Payroll & HR Finance Glossary

Payroll

Payroll refers to the process of calculating and distributing employee salaries, wages, bonuses, and deductions. It includes tracking working hours, calculating taxes, ensuring statutory compliance, and maintaining accurate employee compensation records in accordance with UAE labor laws.

HR Finance

HR Finance combines human resource management with financial planning. It focuses on budgeting employee costs, managing payroll expenses, employee benefits, compensation planning, and ensuring compliance with employment and financial regulations within the organization.

Payroll Outsourcing

Payroll outsourcing is the practice of delegating payroll processing to a third-party service provider. It helps businesses reduce administrative burden, ensure compliance with UAE labor and tax regulations, improve accuracy, and focus on core business operations.

HR Outsourcing

HR outsourcing involves transferring HR functions such as payroll, recruitment, employee administration, and compliance to an external service provider. This approach improves efficiency, reduces costs, and ensures expert handling of HR operations in the UAE market.

Salary Processing

Salary processing is the calculation and payment of employee wages after considering allowances, overtime, deductions, and statutory contributions. Accurate salary processing ensures employees are paid on time while maintaining compliance with UAE labor laws.

Wage Protection System (WPS)

WPS is a UAE government-mandated system that ensures employees receive their salaries on time and in full. Employers must submit salary files through approved banks or exchange houses to maintain compliance and avoid penalties.

Basic Salary

Basic salary is the fixed portion of an employee’s compensation, excluding allowances and bonuses. In the UAE, basic salary is crucial as it is used to calculate gratuity, leave salary, and other statutory employee benefits.

Allowances

Allowances are additional payments made to employees beyond basic salary. Common UAE allowances include housing, transportation, medical, and education allowances, which are structured to attract talent and comply with employment contracts.

Overtime Pay

Overtime pay refers to compensation paid for work performed beyond standard working hours. UAE labor law regulates overtime rates, typically calculated as a percentage of the employee’s basic hourly wage.

End-of-Service Gratuity

End-of-service gratuity is a statutory benefit paid to employees upon termination or resignation after completing one year of service. It is calculated based on basic salary and length of service under UAE labor law.

Leave Salary

Leave salary is the compensation paid to employees during annual, sick, or other approved leave periods. It usually includes basic salary and applicable allowances as per employment contract and UAE labor regulations.

Payroll Compliance

Payroll compliance ensures all payroll activities adhere to UAE labor laws, WPS regulations, and company policies. It minimizes legal risks, penalties, and disputes related to employee compensation.

HR Compliance

HR compliance involves aligning HR policies, procedures, and practices with UAE labor laws, employment regulations, and government mandates to ensure lawful and ethical workforce management.

Employee Benefits

Employee benefits include non-wage compensation such as health insurance, leave entitlements, bonuses, and gratuity. These benefits improve employee satisfaction and help organizations remain competitive in the UAE job market.

Payroll Register

A payroll register is a detailed record of employee earnings, deductions, and net pay for each pay period. It serves as a critical document for audits, reporting, and financial reconciliation.

Payslip

A payslip is a document issued to employees detailing salary components, deductions, and net pay. In the UAE, payslips support transparency and compliance with WPS and labor regulations.

Statutory Deductions

Statutory deductions are mandatory deductions required by law. While the UAE has no income tax, deductions may include penalties, loan recoveries, or court-ordered deductions where applicable.

Payroll Software

Payroll software automates salary calculations, payslip generation, WPS reporting, and compliance management. Businesses in the UAE use payroll software to improve accuracy, efficiency, and data security.

Human Resource Information System (HRIS)

HRIS is a digital system that manages employee data, payroll, attendance, and benefits. It supports strategic HR decision-making and ensures accurate record-keeping.

Attendance Management

Attendance management tracks employee working hours, leave, absences, and overtime. Accurate attendance data is essential for payroll processing and compliance with labor regulations.

Time and Attendance System

This system records employee work hours using biometric or digital tools. It helps calculate accurate wages and reduces payroll errors.

Time and Attendance System

This system records employee work hours using biometric or digital tools. It helps calculate accurate wages and reduces payroll errors.

Payroll Audit

A payroll audit reviews payroll records to ensure accuracy, compliance, and financial integrity. It helps identify errors, fraud, or non-compliance issues.

HR Policies

HR policies define rules and guidelines for employee management, including payroll, leave, conduct, and benefits. Clear policies support consistency and compliance.

Employee Contract

An employee contract outlines terms of employment, salary, benefits, and responsibilities. In the UAE, contracts must comply with MOHRE regulations.

MOHRE

The Ministry of Human Resources and Emiratisation regulates labor laws in the UAE. It oversees employment contracts, WPS, and worker rights.

Payroll Calendar

A payroll calendar outlines salary payment dates, cut-off periods, and processing timelines. It ensures timely salary disbursement.

Net Salary

Net salary is the amount an employee receives after deductions. It reflects actual take-home pay.

Gross Salary

Gross salary is total earnings before deductions, including basic salary and allowances.

Salary Structure

Salary structure defines the breakdown of basic pay, allowances, and benefits.

Payroll Cost

Payroll cost includes total employee compensation expenses incurred by a business.

HR Administration

HR administration handles employee records, documentation, and compliance tasks.

Employee Lifecycle

Employee lifecycle covers recruitment, onboarding, employment, and exit processes.

Onboarding

Onboarding integrates new employees into the organization and payroll system.

Offboarding

Offboarding manages employee exit procedures, including final settlement and gratuity.

Final Settlement

Final settlement includes unpaid salary, leave, gratuity, and deductions at exit.

Payroll Reconciliation

Payroll reconciliation matches payroll records with accounting and bank statements.

Accounting Integration

Accounting integration links payroll data with financial accounting systems.

Cost-to-Company (CTC)

CTC represents total employment cost including salary and benefits.

Variable Pay

Variable pay includes bonuses and performance-based incentives.

Bonus

Bonus is additional compensation awarded for performance or milestones.

Commission

Commission is earnings based on sales or performance targets.

Employee Loans

Employee loans are advances deducted from future salaries.

Payroll Reports

Payroll reports summarize salary, deductions, and costs for management review.

Confidential Payroll

Confidential payroll ensures salary data security and restricted access.

Data Security

Data security protects employee payroll and HR information from breaches.

Compliance Reporting

Compliance reporting ensures timely submission of statutory payroll reports.

Outsourcing Partner

An outsourcing partner provides expert payroll and HR services externally.

Service Level Agreement (SLA)

SLA defines service standards, timelines, and responsibilities.

Payroll Accuracy

Payroll accuracy ensures correct salary calculations and payments.

Payroll Errors

Payroll errors include miscalculations, late payments, or incorrect deductions.

Employee Classification

Employee classification defines full-time, part-time, or contractual status.

Temporary Staffing

Temporary staffing involves hiring employees for short-term needs.

Contract Staffing

Contract staffing employs workers for fixed-duration projects.

HR Metrics

HR metrics measure workforce performance and costs.

Payroll KPIs

Payroll KPIs track efficiency, accuracy, and compliance.

Salary Benchmarking

Salary benchmarking compares pay structures with market standards.

Workforce Planning

Workforce planning aligns staffing needs with business goals.

Compensation Planning

Compensation planning designs competitive salary frameworks.

Payroll Scalability

Payroll scalability supports business growth and workforce expansion.

Multinational Payroll

Multinational payroll manages employees across multiple countries.

UAE Labor Law

UAE Labor Law governs employment practices and worker rights.

Employment Visa

Employment visa allows expatriates to legally work in the UAE.

Employee Records

Employee records store personal and employment data.

Payroll Confidentiality

Payroll confidentiality restricts access to salary information.

HR Documentation

HR documentation includes contracts, policies, and records.

Digital Payroll

Digital payroll uses automated systems for salary processing.

Cloud Payroll

Cloud payroll enables online access and data security.

Payroll Automation

Payroll automation reduces manual errors and processing time.

Internal Controls

Internal controls prevent payroll fraud and errors.

Payroll Fraud

Payroll fraud involves manipulation of payroll data.

Employee Self-Service

Employee self-service allows staff to access payroll details online.

Leave Management

Leave management tracks employee leave balances and approvals.

Sick Leave

Sick leave is paid or unpaid leave for illness.

Annual Leave

Annual leave is paid vacation entitlement.

Maternity Leave

Maternity leave supports female employees during childbirth.

Paternity Leave

Paternity leave provides leave for new fathers.

Public Holiday Pay

Public holiday pay compensates employees during UAE holidays.

Payroll Processing Cycle

Payroll processing cycle covers data collection to salary payment.

Payroll Cut-Off

Payroll cut-off defines the deadline for salary data submission.

Payroll Validation

Payroll validation verifies data accuracy before payment.

HR Cost Management

HR cost management controls workforce expenses.

Employee Engagement

Employee engagement reflects workforce satisfaction and motivation.

Retention Strategy

Retention strategy reduces employee turnover.

Workforce Analytics

Workforce analytics uses HR data for decision-making.

Salary Disbursement

Salary disbursement is the transfer of wages to employees.

Bank File Submission

Bank file submission enables salary payment through banks.

Exchange House

Exchange houses process WPS salary payments.

Payroll Documentation

Payroll documentation supports audits and compliance.

HR Risk Management

HR risk management mitigates legal and operational risks.

Business Process Outsourcing (BPO)

BPO delegates non-core functions like payroll externally.

Shared Services

Shared services centralize HR and payroll functions.

Compliance Penalties

Compliance penalties result from labor law violations.

Payroll Governance

Payroll governance ensures ethical payroll management.

Employee Cost Analysis

Employee cost analysis evaluates workforce expenses.

Financial Reporting

Financial reporting includes payroll-related expenses.

Payroll Budgeting

Payroll budgeting forecasts salary costs.

HR Strategy

HR strategy aligns people management with business goals.

Outsourcing Cost Savings

Outsourcing cost savings reduce operational expenses.

Outsourcing Cost Savings

Outsourcing cost savings reduce operational expenses.

Business Continuity

Business continuity ensures uninterrupted payroll operations.

Payroll Transformation

Payroll transformation modernizes payroll processes using technology.