There is one sentence on the UAE Government’s own portal that settles most questions about UAE pensions for the majority of people who live here: “There are no pension schemes for expatriate workers in the UAE; however, they are entitled to end of service gratuity.”
That is the fault line. There is a real, contributory pension system in this country — and if you are not an Emirati or GCC national, you are not in it. Here is how both sides work.
The Emirati pension system
Pensions for UAE nationals are run by the General Pension and Social Security Authority, and there are now two laws running in parallel depending on when you started work.
Federal Law No. 7 of 1999 covers every citizen who was in service before 31 October 2023. Federal Decree-Law No. 57 of 2023 covers Emiratis joining from 31 October 2023 onward. GPSSA is explicit that the new law does not apply to those employed before that date, does not apply to anyone already drawing a pension, and does not apply to those who took end-of-service gratuity beforehand — even if they return to the labour market.
One structural point that surprises people: GPSSA does not cover everyone. Its remit excludes Abu Dhabi, which is why a separate Abu Dhabi pension fund exists.
Contribution rates, old and new
Under the 1999 law, total contributions come to 20%:
| Sector | Employer | Employee | Government support | Total |
|---|---|---|---|---|
| Government | 15% | 5% | — | 20% |
| Private | 12.5% | 5% | 2.5% | 20% |
Contribution account salary is capped at AED 300,000 in the government sector, and runs from AED 1,000 to AED 50,000 in the private sector.
Under the 2023 law, total contributions rise to 26% — the employee bears 11% and the employer 15%. The government supports private-sector employers of Emiratis earning under AED 20,000 by paying 2.5% of the employer’s 15% share, so those employers effectively pay 12.5%.
The ceilings changed too: the contribution account salary maximum rises to AED 70,000 in the private sector and AED 100,000 in government, with the average calculated over the last six years of employment in both sectors.
Do not mix the two regimes. The 20% rate and the AED 50,000 ceiling belong to the old law only — conflating them with the 26% regime is the single easiest way to get this wrong.
How the pension is calculated
Under the 2023 law, pension accrues at 2.67% of the pension calculation salary for each year of contribution up to 30 years, then increases by 4% for each year beyond 30, to a maximum of 100% of salary. Where the contribution period exceeds 35 years, a gratuity of three months per additional year is paid.
Under the 1999 law, entitlement conditions include retirement at 60 with at least 15 years of service, or resignation at 50 with 20 years. Dismissal cases with 15 years attract a 10% deduction from the pension value.
The 2023 law also carries specific provisions for women: the baseline is 30 years of service and age 55, with reductions available — two years for mothers, three years at age 52, 3.5 years for women with five or six children, and four years for those who have turned 51 or had a seventh child.
Beneficiary shares differ between the laws, which matters for estate planning alongside a will. Under the old law: widow or eligible husband 37.5%, children 50%, parents 12.5%. Under the new law: 40%, 40% and 20%.
What expatriates get instead
End-of-service gratuity, calculated according to years in service. A worker is entitled to gratuity for a served fraction of a year once they complete one year of continuous service, and benefits are calculated on the last basic salary — not total package, which is where most disappointment comes from. Our guide to calculating gratuity with worked examples covers the arithmetic.
Expatriates in ministries and federal entities use a different and more generous formula: one month’s basic salary per year for the first five years, 1.5 months per year for the next five, and two months per year thereafter, the latter two calculated on the last five years’ average.
GCC nationals are a third case again: UAE employers must make mandatory subscriptions for GCC employees according to the social security law of their home country.
The voluntary savings alternative
Since 1 November 2023, a Voluntary Alternative End-of-Service Benefits Scheme has existed under Cabinet Resolution No. 96 of 2023, implemented by MoHRE with the securities regulator. Participation is voluntary.
The mechanics deserve attention. Workers keep gratuity earned before subscribing, but the existing gratuity system is suspended for those who register, with accrued entitlements fixed at the date they join. Employees may make additional contributions of roughly 25% of total annual salary, and may withdraw contributions and returns under the scheme’s terms.
There is a protective distinction worth knowing: skilled workers choose their investment option, while unskilled workers are placed only in the capital-guaranteed portfolio. The scheme is also open to self-employed people, freelance permit holders and non-citizen government employees. Our guide to the end-of-service savings schemes covers how these work in practice.
What this means if you are planning
If you are an expatriate, your UAE retirement provision is whatever you build yourself. Gratuity is a lump sum tied to final basic salary, not an income for life, and it does not index. That is not a criticism of the system — it is simply what it is, and planning as though a pension is accruing is the mistake.
For the surrounding entitlements, see our guides to unemployment insurance, the Wage Protection System and Emiratisation and Nafis, which from September 2026 shifts pension contribution costs onto private employers.
This article is general information, not financial or legal advice. Primary sources: the GPSSA FAQ, GPSSA on Federal Decree-Law 57 of 2023, the UAE Government portal on pensions for expatriate workers and MoHRE on the Voluntary Alternative Scheme.
