Key Highlights of the New Pension Law
Federal Law No. 57 of 2023
(A) Key Highlights of the New Pension Law:
- Promotes equal insurance benefits for UAE nationals in all sectors.
- Applies to Emiratis hired from 31 October 2023 onwards.
- Emiratis hired pre-31 October 2023 remain under Federal Law 7/1999.
(B) Key points relevant to the Private Sector Payroll in New
Pension Law Changes in the:
- Monthly contribution rates
- Range for monthly salary contribution base
1. Changes in monthly contribution rates
|
|
Before 31 October 2023 |
Including and after 31 October 2023 |
|
Employee |
5% of salary |
11% of salary |
|
Employer |
15% of salary (with 2.5% subsidized by government) |
15% of salary, (2.5% subsidized by government for Emiratis earning under AED 20,000 |
2. Changes in monthly salary contribution base
|
|
Before 31 Oct 2023 |
Including and after 31 Oct 2023 |
|
Minimum Limit |
AED 1,000 |
AED 3,000 |
|
Minimum Limit |
AED 50,000 |
AED 70,000 |
(C) Impact of the New Pension Law to the private sector
employers:
- Consider higher employee contribution for hires post-31 Oct 2023.
- Employers can contribute for relevant employees as per the New Pension Law:
a. 20% contribution rate until Dec 2023; settle rate difference on Jan 1, 2024.
b. Pay full 26% contribution rate from Oct 2023 onwards.
