A UAE manpower, cleaning or facility company must register for Corporate Tax, keep its books for 7 years and file 9 months after year end (30 September 2026 for December 2025 year ends). Because wages are most of the cost, the books need a WPS payroll reconciliation, a monthly gratuity accrual, visa costs spread over their benefit period and a margin per contract. Records not kept can cost AED 10,000.
- You supply cleaners, security guards, technicians or general labour to clients in the UAE
- Wages, visas, medical insurance and accommodation are most of your costs
- Clients pay monthly invoices on 60, 90 or more days
- You run several contracts and want to know which ones lose money
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Which tax and accounting obligations apply to manpower and cleaning companies?
A manpower, cleaning or facility management company licensed in the UAE registers for Corporate Tax regardless of turnover, and most pass the AED 375,000 VAT threshold within their first contracts. The table shows what to test as of September 2026.
| Obligation | Trigger | Practical effect for a labour-heavy business |
|---|---|---|
| Corporate Tax registration | Every UAE company | Register even while the first contract is being mobilised |
| Corporate Tax at 9% | Taxable income above AED 375,000 | Gratuity and visa entries change taxable profit |
| Small Business Relief | Revenue up to AED 3M, periods ending by 31 Dec 2029 | Rarely available once several contracts run, but still register and file |
| Individual owner trading without a company | Business turnover above AED 1M in a calendar year | Register for Corporate Tax by 31 March of the next year |
| VAT registration | Taxable supplies above AED 375,000 (voluntary from AED 187,500) | Labour and cleaning services are charged VAT at 5% |
| Audited statements for Corporate Tax | Revenue above AED 50M or a Qualifying Free Zone Person | Large facility groups need an annual audit |
| E-invoicing | Under AED 50M: service provider by 31 Mar 2027 | Monthly client invoices will flow through the new system |
Edge cases: a free zone manpower company placing staff with mainland clients (income from mainland customers is generally non-qualifying for the free zone 0% rate), a company that pays workers partly outside WPS, and a group where the visa-holding company and the invoicing company are different licences. The Corporate Tax guide for manpower and recruitment agencies covers the return itself.
How should a labour-intensive business reconcile WPS payroll and accrue gratuity?
Reconcile three numbers every month: the payroll register, the WPS salary file sent through your bank or exchange house, and the salary expense in the ledger. Then accrue gratuity and leave so the balance sheet shows what you already owe every worker.
WPS payroll reconciliation
Since 1 June 2026, under Ministerial Resolution 340 of 2026, wages are due through WPS by the 1st of the following month, and a company counts as compliant only when at least 85% of its workers are paid on time. Paying late or outside WPS costs AED 1,000 per worker, capped at AED 20,000, so treat the WPS file as a control, not just a payment. Our payroll accounting guide shows the journal entries.
| Check | Compare | What a difference usually means |
|---|---|---|
| Headcount | Payroll register vs WPS file vs visa list | Absconded, cancelled or new workers not updated |
| Gross pay | Payroll register vs ledger salary expense | Overtime or deductions posted late |
| Net paid | WPS file vs bank debit | Returned salaries or failed cards |
| Overtime | Timesheets vs client billing | Hours paid to workers but never billed |
| Deductions | Advances and fines vs employee loan ledger | Recoveries not matched to advances |
Gratuity and leave provisions
Gratuity for limited-term contracts builds at 21 days of basic wage for each of the first 5 years and 30 days for each later year, capped at 2 years’ total wage. Accrue it every month for every worker, add unused annual leave, and release the provision when final settlements are paid. See our gratuity calculation guide for the formula by service length.
How do you spread visa costs and measure profit per contract?
Visa, Emirates ID, medical test and insurance costs for a worker benefit the company for the period they cover, so record them as a prepayment and release them monthly rather than expensing them the day you pay. Then charge each worker’s monthly cost to the contract he or she works on.
Visa and insurance cost amortisation
Set up a prepaid employment costs account with a line per worker and a release period matching the visa or policy term. When a worker leaves early, write off the unreleased balance in that month. Recharges to clients go to income or a recoverable balance, depending on the contract. Our accruals and prepayments guide covers the mechanics.
Contract-level margin
Give every client contract a cost centre and charge it with direct wages, overtime, transport, materials, accommodation and the monthly share of visas and gratuity. The illustrative office tower contract below looks healthy on wages alone but earns a thin margin once every cost is loaded.
| Monthly line for one cleaning contract | AED |
|---|---|
| Invoice to client (excluding VAT) | 85,000 |
| Direct wages and overtime | 58,000 |
| Cleaning materials and equipment | 6,000 |
| Transport and accommodation share | 4,000 |
| Visa and insurance release | 5,500 |
| Gratuity and leave accrual | 3,200 |
| Contract margin | 8,300 |
Receivables from slow-paying clients
Facility clients often pay on long terms while your payroll leaves every month. Age receivables by client and contract, chase anything past terms, and document disputes. Output VAT on an invoice generally belongs in the return for the period you issued it, even if the client has not paid, so slow payers cost you cash twice. Our receivables guide sets out a collection routine.
What is the monthly close for a cleaning or manpower company?
The close runs from timesheets to contract margins within 10 working days, and the same figures build the quarterly VAT 201 and the annual Corporate Tax return.
Lock timesheets and bill every contract
Agree hours, overtime and absences with site supervisors, then raise client tax invoices within 14 days of the service with VAT at 5%.
Reconcile payroll to the WPS file
Match headcount, gross pay and net transfers between the payroll register, the WPS file and the bank, and investigate every mismatch.
Post gratuity, leave and visa releases
Update the gratuity and leave provisions for joiners and leavers, and release the month’s share of prepaid visa and insurance costs.
Allocate costs to contracts
Charge wages, materials, transport, accommodation and releases to each contract cost centre.
Reconcile bank and age receivables
Match client receipts to invoices, chase overdue balances and record agreed credit notes.
Review VAT
Tie output VAT to invoices issued and input VAT to supplier invoices for materials, vehicles and accommodation. At quarter end these totals go into the VAT 201 on EmaraTax.
Report contract margins
Rank contracts by margin after all loaded costs. At year end the provisions and prepayments carry straight into the financial statements behind the Corporate Tax return.
What records must a manpower or facility company keep?
Keep the evidence behind every wage, visa and invoice for at least 7 years for Corporate Tax, and be able to produce Arabic translations if the FTA requests them.
- Signed client contracts, rate cards and variation letters
- Approved timesheets and site attendance records
- Client tax invoices and credit notes
- Payroll registers and WPS salary files with bank confirmations
- Employment contracts, offer letters and final settlement statements
- Gratuity and leave provision schedules by worker
- Visa, Emirates ID, medical and insurance invoices with the prepaid schedule
- Accommodation leases and transport contracts
- Supplier invoices for materials and equipment
- VAT 201 returns, Corporate Tax return and working papers
Which payroll and tax deadlines should a manpower company diarise?
The payroll deadline comes every month and the tax deadlines every quarter and year; for a December year end the next Corporate Tax return is due on 30 September 2026.
Need the return handled as well? Have your Corporate Tax return prepared and reviewed by the same team that keeps the books.
| When | What | Who |
|---|---|---|
| By the 1st of each month | Previous month’s wages paid through WPS | Every mainland employer under MoHRE |
| Within 10 working days of month end | Payroll reconciliation, provisions and contract margins | Internal target |
| 30 September 2026 | Corporate Tax return and payment for the year ended 31 December 2025 | Companies with December year ends |
| 28 October 2026 | VAT 201 for a quarter ending 30 September 2026 | VAT-registered companies on that quarter |
| 31 March 2027 | Appoint an e-invoicing Accredited Service Provider | Businesses under AED 50M revenue |
| 1 July 2027 | E-invoicing go-live | Businesses under AED 50M revenue |
What penalties hit a manpower company with weak books?
Missing records cost AED 10,000 under Corporate Tax for a first violation and AED 20,000 for a repeat, and the returns that cannot be filed on time bring separate penalties. The table lists the tax penalties in force in September 2026.
| Breach | Amount | Legal basis |
|---|---|---|
| Corporate Tax records not maintained | AED 10,000, repeat AED 20,000 | Cabinet Decision 75/2023 as amended |
| VAT records not maintained | AED 10,000 for a first violation | Cabinet Decision 129/2025 |
| Arabic translation not provided when asked | AED 5,000 | Cabinet Decision 129/2025 |
| Client tax invoice or credit note not issued | AED 2,500 per case | Cabinet Decision 129/2025 |
| Late VAT 201 | AED 1,000, repeat within 24 months AED 2,000 | Cabinet Decision 129/2025 |
| Incorrect VAT 201 | AED 500, repeat AED 2,000 | Cabinet Decision 129/2025 |
| Late Corporate Tax return | AED 500 a month for 12 months, then AED 1,000 a month | Cabinet Decision 75/2023 as amended |
| Late payment of VAT or Corporate Tax | 14% a year, calculated monthly | Cabinet Decisions 129/2025 and 75/2023 |
How it stacks: a cleaning company whose payroll was never reconciled files its 2025 Corporate Tax return 5 months late with AED 26,010 of tax outstanding. Late filing adds AED 2,500 (AED 500 x 5) and late payment adds about AED 1,517 (AED 26,010 x 14% / 12 x 5), before any AED 10,000 for missing records.
Gratuity and visa costs missing from your books?
We check your payroll reconciliation, provisions and contract costs before the Corporate Tax return on 30 September 2026.
7 accounting mistakes cleaning and manpower companies make
Each mistake below either misstates profit, breaks the payroll trail or delays a return.
- Gratuity never accrued. Profit is overstated every year until a wave of final settlements hits, and the financial statements behind the Corporate Tax return are wrong.
- Visa costs expensed at once. A hiring month shows a large loss and later months look better than they are, so contract pricing decisions are made on bad numbers.
- Payroll posted from the bank, not the register. Deductions, advances and unpaid wages disappear from the ledger.
- Overtime paid but not billed. The margin leak never shows because costs are not tracked by contract.
- Invoices raised late to match client payment cycles. A tax invoice is due within 14 days of supply, and not issuing one costs AED 2,500 per case.
- Cash wages outside WPS. The payment is hard to evidence as a business expense and breaks WPS compliance.
- Owner’s personal account used for client receipts. The company’s revenue can no longer be proved from its own records.
What routine prevents payroll and tax penalties in a labour-heavy business?
Tie the payroll calendar and the tax calendar into one monthly routine. The UAE bookkeeping guide explains the underlying record standards.
- Run all wages and client receipts through the company’s own business bank account
- Monthly: pay wages through WPS by the 1st and reconcile the file to the ledger
- Monthly: bank reconciliation and client receivables ageing
- Monthly: close within 10 working days with gratuity, leave and visa releases posted
- Monthly: contract margin report with every loaded cost
- Quarterly: accountant review of VAT on client invoices before filing
- Annually: agree gratuity provision to contracts and service dates for every worker
- Always: keep records 7 years and be ready to translate them into Arabic
Payroll books in a mess or an FTA notice on the desk?
Rebuild the ledger from bank statements, WPS files, client invoices and visa receipts, set the opening gratuity provision from each worker’s start date, and then file the overdue VAT and Corporate Tax returns. Our catch-up bookkeeping guide explains the order, and the missed Corporate Tax deadline guide covers the first week after a missed return.
- Fix under-declared VAT on past client invoices with a voluntary disclosure (1% a month before an audit notice)
- Expect 15% plus 1% a month if the disclosure comes after an audit notice
- File a reconsideration request within 40 business days if a penalty decision looks wrong
- Take an unresolved decision to the Tax Disputes Resolution Committee
The reconsideration request guide lists what evidence to attach. Outcomes are the FTA’s decision, but reconciled payroll and invoice records give a request substance.
FTA notice or late return for your manpower company?
Send it to us and we will tell you what to file first and what records to rebuild.
Worked example: a cleaning company that never booked gratuity
Take an illustrative Dubai cleaning company with 2025 revenue of AED 7,200,000, 120 cleaners on a basic wage of AED 1,500 a month and 12 months of unreconciled books. Using a 30-day month, one year’s gratuity per cleaner is AED 1,050 (AED 1,500 / 30 x 21). It also paid AED 180,000 on 1 January 2025 for 30 new hires’ visas and insurance, assumed here to cover 2 years.
| Line | Books as kept | Corrected books |
|---|---|---|
| Profit before adjustments | AED 700,000 | AED 700,000 |
| Gratuity accrual (120 x AED 1,050) | Not booked | Minus AED 126,000 |
| Visa and insurance cost deferred to 2026 | Not deferred | Plus AED 90,000 |
| Profit | AED 700,000 | AED 664,000 |
| Corporate Tax: 9% above AED 375,000 | AED 29,250 | AED 26,010 |
| Exposure: Corporate Tax records not kept | AED 10,000 | Avoided |
| Exposure: return filed 5 months late | AED 2,500 | Avoided |
A catch-up of 12 months of payroll, WPS and visa records is a one-off project sized by headcount. Kept monthly, Paci’s bookkeeping starts from AED 599 a month (AED 7,188 a year), and the quote for a payroll-heavy company is fixed after a review rather than billed by the hour.
In-house accountant, freelancer or firm for a manpower company?
An in-house accountant suits companies with several hundred workers, a freelancer can handle one or two contracts, and a firm suits growing contractors that need payroll, provisions and VAT handled together with review.
| Option | Cost | Your time | Risk | Suits |
|---|---|---|---|---|
| Owner or HR officer keeps the books | Staff time | High at every payroll run | Gratuity and visa entries skipped | Very small crews with one client |
| Freelance accountant | Typical market range: varies with headcount | Medium | Payroll and tax deadlines depend on one person | Two or three stable contracts |
| Accounting firm (Paci) | From AED 599 a month, fixed quote within 24 hours | Low | Qualified accountant reviews each quarter | Growing cleaning, security and manpower companies |
Read what to check before outsourcing bookkeeping and the most common bookkeeping errors, then see our accounting and bookkeeping service.
What manpower and cleaning company owners ask us
When comparing company setup quotes, which accounting and tax costs belong in a 24-month budget?
Include Corporate Tax registration and one return per year, VAT registration and quarterly returns once taxable supplies pass AED 375,000, monthly bookkeeping and payroll, and an e-invoicing Accredited Service Provider by 31 March 2027 for businesses under AED 50M. Skipping registration costs AED 10,000 for Corporate Tax, waived if the first return is filed within 7 months of the first period end.
We only have a handful of transactions a month. What should an accountant's fee include?
The Corporate Tax registration and annual return, VAT returns by the 28th after each quarter if registered, payroll postings and gratuity accruals, and records kept for 7 years. If the company pays the owner or relatives, the arm’s length review and the transfer pricing disclosure with the Corporate Tax return should be in scope too. See bookkeeping prices in the UAE.
My first cleaning contract is in my own name but I am opening a free zone company. Can the company's income go through my personal account?
Avoid it. Mixing personal and company money makes the company’s revenue and costs hard to prove, and records not kept cost AED 10,000 under Corporate Tax. Move the contract to the company and pay yourself from the company at an arm’s length rate that is disclosed with the return.
Can we charge clients for visa costs, and how do we record the recharge?
If your contract allows it, invoice the recharge with VAT treatment agreed by your accountant and record it against the prepaid visa balance or as income, consistently. Our VAT guide for manpower agencies covers visa recharges and disbursements.
Is a gratuity provision really needed if workers rarely stay 5 years?
Yes. Gratuity starts once a worker completes a year of continuous service, so short tenures still create a liability. Accruing monthly spreads the cost across the contracts that used the worker.
Frequently asked questions
How is accounting for a manpower company different from other businesses?+
Wages are most of the cost, so the ledger must reconcile to the WPS file every month, carry gratuity and leave provisions for every worker, spread visa and insurance costs, and allocate all of it to client contracts. Most other service businesses can close without that level of payroll detail.
Do cleaning companies in Dubai charge VAT?+
A VAT-registered cleaning company charges 5% on its services, including services performed in designated zones, because services there are always taxable. Registration is mandatory above AED 375,000 of taxable supplies. Our VAT guide for cleaning and facility management companies covers contract billing.
Is gratuity a cost for Corporate Tax purposes?+
Gratuity accrued under accounting standards is an expense in the financial statements that Corporate Tax starts from, so the accrual reduces reported profit. Your accountant confirms any tax adjustments when preparing the return; the key is that the provision is calculated per worker and documented.
How do facility management companies track profitability?+
Give each contract a cost centre, charge it with wages, overtime, materials, transport, accommodation, visa releases and gratuity, and compare the total to monthly billing. Review the ranking every month so loss-making sites are repriced or exited.
Do manpower companies need audited accounts in the UAE?+
Corporate Tax requires audited statements for revenue above AED 50 million or a Qualifying Free Zone Person under Ministerial Decision No. 84 of 2025. Your licensing authority, bank or clients may ask for audited statements below that level, so confirm their rules.
How does a cleaning company file Corporate Tax?+
Prepare year end financial statements with provisions and prepayments, adjust for tax, and file the return on EmaraTax within 9 months of year end. The Corporate Tax guide for cleaning companies walks through the filing, and our industry bookkeeping guides cover related sectors.
Get your manpower company's books reviewed for free
In a free 15-minute review a qualified accountant checks one month of your WPS reconciliation, gratuity accrual and contract costs and lists what an FTA review would flag. You get a fixed quote within 24 hours, with bookkeeping from AED 599 a month.
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- u.ae: Payment of wages
- FTA: Registration for VAT
- FTA: Waiver of penalties
- Ministry of Finance: Ministerial Decision No. 84 of 2025 on Audited Financial Statements
Checked against these sources on 15 September 2026. This guide is general information for UAE businesses, not advice on your specific facts.