General Pension and Social Security Authority (GPSSA) in the UAE
HLB UAE Payroll Team
GPSSA (General Pension and Social Security Authority) was established in the UAE under Federal Law No. 6 of 1999 to provide pension and social security for the citizens of the UAE. All working citizens are eligible for a pension in the event of old age, disability, or death as a result of a work-related injury.
Here, our payroll experts in the UAE take you through a set of frequently asked questions that pertain to GPSSA in the UAE.
To whom does the GPSSA law apply?
The GPSSA Law applies to all UAE citizens who work in the government or private sectors in Dubai, Sharjah, Ajman, Ras Al Khaimah, Fujairah, and Um Al Quwain.
What is the timeline for registering UAE nationals under the provisions of the Pension and Social Security Law once an employee joins a company?
An employer (whether government or private sector) must register UAE national employees with the authority within one month from the date of joining.
What are the documents required for the registration of UAE nationals with GPSSA?
- Copy of Passport
- Copy of Emirates ID card
- Copy of the Family Book ID
- Birth Certificate Copy or Age Estimation Document
- 3 filled copies of the “service start form” of the insured (service start form no. 1).
- Appointment letter, self-procedure, or employment contract (for the governmental sector).
- Original copy of employment contract attested by the Ministry of Labor for citizens working in the private sector.
- Photocopy of medical examination upon appointment.
What is the minimum and maximum age for registering an employee with GPSSA?
Age shall not be less than 18 and not more than 60 years.
Is there any document proving that a UAE national employee has been registered with the Authority?
Yes, the authority issues an insurance number to the employee upon the completion of his registration by the employer. The employee should confirm with his/her employer that registration is completed within one month of their joining date.
What is the percentage of contribution applied to UAE nationals in GPSSA Government Sector?
- Employer Contribution = 15%
- Employee Contribution = 5%
- Employer Contribution = 12.5%
- Employee Contribution = 5%
- Government Contribution = 2.5%
What is the base amount for calculating social contributions?
Government sector: basic monthly salary, social allowance of a national, allowance for children, allowance for cost of living, and allowance for accommodation.
Private sector: contractual salary stipulated in the employment contract, including basic salary and allowances (to be paid on a regular and monthly basis).
Is there any maximum limit for the GPSSA base amount?
Yes, maximum base amount for calculating GPSSA is AED 50,000/-
Is there any minimum limit for the GPSSA base amount?
Yes, the minimum base amount for calculating GPSSA is AED 1,000.
What is the basis for calculating social contributions in the private sector?
The January salary of each year is the basis of the social contribution calculation for the remaining months (i.e. February to December). After the month of January, no salary increases or decreases will be considered. If the employee joins after January, the salary calculated for social contribution purposes in the month of joining will be the basis for payment of contributions until December.
How will social contributions be calculated for a new hire and a leaver (termination) if he/she joined and left in the middle of a month?
In relation to the private sector, social contributions will be paid to the authorities for the full month in which the service started, other than the part of the month wherein it is terminated.
How will social contributions be calculated in the private sector during special vacations without pay or unpaid vacations for study?
The insured (contributor) shall bear his share as well as that of the employer’s share in the contributions.
How can a company make a payment against their monthly GPSSA Contribution?
The company can deduct the employee portion through payroll and pay the total contribution, i.e., both employer and employee contribution to GPSSA. Employer has to make payments to GPSSA through employer’s bank or through Exchange Houses and all transactions must be done through UAEFTS. Direct deposit, cash payment, cheque payment or wire transfer is not acceptable for GPSSA payment. Employer has to contact their bank to enable the payment process. While creating UAEFTS for GPSSA payment, Emirates ID number, company number, salary information, pension year, and month should be provided as remittance information. All the transactions to GPSSA should be in AED currency only.
When shall the employer pay contributions to the authority?
The deadline for completing the GPSSA payment is the 15th of the following month. I.e., the last date for paying the January contribution is the 15th of February.
What are the consequences of the employer’s failure to pay contributions in a timely manner?
The employer shall become liable to pay an additional amount at the rate of 0.1% of the payable contributions per day of delay without the need for warning or notice by the authorities.
To sum it up, the GPSSA is a significant initiative put forward to protect the rights of citizens as it applies to all companies in the UAE, including free zones, and requires that all qualified employees – UAE or GCC nationalities – be registered with the GPSSA. In order to develop a new long-term strategy in the evolving social environment of the UAE, social contribution has been made mandatory with the goal of serving UAE residents and families.
UAE Payroll Process
The process of payroll is a little complicated and time-consuming; hence it is always recommended outsourcing your company’s payroll function. Outsourcing payroll will ensure the assistance of a team of trained payroll professionals and it frees up the time of the organization, helping them focus on other projects that add value to their business. One should be extra vigilant while selecting their payroll provider, as payroll data is highly sensitive, and one should opt for a provider that can ensure high levels of data security.
As a leading payroll outsourcing company, HLB HAMT can help solve your payroll complexities through customized strategies. We take care of our clients’ entire payroll cycle that includes preparation of payroll reports, processing salary payment with WPS compliance, accrual management including Gratuity, pension funds, an online portal for accessing payslips, and many more. Our leadership team spends the necessary hours in every project, ensuring our clients get refined consulting services to take your business forward.
To know more about our payroll process, click here.
Whilst every effort has been made to ensure the accuracy of this information, HLB HAMT will not accept any liability arising out of errors or omissions. Please note that this blog is not all-inclusive. Our guidance is designed only to give general information on the issues/topics covered. It is subject to change and is not intended to be a comprehensive summary of all laws which may be applicable to your situation, treat exhaustively the subjects covered, provide legal advice, or render a legal opinion.
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