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UAE labour law reducing salary Dubai

uae labour law reducing salary

The new UAE Labour Law outlines regulations that employers must follow when it comes to salary reductions.

While hiring costs cannot be deducted from a worker’s salary, the law permits salary reductions in specific cases.

In this article, we will discuss the eight instances of UAE labour law reducing salary.

Office of Al Mulla. Whatsapp: Click here. Location: Dubai. Phone: 00971501961291.

UAE labour law reducing salary.

  • Loan Redemption. An employer may deduct an employee’s salary up to 50% of the monthly deduction percentage to redeem loans granted to the worker. The employer must obtain the worker’s written consent and cannot apply interest.
  • Overpayment Redemption. Employers can deduct amounts paid to the worker in addition to entitlements, provided that the amount deducted does not exceed 20% of the wage.
  • Contributions to Bonuses, Pensions, and Insurance. The amounts deducted for worker contributions to bonuses, retirement pensions, and insurance can be deducted from the worker’s salary.
  • Contributions to Savings Fund. The worker’s contributions to the establishment’s savings fund or loans approved by the Ministry of Human Resources and Emiratization can also be deducted from the worker’s salary.
  • Instalments for Social Projects. Employers can deduct instalments for social projects or other benefits and services approved by the ministry, but only if the worker agrees in writing to participate.
  • Penalty for Violations. Amounts deducted from the worker’s salary due to violations committed at the establishment and approved by the ministry cannot exceed 5% of the wage.
  • Court Verdict Debts. Debts due to a court verdict can be deducted from the worker’s salary, but cannot exceed a quarter of the wage, except for awarded alimony debt that can be more than a quarter of the salary. If the worker has multiple debts, the amounts will be distributed by category.
  • Damages Caused by the Worker. Amounts necessary to rectify the damage caused by the worker due to a mistake or violation of the employer’s instructions can be deducted from the salary, but the deducted amount cannot exceed the wage of five days per month without approval from the relevant court.

It is essential to note that the percentage of deduction cannot exceed 50% of the pay in all instances.

Employers must obtain written consent from the employee before making any deductions, and no amount may be deducted from the worker’s salary except in the eight cases mentioned above.

Minimum Salaries UAE.

The UAE does not have a federal minimum wage law, but some emirates have established their minimum wage laws. Employers must ensure compliance with the minimum wage laws in their respective emirates.

FAQs about uae labour law reducing salary.

No, according to UAE labour law, employers cannot deduct hiring costs from an employee's salary.

1- Loan redemption.
2- Overpayment redemption.
3- Contributions to bonuses.
4- Pensions and insurance.
5- Contributions to savings funds.
5- Instalments for social projects.
6- Penalties for violations.
7- Court verdict debts.
8- Damages caused by the worker.


Employers must follow the UAE labour law’s specific regulations regarding salary reductions to avoid legal consequences. Violations of the labour law can result in legal action taken against the employer.

If employees face any salary-related issues, they must seek advice from a labour lawyer. Al Mulla Labour Lawyer & Legal Consultant is the best for labour cases in the UAE.

Contact the office of Al Mulla via Whatsapp. Click here. Or visit us at our law firms: Dubai. You can also call us on phone: 00971501961291.

Get the Facts: UAE Labour Law Salary Breakdown Dubai, also, we recommend you read about Unlocking Your Rights: Basic Salary Labour Law Dubai.

Learn about the Salary increase clause in employment contract UAE Dubai labour law and about Salaried Employee Pay Deduction.

1 thought on “UAE labour law reducing salary Dubai”

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