GPSSA orders employers to pay full pension shares for Emirati staff

Private and public sector employers must now bear the full cost of pension contributions for their Emirati staff, according to a clarification issued by the General Pension and Social Security Authority (GPSSA) on Thursday, 6 August. The announcement mandates that organizations fulfill their financial obligations toward the national workforce without deducting these specific employer-side costs from the employee’s salary. Contribution breakdown and mandates Under the UAE Federal Pension Law, the total contribution for an Emirati employee is calculated as a percentage of their pensionable salary. For those covered under the new Federal Decree-Law No. 57 of 2023, the total contribution rate is 26%. Of this total, the employer is responsible for paying 15%, while the employee contributes 11%. For employees registered under the previous 1999 Law, the total rate is 20%, where the employer pays 15% (with 2.5% subsidized by the government in certain cases) and the employee pays 5%. The GPSSA emphasized that the employer’s share is a legal obligation independent of the employee’s take-home pay. Any attempt to pass these costs onto the staff member through salary deductions or benefit reductions constitutes a violation of federal labor and pension regulations. This directive ensures that the net income of Emirati professionals remains protected as the government expands the private sector workforce. Compliance and legal implications The timing of this clarification follows the…