أسئلة وأجوبة
Do we need to deduct the pension contributions from the Emirati employee salary?
Do we need to deduct the pension from an Emirati employee salary who is earning a gross salary of AED 4200, basic is AED 2520, and other allowances of AED 1680?
Where should we register the pension?
What is the law for this?
Thank you!
Under UAE law, companies are required to deduct 5% from the Emirati employee's basic salary for pension contributions, and the employer contributes 12.5%.
The pension should be registered with the Federal Pensions Authority or the relevant local authority depending on the emirate where the employee works.
We recommend reaching out to us for further details on how to register and deduct pension contributions according to the law.
AED 126 per month shall be deducted from the employee as a pension contribution.
The employee shall be registered with the Pensions and Social Insurance Authority.
Law No. 7 of 1999 shall be complied with to ensure legal compliance and provision of pension benefits to the employee.
Dear R.,
The pension contribution is calculated based on the basic salary only, not the full gross salary.
The employer's contribution to the pension is 12.5% of the employee's basic salary.
The employee’s contribution is 5% of the basic salary.
In your case:
Basic salary = AED 2,520
The employer would contribute 12.5% of AED 2,520, which is AED 315.
The employee would contribute 5% of AED 2,520, which is AED 126.
The pension contributions are based on the basic salary (AED 2,520 in your case).
The employee's contribution is 5%, and the employer's contribution is 12.5%.
The pension should be registered with the GPSSA, and the contributions should be made monthly.
If you need further clarification or assistance with the registration process, feel free to reach out!
Regards,
Mohammed Salah
Dear Client,
Thanks for your question! I hope you are doing well. I will assist you in this matter.
Yes, you need to deduct pension contributions from the Emirati employee's salary, based on the basic salary of AED 2,520. The typical contribution is 5% from the employee and 15% from the employer.
You must register the employee with the General Pension and Social Security Authority (GPSSA) within one month of their joining.
Required documents include a passport copy, Emirates ID, family book, and employment contract. Compliance with this regulation is mandatory to avoid penalties.
Thanks & Regards,
ABDUL WAHIED
