UAE Labour Law: Can your employer deduct money from your salary? 7 situations where deductions are allowed

Dubai: If you are an employee working in the UAE’s private sector, can your employer legally deduct your salary for any reason? According to the UAE’s Labour Law – Federal Decree Law no. 33 of 2021, and its implementing regulations there are various instances where an establishment may legally deduct the salary of a worker, ranging from loans your company may have given you, to any damage you may have caused due to neglect. Here is all you need to know. 7 instances when your company can deduct your salary Article 25 of the UAE Labour Law states that “no amount may be deducted or withheld from the worker’s wage”, except in the following cases: Loan repayment: If a company has given an employee a loan, it may deduct amounts from the worker’s salary as a result, only after obtaining the worker’s written consent and without any interest. Recovering overpaid amounts: Article 25 (2) of the law states that a company may also deduct a worker’s salary to cover for any payment that may have been made to the employee in excess of his or her entitlement, provided that the amount deducted does not exceed 20% of the wage. Retirement contributions and employee insurance: Employees may have amounts deducted from their salary for contributions to retirement pensions, benefits, and insurances under UAE law . Savings Fund: Another reason a company may legally deduct a worker’s salary is for the worker’s contributions to any savings fund at the establishment or the loans payable to the Fund approved by the Ministry of Human Resources and Emiratisation (MOHRE), provided that the worker agrees in writing to participate in the project. Penalties resulting from the employee’s violations: Your salary may also be deducted due to violations you may commit, according to the regulation of penalties in force at your company and approved by the Ministry, provided that they shall not exceed five per cent of your wage. Court rulings on debts: Debts resulting from a court judgement, and not exceeding a quarter of your wage, except for alimony debt, in which case more than a quarter of the wage may be deducted. For any damage to company: Your salary may also be deducted to rectify any damage caused as a result of your mistake or violation of the employer’s instructions, which may have led to the destruction, demolition or loss of tools, machines, products or materials owned by the employer. The deductions may not exceed the wage of five days per month, unless a greater amount is approved by the competent court. Article 25 (2) of the law states that if there are multiple reasons for deduction of salary, the total deduction may not exceed 50 per cent of the worker’s wage.