income and Real Estate Investment income do not count towards it |
| Health insurance for employee, one spouse, up to three children under 18 | VAT input tax recoverable (exception 3) | A fourth child or a child aged 18 or over is outside the exception |
| Staff accommodation supplied from 1 October 2026 | VAT input tax blocked unless mandatory under MOHRE decisions or within FTA-specified contract/policy cases | Unsettled until the FTA publishes the cases and conditions. Matters only for accommodation that carries VAT (hotel, hotel or serviced apartment); a residential lease over six months or to an Emirates ID holder is exempt, so there is no input tax |
| Private pension fund contribution | Deductible when paid, up to the 15% cap per member | Unpaid or excess contributions are added back |

## Worked cases ([CTGTNP1](https://tax.gov.ae/Datafolder/Files/Guides/CT/Taxation%20of%20natural%20persons%20-%2025%2011%202023.pdf); [Ministerial Decision No. 115 of 2023](https://mof.gov.ae/wp-content/uploads/2023/05/Ministerial-Decision-No.115-of-2023-on-Private-Pension-Funds-and-Private-Social-Security-Funds-for-Corporate-Tax-Purposes.pdf); [Cabinet Decision No. 149 of 2026](https://mof.gov.ae/wp-content/uploads/2026/09/Cabinet-Decision-No.-149-of-2026-Amending-Certain-Provisions-of-The-Executive-Regulation-of-VAT-EN.pdf); [VAT Executive Regulation, Articles 37, 43 and 53](https://mof.gov.ae/wp-content/uploads/2025/10/Cabinet-Decision-No.-52-of-2017-of-the-Executive-Regulation-of-the-Federal-Decree-Law-No.-8-of-2017-on-Value-Added-Tax-and-its-amendments.pdf))

**Case 1: expatriate employee on the mainland.** A Dubai mainland company employs an expatriate on a monthly salary with housing and transport allowances. Payroll result: gross pay is paid in full with no tax deduction, because the whole package is a Wage. No GPSSA pension deduction, because the employee is not a UAE or GCC national. The company accrues the Labour Law end-of-service gratuity each month (check the day-count and basis with MOHRE), pays through the Wage Protection System if it applies (check), and confirms the employee holds unemployment insurance (check). The salary and allowances are deductible in the company's Corporate Tax return if not excessive.

**Case 2: UAE national employee.** Same company, a UAE national employee. No tax is withheld. Before the first run, the company confirms with GPSSA the employer and employee shares, the contribution salary, the cap and the payment deadline for this employee's regime, deducts the employee share from pay and pays both shares to GPSSA by the deadline. This skill gives no rate because it cannot cite GPSSA. Had the employee been employed in Abu Dhabi, the same steps would run through the Abu Dhabi Pension Fund instead (check).

**Case 3: private pension fund contributions over the cap.** In its 2026 Tax Period a company pays AED 120,000 into a private pension fund for one employee who is a Pension Plan Member. The employee's total deductible remuneration for the period is AED 600,000. The cap is 15% of AED 600,000 = AED 90,000. The company deducts AED 90,000 and adds back AED 30,000 (AED 120,000 less AED 90,000). Had any of the AED 120,000 been accrued but not paid in the period, that part would also be added back for this period.

**Case 4: consultant paid by invoice.** A company engages a self-employed consultant who invoices AED 1,200,000 in calendar year 2026 and has no employment contract. The payments are not a Wage. The company withholds nothing. The consultant's business turnover exceeds AED 1,000,000, so the consultant must register for and pay Corporate Tax on their own account (route the consultant to the `ae-income-tax` skill). The company deducts the fees as a business expense, at Market Value if the consultant is a related party.

**Case 5: health insurance and accommodation, VAT-registered employer.** An employer buys family health cover for an employee with a spouse and four children (ages 4, 9, 14 and 19) and, from October 2026, pays for a serviced apartment for the employee. Input tax on the cover for the employee, spouse and the three children under 18 is recoverable under exception (3). The cover for the 19-year-old is outside exception (3), so its input tax is blocked unless another exception applies. A serviced apartment is not a "residential building" for VAT, so its charge carries VAT. Input tax on the October 2026 serviced-apartment charge is blocked unless a MOHRE decision or directive makes that accommodation mandatory, or the case falls within the contract-or-policy cases the FTA specifies; until those cases are published, do not claim it without checking. Had the employer instead leased an ordinary residential flat for more than six months (or to a tenant holding an Emirates ID card), the lease would be exempt: there would be no input tax on the rent, and the Article 53 change would not arise.

**Case 6: executive director with board fees.** An employee who is a senior manager also sits on the board and receives board-meeting fees. Following the FTA's own example, both the salary and the fees are typically a Wage, so neither is taxed. If the director is also a shareholder, the company deducts the pay only to the extent it matches Market Value.

## When to refuse or refer

- Refer any pension rate, cap, deadline or penalty question to GPSSA, or the Abu Dhabi Pension Fund for UAE nationals employed in Abu Dhabi, or to an adviser who works from that fund's current published rules. Do not quote rates from memory or from private summaries.
- Refer gratuity calculations for a leaving employee, especially with unpaid leave, part-time service, a change of contract type or a dispute, to MOHRE's rules or a UAE employment adviser.
- Refer free zone employers (including the financial free zones) whose employment rules differ from the federal Labour Law to the free zone authority's rules.
- Refer VAT recovery on staff accommodation that carries VAT (hotel, hotel or serviced apartment) supplied from 1 October 2026 until the FTA's cases and conditions under the new exception (2) are published; if a claim is material, consider asking the FTA for a clarification.
- Refer any employee who also has UAE business income, or a contractor near the AED 1,000,000 turnover line, to the `ae-income-tax` skill ([Cabinet Decision No. 49 of 2023, Article 2](https://tax.gov.ae/DataFolder/Files/Legislation/05-06-2023/3/Cabinet%20Decision%20No.%2049%20of%202023%20-%20for%20publishing.pdf)).
- Refuse to present the employer's pension, gratuity or insurance figures as confirmed by this skill. It does not contain them.
- Refer tax obligations of the employee in their home country (for example, citizens of countries that tax worldwide income) to that country's rules; UAE payroll does not handle them.

## Filing and payment ([Corporate Tax Law, Articles 48 and 53](https://mof.gov.ae/wp-content/uploads/2026/01/Federal-Decree-Law-No.-47-of-2022-and-its-amendments-en-v13.1.26.pdf); [Cabinet Decision No. 149 of 2026](https://mof.gov.ae/wp-content/uploads/2026/09/Cabinet-Decision-No.-149-of-2026-Amending-Certain-Provisions-of-The-Executive-Regulation-of-VAT-EN.pdf))

- **Employee tax:** nothing to file or pay; there is no payroll tax return.
- **Pension contributions:** monthly, to GPSSA, or the Abu Dhabi Pension Fund for UAE nationals employed in Abu Dhabi. Check the due day and the late-payment consequence with the right fund.
- **Wage Protection System and unemployment insurance:** on MOHRE's timetable. Check with MOHRE.
- **Employer's Corporate Tax:** payroll costs go into the employer's Corporate Tax return, which is filed, and any tax paid, no later than nine months after the end of the Tax Period. For a calendar-year company, the 2026 return is due by 30 September 2027. Details are in `ae-corporate-tax`.
- **Employer's VAT:** input tax on staff benefits is claimed, or not, in the VAT return for the period in which it is incurred. Apply the amended Article 53 texts to periods from 1 October 2026. Details are in `uae-vat`.

### Returns being filed now: calendar year 2025 ([Ministerial Decision No. 115 of 2023](https://mof.gov.ae/wp-content/uploads/2023/05/Ministerial-Decision-No.115-of-2023-on-Private-Pension-Funds-and-Private-Social-Security-Funds-for-Corporate-Tax-Purposes.pdf); [Cabinet Decision No. 49 of 2023](https://tax.gov.ae/DataFolder/Files/Legislation/05-06-2023/3/Cabinet%20Decision%20No.%2049%20of%202023%20-%20for%20publishing.pdf))

A calendar-year company is preparing its 2025 Corporate Tax return, due by 30 September 2026. The payroll rules above were the same in 2025: Wage outside Corporate Tax, employee costs deductible if not excessive, private pension contributions deductible when paid up to the 15% cap. The VAT change of 1 October 2026 does not affect 2025 VAT periods; for those, the earlier texts of exceptions (1) and (2) apply.

## Completion checklist ([Cabinet Decision No. 49 of 2023](https://tax.gov.ae/DataFolder/Files/Legislation/05-06-2023/3/Cabinet%20Decision%20No.%2049%20of%202023%20-%20for%20publishing.pdf); [Ministerial Decision No. 115 of 2023](https://mof.gov.ae/wp-content/uploads/2023/05/Ministerial-Decision-No.115-of-2023-on-Private-Pension-Funds-and-Private-Social-Security-Funds-for-Corporate-Tax-Purposes.pdf))

- [ ] Every worker classified as employee or self-employed, with the contract on file.
- [ ] No tax deducted from any Wage.
- [ ] Nationality recorded for every employee; UAE and GCC nationals set up with GPSSA (or, for UAE nationals employed in Abu Dhabi, the Abu Dhabi Pension Fund), with rates, cap and deadline confirmed from that fund for 2026.
- [ ] Gratuity accrued monthly for expatriate staff, with the basis confirmed with MOHRE or the free zone.
- [ ] Wage Protection System and unemployment insurance obligations confirmed with MOHRE.
- [ ] Related-party salaries checked against Market Value.
- [ ] Private pension contributions: paid in the period and within 15% of each member's deductible remuneration; any excess added back.
- [ ] VAT input tax on staff benefits reviewed against Article 53, using the texts in force from 1 October 2026 for later costs; claims on accommodation that carries VAT (hotel, hotel or serviced apartment) held until the FTA's conditions are checked; exempt residential leases carry no input tax to claim.
- [ ] Health insurance recovery limited to the employee, one spouse and up to three children under 18.
- [ ] Contractors near the AED 1,000,000 turnover line told to check their own Corporate Tax position.

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## Today's figures and who stands behind this skill

This file is an AI skill (tax rules your AI follows) from OpenAccountants, copied on 2026-10-16. Rates, thresholds and deadlines change. For the current version of this skill, its official sources and the named accountant (if any) who stands behind it, call `get_skill` with slug `ae-payroll-social` on the OpenAccountants connector (https://www.openaccountants.com/connect), or read https://www.openaccountants.com/skills/ae-payroll-social. If neither is available, confirm every figure against the official source pages cited above before relying on it.