Jun 5, 2015 2 min read

Can you pay employees in non-local currencies in the Middle East?

Many multinational companies operating in the Middle East employ expatriate staff and expats often want to be paid either in a non-local currency or multiple currencies. Our clients are struggling with either finding ways to pay expats in the non-local currencies or actually processing the payroll in multiple currencies.

Here are the most common questions and challenges related to the foreign currency payrolls in the Middle East:

What countries allow processing payroll payments in non-local currencies?

  1. United Arab Emirates – Only entities registered in the free zones and not subject to the Wage Protection System (WPS) compliance requirements.
  2. Saudi Arabia – Only small entities not subject to the WPS. Entities that are subject to the WPS require a special exemption from the Ministry of Labor. Also only a small number of local banks are able to process WPS files in currencies other than SAR.
  3. Bahrain, Kuwait, Oman, Qatar, Lebanon, Jordan and Egypt have no effective restrictions that limit non-local currency salary payments.

Can the salaries be paid in multiple currencies?

Salaries can be paid in multiple currencies if the particular country does not require paying salaries in the local currency. This means that the company can pay either the same employee in multiple currencies (e.g. 50% in local currency and 50% in USD) or different employees in different currencies (e.g. some employees in USD and others in EUR).

What are the potential issues in processing payroll in multiple currencies?

Contact Mercans at [email protected] or visit our website at https://mercans.com if you have any questions regarding managing payrolls in the Middle East.

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