The General Pension and Social Security Authority (GPSSA) in the UAE has announced that employers falling under the regulations of Federal Law No.57 of 2023 regarding pension and social security are obligated to enroll their Emirati employees within 30 days of their employment.
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Within 15 days prior to the completion of their service periods, entities must furnish the GPSSA with the names of insured Emiratis. Failure to comply with this requirement will result in an additional charge of AED200 per day of delay, multiplied by the number of insured employees in the entity.
Employer responsibility for contribution payments
The GPSSA highlighted that employers are responsible for making contribution payments. Therefore, statements, data, and documents, including salary details of the insured individuals, must be submitted to the GPSSA by the entity within ten days. This is necessary for calculating the predetermined contributions in accordance with the provisions of the federal law. In case of delay, the entity is liable to pay an additional AED100 for each day of delay, multiplied by the number of insured individuals.
As per Federal Law No.57 of 2023, contributions must be made starting from the date of the employee’s joining the entity, regardless of whether it occurs in the middle of a month or if the employee leaves the entity before the month ends.
Grace period and payment deadline
Contribution payments should be transferred at the beginning of each month, with a maximum grace period of 15 days. The payment amount is non-refundable. If payments are made late, the employer is obliged to pay an additional 0.1 percent of the contributions due for each day of delay, without any prior notice or warning. The additional amount should not exceed the value of the contribution due.
Calculation of contributions based on actual salaries
Contributions must be based on actual salaries, meaning that the insured individual’s payments are calculated based on the salary recorded in the contribution account. It is important to note that contributions for employees in the private sector are determined based on the January contribution account salary of each year. If an employee joins after January, contributions are calculated based on the salary of the month in which they joined the entity until the following January.
For government sector employees, contributions are calculated based on the actual contribution account salary for each month.
Additional charges for non-compliance
Failure to pay contributions based on actual salaries requires the employer to pay an additional 10 percent of the contribution value without any prior notice or warning. The GPSSA’s Board of Directors has the authority to determine which cases are exempt from this additional amount, as well as whether the exemption is total or partial.
The registration requirements also apply to individuals who acquire Emirati citizenship while working for an employer subject to the provisions of this legal decree. The registration starts from the date they obtain citizenship. However, they have the option to combine previous employment years to receive a higher pension and/or end-of-service gratuity, as stipulated in Article 8 of the federal pension law.
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