In the UAE both employees and employers play a role, in ensuring the retirement future of Emiratis through monthly pension contributions.
These contributions overseen by the General Pension and Social Security Authority (GPSSA) vary based on the sector in which the employee is employed whether it’s in the government local government or the private sector.
Currently there are 140,880 Emiratis contributing to the GPSSA from 18,009 registered entities. Among these contributors 35,619 are in the government 35,160 work for the local government while 70,101 are employed in the private sector.
Additionally there are 37 self employed individuals and 146 Emiratis working in other Gulf Cooperation Council (GCC) countries who also contribute under GPSSA’s Unified Extension Protection System. This system also extends support to 5,843 GCC nationals working in the UAE.
How Much Do Employees and Employers Pay?
The rates for contributions are outlined, in Federal Law No. 7 from 1999. In both the government and private sectors the overall contribution rate stands at 20%. Employees are required to contribute 5% of their monthly salary while the government sector takes on a 15% share.
In the private sector employees also contribute 5% but their employers add 12.5% with the UAE government contributing an additional 2.5% to support this sector.
A recent amendment introduced through Federal Law No. 57 in 2023 expands pension coverage to include employees engaged in international and foreign policy missions.
In this case the contribution rate is slightly higher at 26% with employees contributing 11% and government sector employers covering the remaining 15%. For private sector employees earning less than Dh20,000 the UAE government steps in to contribute a 2.5% share.
Who Can Contribute?
In order to qualify for pension contributions, Emirati workers need to be aged between 18 and 60 years possess fitness for work and sign up with the GPSSA within month of starting a new job.
For citizens of GCC countries employed in the UAE the Unified Extension Protection System permits them to contribute to pension schemes in their home countries while working across all GCC states. This system applies to various sectors, such as government entities, private companies, free zones and the hospitality industry.
Special Considerations for Self-Employed
Emirati individuals working for themselves, such as business owners and freelancers, have the opportunity to ensure their future through a pension scheme. The guidelines for this process are detailed in Ministerial Resolution No. 19 issued in 2013. To qualify for registration with the GPSSA interested parties must be aged 21 to 55 possess a commercial license and be duly registered with the authorities.
