Salary Advance Agreement
An agreement for a salary advance or an interest-free loan repaid by monthly deductions from the wage, with the employee’s written consent and the limit of Article 25 checked, as PDF or DOCX.
This tool writes the agreement for a salary advance or a loan from the employer that the employee repays by deductions from the wage. It states the amount, the number and amount of the monthly instalments, the first and last deduction month, that no interest is charged, the employee’s written consent to the deductions, and what happens to any balance when the employment ends.
What the law requires
Federal Decree-Law No. 33 of 2021, Article 25(1)(a) allows a deduction from the wage for “the redemption of loans granted to the worker, within the maximum limit of the monthly deduction percentage from the worker’s wage stipulated in this Article, after obtaining the worker’s written consent and without any interest”. Article 25(2): where there are several reasons for deduction, the total “may not exceed (%50) fifty percent of the wage”.
The page reads the limit with the same rules as the deductions check. It divides the amount into equal instalments, puts any remainder in the last one, and will not generate an agreement whose instalment, with any other monthly deductions you enter, is more than 50% of the wage.
When the employment ends
Article 51(7) allows the employer to deduct from the end-of-service benefit amounts payable under the law, under the conditions of Cabinet Resolution No. 1 of 2022; its Article 29(1)(a) names amounts owed by the worker to recover loans. The agreement says that an outstanding balance may be deducted from the end-of-service entitlements and that anything still owed after that is settled in accordance with the Decree-Law.
Frequently Asked Questions
Can an employer charge interest on a loan to an employee in the UAE?
Not when it is repaid by deduction from the wage: Article 25(1)(a) of Federal Decree-Law No. 33 of 2021 allows the deduction only with the worker’s written consent and without any interest.
How much of the salary can be deducted to repay an advance?
All deductions together may not exceed 50% of the wage (Article 25(2)). The page refuses an instalment above that limit.
Is the information I enter stored?
No. Generating sends your entries to our document service, which returns the finished file and stores none of it. The full field-level data flow is published in the Privacy Notice.