The GPSSA explains ways by which a retirement pension is calculated under the new Federal Law No. (57) of 2023

09/12/2024 General | General Pension & Social Security Authority

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It is important that new Emirati employees who have registered with the General Pension and Social Security Authority (GPSSA) for the first-time starting 31st October 2023 are aware of the mechanisms by which their contribution account salaries are calculated, since this serves as the foundation by which contributions are calculated and due amounts are paid, as per the new Federal Law No. (57) of 2023. 

Newly insured members under the new law receive 2.67% of the pension rate for each year of their contribution period for up to 30 years. When the insured exceeds 30 years of contributions that rate increases by 4% each year and he/she is considered eligible to receive 100% of the pension amount once the employment period has reached a maximum of 35 years.

Insured Emiratis should be aware of the rules, provisions and terminologies governing the pension law in order to be able to calculate their own retirement pension. For that purpose, the GPSSA has launched the 'Know Your Law' awareness campaign in the beginning of the year following the introduction of the 2023 federal pension and social security law, with an intent of helping insured employees understand the ways by which they can calculate their pension amount.

A contribution account salary, explained ... 

The contribution account salary is the first and most important process by which contributions are calculated and insurance benefits are paid; additionally, the contribution account salary determines the required amount to be deducted from the insured's monthly salary. Simply put, the contribution account salary serves as an introduction to enhancing one's insurance and pension awareness in general.

The GPSSA explains ways by which the contribution account salary is calculated for insured Emiratis, since it is the initial step to be aware of when calculating the retirement pension. 

For Emiratis working in the government sector, the contribution salary is based on the insured's basic monthly salary, cost of living allowance, social allowance for children, social allowance for the citizen, as well as housing allowance, provided that it does not exceed the contribution account salary, with a maximum amount of AED 100,000. 

For Emiratis working in the private sector the contribution account salary is based on the salary determined as per the employment contract, provided that the contribution account salary is not less than AED 3,000 and does not exceed AED 70,000.

The contribution account salary for insured Emiratis who work in any of the regional, international missions or are foreign politicians working in the UAE, is calculated on the basic salary as specified in the employment contract, in addition to benefits, bonuses or allowances that are granted during the employment duration in accordance to the contribution account salary determined in the private sector.

The term average contribution calculation salary means ... 

This is the second most important term to understand, since it includes calculating the retirement pension for employees working in both government and private sectors, as well as those employed in diplomatic and political missions for the last six years of the contribution period, or for the entire contribution period, if it is less than that. 

The value of the average contribution account salary is calculated by multiplying the contribution account salary for each of the last six employment years by 12 months. The amount is then compiled and divided by 72 months. 

The pension salary and how it's calculated ...

The pension calculation salary is the total amount given to insured Emiratis once they are ready to retire and receive their pension. The entitled percentage is calculated based on the number of years the insured has spent working.  

As mentioned in the beginning of this PRL, pension is calculated at the rate of 2.67% of the pension calculation salary for each year within a contribution period of 30 years. This percentage increases by 4% for every year exceeding this period, until the employment period reaches 35 years, during which the insured is eligible to receive the entire pension amount.


It is important to note that the method and provisions to calculate pension differs for ministers, council of ministers and representatives, in addition to the difference in the maximum salary when calculating contributions, and Article (20) of Federal Decree Law No. 57 of 2023 which clarifies these provisions.

General Pension & Social Security Authority 

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