Pensions in the UAE for UAE and GCC nationals

Governments of the Gulf Cooperation Council (GCC) member states – Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates – have implemented state pension schemes for the benefit of their employed citizens.

In the UAE, pension provision is governed by the Federal Pensions and Social Security Law No.7 of 1999 and enforced by the General Pensions & Social Security Authority (GPSSA). It applies equally throughout the UAE to all employers, including the various free zones, and mandates that all eligible employees – UAE or GCC nationals – must be registered with the GPSSA within the first month following the commencement of their employment.

Eligible UAE and GCC nationals working in both government and private sectors are eligible for pensions and other retirement benefits after reaching the retirement age. GCC nationals employed in the UAE are entitled to pension benefits in accordance with the schemes established in their home countries. These employees are not entitled to receive an end-of-service (EoS) gratuity.

In the UAE, Emiratis are eligible for pensions and other retirement benefits after reaching the retirement age of 49 or serving a minimum of 20 years in total. Expatriate employees have their EoS entitlement covered by the UAE’s gratuity scheme.


Only employed UAE nationals who hold a ‘family book’ are entitled to be enrolled in the GPSSA pension scheme and are subsequently not entitled to receive an EoS gratuity when they leave an organisation. Those UAE nationals who are ineligible for registration are entitled to receive an EoS gratuity payment – or be registered with a qualifying company pension scheme – in accordance with UAE labour law.

GCC nationals, however, qualify for registration by default based on their nationality and need not submit any proof other than their passport.

Importantly, registration is a mandatory requirement for both GCC and eligible UAE nationals. Emiratis aged between 18 and 60 are eligible for the scheme subject to providing a medical and fitness report endorsed by a certified GPSSA centre.


Before registering eligible employees, an employer must first register with the GPSSA and obtain a registration number, a process which usually takes five working days following the submission of the required documentation. This is especially important when considering the fact that eligible employees must be registered within one month of the date of commencement of their employment and this registration process can also take up to 14 working days.

Late registration may be penalised in the form of late fees or fines. As a consequence, it is useful for an employer to begin their organisational registration process with the GPSSA sooner rather than later, even if the company has not previously employed UAE or GCC nationals. Individual employees have a single registration number which remains with them for their entire working life in the UAE.

Payment of contributions

Both the employee and employer are responsible for making contributions to the employee’s pension fund. The level of contribution is dependent upon an employee’s nationality because amounts vary across the GCC states. It is the employer’s responsibility to ensure that both contributions are collected and paid on time. They can ensure this by automatically deducting the employees’ contribution from their salary on a monthly basis and remitting it to the GPSSA along with the company’s due amount.

In respect of government employment, an eligible UAE national employee is required to contribute 5% of their monthly salary and the government employer is required to contribute 15%. In respect of private sector employment, employers would pay in 12.5% with an additional 2.5% being contributed by the government.

Fines and penalties

Employers may be fined for late payment by the GPSSA at a daily rate of 0.1% of the contribution for each day that the payment is delayed. For failure to register eligible employees, the GPSSA may also levy a fine of AED5,000 per case, in addition to the obligation to pay up the unpaid contributions.

We have noticed a concerted effort on the part of the local authorities to identify and penalise employers that are not in compliance with their specific pension requirements. This has included liaising directly with the various free zones in the UAE as well as the Department of Economic Development, and even conducting physical inspections of company premises.

It is expected that this scrutiny will only intensify in future and we would strongly recommend that all relevant employers take steps to register both themselves and their eligible employees with the GPSSA at the earliest opportunity.

Sovereign has long experience in dealing with the GPSSA and is able to assist clients in all matters concerning the pension schemes of their UAE or GCC national employees. This includes registering client entities with the GPSSA, classifying employees as to their pension category, registering them accordingly and calculating the amounts to be contributed to the scheme.

For more information on the UAE national pension scheme, or for assistance in registering with the GPSSA, please contact Sovereign Dubai.

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