New Social Security law in Qatar: An overview

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    The Qatari government has released a law governing pensions and retirement for Qatari citizens and revealed its new retirement pension plan. Employers in the private sector will also be subject to the new provisions, regardless of whether they are based in Qatar or a non-State jurisdiction (the Qatar Financial Centre).

    The “Social Security Law” was published in the Official Gazette of Qatar on July 3, 2022, under Law No. 1 of 2022. The prior Law (Law No. 24 of 2002) governing social security and pensions has been repealed with the implementation of the Social Security Law.

    According to the New Social Security Law in Qatar, all Qatari citizens who work for the government or the private sector and who are at least 18 years old and have regular, long-term employment for at least one year are subject to the social security system outlined in the law.

    Contributions Adhering to the Law

    According to the Social Security Law, contributions are calculated based on the contributory wage (basic salary plus social and housing allowance) with a maximum limit of 100,000 QAR). The contribution will be 21% of the contributing wage and will be made in the following ways:

    • Employer’s Contribution: 14%
    • Employee Contribution: 7%

    The Social Security plans

    The new pension scheme increased the total contribution to 21% of monthly earnings instead of the 15% contribution required by the old Pension Act.

    For employees in the public sector, the pension, which is the sum provided each month to the retiree or his beneficiaries, cannot be less than 15,000 QAR (except in some cases of termination of employment).

    The end-of-service gratuity

    The Social Security Law does not specifically mention the end-of-service gratuity. According to the Labor Law (Law No. 14 of 2004), employees who are enrolled in a pension or other retirement plan that offers them more benefits than the end-of-service gratuity are not allowed to receive both. Similarly, the Social Security Law stipulates that qualified individuals are not permitted to participate in more than one pension or another retirement plan.

    Why does HLB HAMT assist?

    HLB HAMT will be glad to assist businesses in navigating the new system and guarantee that employers are in compliance with the Social Security Law’s regulations. You may rely on HLB HAMT, one of the best payroll outsourcing companies in the GCC region, to quickly and precisely meet your demands. We have a reputable track record of offering the best payroll method from the UAE to other countries.

     

    Frequently Asked Questions

    1. What is the percentage of Social contribution applied to Qatar Nationals?

      • Total Contribution: 21%
        • Employer’s Contribution: 14%
        • Employee Contribution: 7%
    2. Is social contribution applicable to expatriates?

      Social contribution is not applicable to expatriates and are eligible only for Qatari nationals.

    3. What is the basis for social contribution calculations?

      The base amount is QAR 15000. Contributions are always calculated based on the Basic Salary + Social Allowance.

    4. Is there any maximum limit for the Social Contribution base amount?

      Yes, the maximum social contribution base amount must be set at QAR 100,000 in accordance with social security law.

    5. How is the Social Contribution paid by the company?

      The company can deduct 7% of employee contributions through payroll and pay the total contribution, i.e., 21%, to the social contribution authority’s provided account.

    6. When does the new law take effect?

      The new Social Security Law has been issued replacing the Retirement and Pension Law. It will come into effect starting Jan. 3, 2023, except for certain provisions specified by the law that became effective as of the date of publication, July 3.

    7.  What is the minimum age and service period to claim a pension?

      The minimum retirement age will be fifty years and the minimum required service period to qualify for a pension entitlement will increase from fifteen years to twenty-five years.

    8. Do Qatari nationals who are self-employed qualify for the pension plan?

      The new law allows Qatari nationals who work for themselves to choose to enroll in the new pension plan. Nationals of Qatar who are self-employed will have to pay contributions in the form of a monthly income deduction of 21%.

    9. What are the factors to consider in retirement eligibility?

      Age: New Social Security Laws increased the retirement age to 50 from 40.

      Duration of Service: Instead of 15 years of service, the minimum period needed to qualify for a pension entitlement has been raised to 25 years. A higher reward is eligible for those who have served for 30 years or more.

    10. What happens in the event of misconduct or resignation?

      Pension participation is suspended if employment is terminated and monthly contributions are not made before age 50. The pension allowance is reduced by 2.5 percent for every year that passes between the date of termination and the date of retirement. The 25-year contribution requirement remains in effect in such cases.

    11. In what manner is the new pension allowance calculated?

      Under the previous Pension Law, the pension amount was determined by dividing the employee’s cumulative service years by 5% of the last earned pay. The 5 percent number is now 3 percent of the most recently received pay under the new Law.

     

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