The General Pension and Social Security Authority (GPSSA) has set out key rules for paying pension contributions for insured individuals, reminding employers that they are responsible for deducting and remitting contributions based on each employee’s contribution salary. The update focuses on how to determine the contribution salary, apply the correct contribution rates, meet statutory payment deadlines, and identify which month’s salary forms the basis for contributions in the government and private sectors. For government sector employees, the contribution salary comprises the basic salary plus cost-of-living allowance, social allowance for children, social allowance for citizens, and housing allowance. For private sector employees, it is the wage in the employment contract, subject to maximum and minimum salary limits set for both sectors and diplomatic missions. GPSSA cited contribution rates of 20% under Federal Law No. 7 of 1999, split 5% employee and 15% employer, with a 2.5% government subsidy of the employer share in the private sector to encourage hiring of Emiratis. It also cited a 26% contribution rate under Federal Decree-Law No. 57 of 2023, split 11% employee and 15% employer, with a continuing 2.5% subsidy for citizens with a contribution salary below AED 20,000. Contributions fall due on the first day of the following month and must be paid by the 15th; late payment triggers an automatic additional charge of 0.1% of the overdue amount per day, and contributions are non-refundable. Private sector contributions are based on the January salary each year, with new hires contributing based on their first month’s salary and then aligning to the January salary the next year, while government sector contributions are calculated monthly based on the actual contribution salary for that month.
General Pension and Social Security Authority 2026-03-17
General Pension and Social Security Authority reiterates employer rules on pension contributions including rates, salary basis and late-payment penalties
The General Pension and Social Security Authority (GPSSA) outlined rules for pension contributions, emphasizing employer responsibility for deducting and remitting based on the employee's contribution salary. Contribution rates are set at 20% under Federal Law No. 7 of 1999 and 26% under Federal Decree-Law No. 57 of 2023, with a 2.5% government subsidy for private sector Emiratis. Contributions are due on the first of the following month, with penalties for late payment, and are non-refundable.