Companies and individuals can’t just go around claiming employment. IN UAE, you need official proof and documentation to show you are employing someone or that you’re employed by a specific organization. A salary certificate is proof your employees need. But how do you get one in the UAE? Let’s find out!
What is a salary certificate in the UAE?
A salary certificate is an official document you, as the employer, give to your employees. They have a right to request one from the organization. It shows that person is an employee at your organization, defining their period of work and salary for that period.
It is important because many UAE institutions need some type of proof of employment and an employee’s financial capabilities. For example, they can show a bank or other such financial institution that they are able to repay a debt by presenting their salary certificate.
Salary certificates can also help with other UAE authorities. If an employee is coming to the country to work, then presenting the official salary certificate to the immigration authorities helps.
What must a salary certificate include?
In the UAE, a salary certificate is mandatory when applying for a 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. It must be attested by the Ministry of Foreign Affairs and the Consulate General of the employee’s national country.
While the format of a salary certificate varies from bank to bank, the most commonly required information is:
- 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
So while employers have a lot of different ways you can format the document, the basic information always stays the same.
What is the difference between a salary certificate, salary certificate letter, and payslip?
Any person may feel there’s little difference between a salary certificate, a salary certificate letter, and a payslip, but each has its own use.
The salary certification letter is addressed directly to the bank your employee wants to loan money from. Even if their loan application gets rejected, they can still use the same certificate letter with that specific bank. However, your employee can’t use that letter with another institution or a bank.
The format of a UAE salary certificate letter is very similar to the salary certificate. The letter needs to include information such as:
- Date of issue
- Manager details
- Name of the bank the letter is addressed to
- Address of the bank
- Reference detailing the transfer of salary
If your employee is using a salary certificate letter, he or she must check the format required by the relevant bank as they sometimes vary in their rules. For example, the format rules might be different when applying for a mortgage versus a credit card.
Now, payslips are provided to the employees by you, the organization. They are simply a record for employees to keep, showing their gross and net incomes with possible taxes and other deductions. They are not official documents approved by financial authorities and an employee can’t use them as proof of income when applying for a loan.
You no longer need to issue a physical, written payslip. It’s more common these days to issue payslips via an HR solution or email.
The format of the payslips is standard throughout and similar to salary certificates, but they are generated monthly.
The information required on a payslip is:
- Date of issue
- Name of the employee
- Name of the employer
- Basic pay
- Allowances
- Deductions, if any
- Salary advance, if any
- Net pay
As you can see the formats for all three are very similar. However, there are slight differences in use and it’s a good idea to understand the different jargon when dealing with salary documents. If your employee requests a salary certificate or payslip, it’s worth checking what the purpose of the document will be to ensure you issue them the right option.
Bayzat can help generate your salary certificates
Managing your employees’ data requests can be time-consuming. Bayzat’s Letter Request function can help HR managers deal with salary certificate requests in a timely fashion. The feature allows you to set up customer letter templates so you don’t waste time going back and forth with your employees. Bayzat’s template samples can help you draft a salary certificate in an instant and customize them according to your employee’s needs.
This is all part of the overall Bayzat world-class Payroll experience. Now you can maintain payroll records and access the information anytime and anywhere. Our flexible and secure cloud-based system is compliant with UAE regulations, so you can trust the system is working for you.
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