Questions & Answers
What does the new law for Emirati employees say about the pension contributions?
The monthly contribution of the insured is 26 percent of the pensionable salary. The insured employee pays 11 percent and the employer pays 15 percent.
For insured citizens working in the private sector, the government pays 2.5 percent on behalf of the employer, if they receive pensionable salaries less than AED 20,000.
This initiative by the government is aimed at promoting the employment of UAE citizens in the private sector.
Is this under the new law for new Emirati employees?
11% salary deduction, 12.5% for employers, and 2.5 % government pay.
Please enlighten me.
Dear R.,
Yes, the information you're referring to is indeed in line with recent changes in the UAE pension system for Emirati employees, particularly those working in the private sector.
Under the new pension law for UAE nationals, which was implemented in 2020, the pension contribution structure for Emirati employees in the private sector has been updated as follows:
Employee Contribution: The employee (UAE national) is required to contribute 11% of their pensionable salary.
Employer Contribution: The employer contributes 15% of the employee’s pensionable salary.
Government Contribution: For Emirati employees earning a salary less than AED 20,000, the government contributes 2.5% on behalf of the employer. This is part of an initiative to promote the employment of UAE nationals in the private sector.
So, if the employee's salary is less than AED 20,000, the total pension contribution is effectively 26% (11% from the employee, 15% from the employer, and 2.5% from the government). If the salary exceeds AED 20,000, the employer’s contribution remains at 15%, but there will be no government contribution.
This initiative was put in place to encourage the employment of UAE nationals in the private sector, ensuring that they receive proper pension benefits while also providing some support from the government for those in lower salary brackets.
Let me know if you need further clarification or assistance!
Regards,
Mohammed Salah
Yes, this applies to the new law for newly hired Emirati employees.
The monthly contribution for insured individuals is 26% of the pensionable salary, with the employee contributing 11% and the employer paying 15%.
If the pensionable salary is less than AED 20,000, the government contributes 2.5% on behalf of the employer. This initiative is aimed at encouraging the employment of UAE nationals in the private sector.
For any legal inquiries regarding this or other matters, contact us via WhatsApp.
This initiative is part of the Nafis program launched by the government to support Emiratisation, in coordination with the Ministry of Human Resources and Emiratisation and the Pensions and Social Security Fund.
The new laws apply to new Emirati employees working in the private sector, including the aforementioned percentage deductions.
If you are an employer or a new Emirati employee, you can obtain accurate details through the Nafis platform or contact the Pensions and Social Security Fund to ensure compliance.
Dear Client,
Thanks for your question! I hope you are doing well. I will assist you in this matter.
The Partners Pension Rebate in the Nafis platform is a five-year government initiative that offers a 2.5% rebate on pension contributions for Emirati employees earning less than AED 20,000 per month.
This program aims to encourage private sector companies to hire Emiratis by reducing their financial burden, supporting the creation of 75,000 jobs for nationals.
The total pension contribution is 26% of the salary, with employers contributing 15% and employees 11%.
Thanks & Regards,
ABDUL WAHIED
