Few things cause more worry than opening a payslip and finding the number is lower than the contract says. Sometimes the cause is an honest correction. Sometimes it is a deduction the employer had no right to make. Article 25 of the UAE Labour Law (Federal Decree-Law No. 33 of 2021) answers this question directly: a deduction is allowed only in the cases the law lists, and even then it has a ceiling. This guide explains those cases in plain language so you can read your own payslip with confidence.
- An employer may deduct from your wage only in the cases listed in Article 25. A deduction outside that list is not allowed.
- Recovering an overpayment is capped at 20% of the wage. Fines under the approved penalty rules are capped at 5%. Court-ordered debts are generally capped at one quarter, with an exception for alimony.
- When several deductions apply in the same month, the total cannot exceed 50% of the wage.
- Loan recovery needs your written consent and no interest may be charged.
- Press reports on the law say hiring costs cannot be deducted from a worker’s pay, directly or indirectly.
The cases where a deduction is allowed
The table below summarises how Gulf News, Khaleej Times and law-firm commentary describe Article 25. It is a summary, so read it alongside your own contract and payslip.
| Reason for deduction | Limit | Condition |
|---|---|---|
| Repaying a loan or advance from the employer | Inside the overall 50% cap | Your written consent, and no interest |
| Recovering money paid to you by mistake | Up to 20% of the wage | The overpayment should be documented |
| Penalty for a violation of workplace rules | Up to 5% of the wage | Only under a penalty list approved by the Ministry |
| A debt ordered by a court | Up to 25% of the wage | Court order. Alimony can exceed one quarter |
| Damage caused by the worker’s own error | Reported as five days’ wage a month unless a court approves more | Listed in Khaleej Times’ summary of the eight permitted cases. Must be established, not just claimed |
| Several deductions in one month | Never above 50% in total | Applies whatever the reasons are |
Savings schemes, insurance contributions and similar items you agreed to join are also mentioned in some summaries. The key point is that a deduction should match a recognised category. “Company policy” on its own is not a category.
A worked example
Take a worker paid AED 3,000 a month. The maximum for each category would be:
| Category | Maximum from AED 3,000 |
|---|---|
| Overpayment recovery (20%) | AED 600 |
| Penalty under approved rules (5%) | AED 150 |
| Court-ordered debt (25%) | AED 750 |
| Overall ceiling for all deductions together (50%) | AED 1,500 |
Even if an employer could justify all three items above, the total taken in that month could not pass AED 1,500. If your payslip shows more, ask for a written breakdown.
Deductions that should make you ask questions
- Visa, recruitment or hiring costs. Khaleej Times reports that the law prohibits deducting these from a worker, directly or indirectly. If a “visa instalment” appears on your payslip, ask HR for the legal basis in writing.
- Medical insurance for your own cover. Gulf News reports that employers must fund mandatory health insurance for employees, so a line for your own basic policy deserves an explanation. Our guide to UAE health insurance for employees shows how the rules differ by emirate.
- “Temporary” cuts with no paperwork. A law-firm briefing from Addleshaw Goddard warns that undocumented temporary deductions and reducing allowances without consent can count as unlawful wage withholding, even in difficult times for the business.
- Deductions to cover business losses. The same briefing lists this as a common risk area. Business losses are the company’s cost, not a ground for taking pay from staff.
- Any pay reduction you did not agree to. A reduction in salary or change in terms generally needs your written consent.
What a proper deduction looks like
WageIndicator’s summary of the law notes that payslips should show the gross wage, any variable amounts, each deduction and the reason for it. A lawful deduction therefore leaves a clear trail. You should be able to point to a line on the payslip, a reason and a legal category. If the amount also reaches you through the Wage Protection System, the figure in your bank should match the payslip. Our guide to UAE salary payment rules explains how WPS records work.
What to do if you think a deduction is wrong
- Compare three documents: your contract, the payslip and your bank statement.
- Ask HR in writing what the deduction is for and which legal provision allows it. Keep the reply.
- Calculate the percentage. Divide the deducted amount by your wage. A deduction above its category limit, or a total above 50%, is a strong point.
- Do not sign any document that waives your pay unless you understand it fully.
- Escalate to MOHRE if the issue is not corrected. Attach your evidence. Our report on how MOHRE handles salary problems explains what regulators expect to see.
Deductions also affect other entitlements, such as your end-of-service gratuity and overtime pay. Check those figures at the same time as your payslip.
Frequently asked questions
What is the maximum salary deduction allowed in the UAE?
When several deductions apply in a month, the total cannot exceed 50% of the wage. Each category also has its own limit, such as 20% for recovering an overpayment and 5% for penalties.
Can my employer deduct my visa cost from my salary?
Press reports on the Labour Law say the employer cannot deduct hiring costs from a worker directly or indirectly. Ask for the legal basis in writing if you see such a deduction.
Can my employer cut my salary without my agreement?
A reduction in salary or a change to your terms generally needs your written consent. Unrecorded temporary cuts are a recognised legal risk for employers.
Can a company deduct money for damage I caused?
Summaries of the law list damage caused by the worker’s error as a possible case, with a monthly cap, but it must be established and not just asserted. Ask to see how the amount was calculated.
Do I have to agree before the employer deducts a loan repayment?
Yes. Loan recovery needs your written consent and no interest may be charged.
Where do I complain about an illegal deduction?
Start with HR in writing, then file a complaint with MOHRE if the matter is not resolved, attaching your contract, payslips and bank statements.
Sources
- Gulf News: New UAE Labour Law, when can my employer deduct my salary?
- Khaleej Times: UAE labour law, 8 instances where an employee’s salary can be deducted
- Addleshaw Goddard: Lawful salary deductions and reductions under UAE Labour Law (2026)
- WageIndicator: Minimum wage regulations, United Arab Emirates
Last reviewed: 21 October 2026. This is a summary of press and law-firm commentary on Article 25, not legal advice. Check the current text of the law and your own contract, or ask MOHRE, before acting on a specific deduction.