THE REAL COST OF PAYROLL ERRORS FOR UAE COMPANIES:
Incorrect salary amounts
Example:
Salary AED 15,000 → Daily rate AED 500
5-day mistake = AED 2,500 owed.
Wrong EOS calculations:
Basic salary errors compound over years.
Companies often owe AED 2,000–AED 15,000 per employee.
Payroll errors become most expensive at resignation or termination.
Legal Exposure and Court Risk
MoHRE does not accept “it was a mistake.”
Payroll errors often lead to:
• Back payments
• Court cases
• Compensation revisions
• EOS recalculations
• Legal fees
• Mandatory contract corrections
If several employees complain, MoHRE may perform a full payroll inspection.
Visa Delays and Administrative Freeze
Payroll errors disrupt visa processing and
can freeze:
• New work permits
• Visa renewals
• Visa transfers
• Quota approvals
• Labour contract amendments
One payroll mistake can delay hiring, onboarding, and project timelines for weeks.
Key Takeaways
-
Payroll errors in the UAE are compliance violations, not simple mistakes — triggering fines, WPS blocks, and legal exposure.
-
Inaccurate payroll directly affects visas, contracts, banking, employee trust, and MoHRE scoring, creating operational instability.
-
The financial impact is significant: underpayments, EOS miscalculations, overtime errors, and WPS fines can cost thousands per employee.
-
Accurate, compliant payroll protects a company’s operations, reputation, and workforce, making structured payroll systems essential for business stability.
The financial impact, WPS violations, legal exposure, employee trust issues, and operational risks caused by payroll inaccuracies.
Payroll in the UAE is not just a financial process, it is a compliance obligation. Even small mistakes trigger immediate consequences: WPS violations, delays, fines, employee complaints, visa issues, and reputational damage. Payroll errors are treated as compliance breaches, not administrative mistakes.
This guide breaks down the real cost of payroll errors for UAE companies in 2025, and why accurate payroll is essential for business stability.
Why Payroll Accuracy Matters in the UAE:
The UAE links payroll directly to compliance systems like WPS, labour contracts, banks, and visa processes. Because of this integration, payroll errors immediately affect:
The Most Common Payroll Errors:
Most payroll issues fall into predictable categories:
-
Incorrect basic salary amounts:
Wrong basic salary leads to incorrect EOS, leave, overtime, and settlement calculations.
-
Incorrect leave balances:
Wrong annual leave creates major disputes at offboarding.
-
Wrong overtime calculations:
UAE overtime must follow 1.25x, 1.5x, or 2.5x rules.
-
Incorrect or illegal deductions:
Unauthorised deductions result in labour complaints.
-
Contract–payroll mismatches:
If MoHRE contract shows AED 9,000 but WPS shows AED 8,000, the file is rejected.
-
Manual payroll delays:
Spreadsheets cause late submissions, triggering WPS violations.
-
Unupdated salary changes:
Raises or reductions not updated with MoHRE cause immediate mismatches.
These errors seem minor, but their consequences are major.
A costly Mistake:
Below is a breakdown of fines and consequences related to payroll errors
How Thukhur Prevents These Costs:
Companies rely on Thukhur to ensure payroll stability.
Our system delivers:
• 100% WPS accuracy
• 48-hour payroll setup
• Zero underpayment violations
• Full contract-to-WPS alignment
• Overtime and leave accuracy
• EOS validation
• Compliance with UAE Labour Law
• No manual miscalculations
The result:
Payroll becomes predictable, compliant, and error-free.
Final Thoughts:
Payroll errors are one of the most expensive operational risks for UAE companies. They cost money, compliance, time, reputation, and talent.
With the right system, payroll becomes:
• Accurate
• Stable
• Predictable
• Fully compliant
• Zero-risk
If your organisation needs support with accurate payroll execution, error-free calculations, and full alignment with UAE labour requirements, Thukhur delivers the precision and control needed to prevent costly mistakes before they happen.
No miscalculations. No disputes. No violations. Just clean, reliable payroll every single month.
Have a question about WPS or payroll compliance?
Our team helps UAE companies build clean, accurate, and fully compliant HR systems.
• WPS validation
• Labour contract matching
• Visa renewals
• End-of-service accuracy
• Employee trust
• MoHRE compliance scoring
• Banking credibility
One incorrect cycle is enough to trigger MoHRE attention.
Published: August 2025
Last Updated: November 2025
Category: Compliance & Payroll
Author: Thukhur Compliance Team
Read Time: 5 min read
Underpayment
Example:
Employee salary: AED 10,000
Paid through WPS: AED 7,500
→ Violation, even if unintentional.
Fine: AED 5,000 per employee. Maximum: AED 50,000
-
Delayed salary >15 days: Triggers violation
-
Salary unpaid for 30 days: Labour restrictions
-
Salary unpaid for 60 days: MoHRE fines: AED 50,000–AED 100,000
Loss of Employee Trust
Payroll is the most sensitive touchpoint between company and employee.
Errors lead to:
• Higher turnover
• Lower morale
• Reduced productivity
• Quiet quitting
• Negative reputation
Once trust is broken, employees rarely recover confidence in the employer.
Banking Complications
If WPS files fail validation, banks may:
• Reject the file
• Delay salary release
• Flag the company for monitoring
Repeated payroll issues affect:
• Corporate credit score
• Loan approvals
• Banking relationship rating
Banks interpret payroll errors as signs of financial instability.
© 2025 Thukhur Solutions LLC — Part of the Thukhur Production Group
Yas Creative Hub Building 1 | Office V108 | Abu Dhabi UAE
info@thukhur-solutions.com