Salary certificate basics in the UAE

While processing payroll, salary certificate requests are quite common in the UAE. Here is everything you must know about processing salary certificates and payslips.

Salary Certificate is a document that is issued by the employer to the employee as a proof of employment and salary entitlement of the concerned employee. It is one of the most important documents for the employee as it acts as proof of income when needed for loans, immigration etc.

In the UAE, a salary certificate is mandatory when applying for loan or credit card. Most banks and financial institutions follow their own format of a salary certificate; however, the basic information remains the same. It is usually printed on the company’s letterhead with the seal and signature of the authorized personnel on it. “In the UAE, the salary certificate must be attested by the Ministry of Foreign Affairs and the Consulate General of the employee’s national country.”

Salary certificates are not addressed to any particular organization or individual and can be used for multiple purposes.

While the format of a salary certificate varies from bank to bank, the most commonly required information is mentioned below:

  • Date of issue
  • Name of the employee
  • Gender
  • Position held in the organization
  • Job profile
  • Joining date
  • Salary – gross and net salaries
  • Allowances – Housing and rent allowance, transportation, utilities etc.
  • Benefits
  • Name and contact details of the HR professional responsible for signing it

HR professionals often confuse Salary Certificates with a Salary Certificate Letter and Payslips.

A salary certificate letter has an added section addressing a bank or financial institution. This letter can only be used for the specified reason and the institution defined at the time of applying for the letter. If an employee wishes to apply for a loan with a certain bank, a salary certificate letter will be issued to that bank for the purpose of the loan.

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This salary certificate letter cannot be used to apply for any other loan at a different institution.

While the format for a salary certificate letter is close to the format of a salary certificate, it is essential to understand the specific requirement as per the bank and draft the letter accordingly.

Finally, all your employees are entitled to an individual and detailed payslip. The written payslip does not necessarily need to be on paper as it can be sent to the employees through email or accessed by them through your company’s HR solution. The payslips usually provide a break-up of the amount earned which includes the net pay of the employee (gross pay minus deductions, if any).

The format of the payslips remain standard throughout and is similar to salary certificates. It is important to note that the payslips are generated on a monthly basis. Some banks and financial institutions provide the alternative of submitting a copy of payslip in lieu of the salary certificate.

The information required in a payslip is as follows:

  • Date of issue
  • Name of the employee
  • Name of the employer
  • Basic pay
  • Allowances
  • Deductions, if any
  • Salary advance, if any
  • Net pay

The employee is entitled to request for these documents in order to process requests like sponsoring their family or applying for loans. In the UAE, the salary certificate must be attested by the Ministry of Foreign Affairs and the Consulate General of the employee’s national country.

Hence, salary certificates are commonly requested by employees and having a format in place will make it easier for you process the certificates each time they are requested.