GPSSA Explains Pension Schemes in the UAE

March 6, 2024 hr-hrobserver-GPSSA-pension-UAE

The General Pension and Social Security Authority (GPSSA) in the United Arab Emirates (UAE)  said it is important to distinguish between the contribution requirements between the two applicable pension and social security laws affiliated with the authority.

In a press statement, GPSSA explained that the contribution account salary is the salary by which an employer shares and that of the insured Emiratis share of contributions are due from the beginning of each month. 

“The longer a person contributes, the better the pension or end-of-service benefits are,” said GPSSA in the statement. The authority has previously launched “Know Your Law” campaign to create awareness around pension in the country.

The authority explained that the contribution amount as per Federal Law No. (57) of 2023 regarding pension and social security is 26%, out of which insured Emiratis who have joined the workforce starting 31st October 2023 bears a percentage of 11%, while the employer pays 15%, these contributions are paid according to the insured’s contribution account salary.

“The government bears a 2.5 % share on behalf of private sector employees whose contribution account salaries are less than Dh20,000 as a form of support for Emiratis working in the private sector,” explained GPSSA. 

The provisions for Federal Law No. (7) of 1999 for pension and social security and its amendments apply to Emiratis employed prior to 31st October 2023, and entail a total of 20% in contributions, out of which the insured bears five%, whereas the government and private sector bear 15%.

The UAE government pays 2.5% of the percentage owed by the private sector entity as a form of support, similar to the 2023 federal law, explained GPSSA.

The elements comprising the contribution account salary, which undergo deductions for Emirati government sector employees, includes the insured individual’s basic salary, cost of living allowance, social allowance for dependents, and housing allowance. It’s important that the contribution account salary does not exceed Dh100,000.

For private sector employees, the law stipulates the contribution account salary to be determined by their employment contract, ensuring it ranges between Dh3,000 and Dh70,000.

As for insured individuals working in regional, international, or foreign missions within the UAE, their contribution account salary is based on their basic salary as outlined in their employment contract, along with any benefits, bonuses, or allowances provided in recognition of their services.

The new law dictates that the GPSSA’s Board of Directors may determine the elements that are included in calculating the contribution account salary in cases whereby the employer applies a schedule for their employees’ salaries. 


The HR Observer

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