UAE GPSSA introduces daily penalties for late GCC national pension contributions

The contributions are required for employees under the Unified Protection Extension System, which guarantees GCC nationals working in any GCC country receive the same social security coverage as they would in their home country.

From 1 July 2025, the GPSSA will begin implementing penalties on employers who delay the payment of due contributions for their GCC national employees.

The penalties will be applied according to deadlines specified by federal pension laws in the UAE, and are considered a rightful entitlement of the pension authorities in the employee’s home country.

Contributions are due on the first day of the month following the period for which they are owed, with a grace period extending until the 15^th of that month. Contributions for July 2025 must be remitted to GPSSA between August 1 and 15, for example.

A daily penalty of 0.1 per cent of the outstanding contributions will be charged for each day of delay, starting from the 16^th of the month, without prior warning or notification.

The decision activates Article 12 of the Protection Extension System Law and aligns with the outcomes of the 23^rd meeting of the Committee of Heads of Civil Retirement and Social Insurance Agencies in GCC countries.

This article mandates the pension authority in the host country to pursue delinquent employers and take legal action to collect contributions and penalties on behalf of the employee’s home country pension authority.

The Protection Extension System is mandatory, under which employees are required to register their GCC national employees in both the government and private sectors and remit contributions according to the insurance system of the employee’s home country.

The employer’s share of contributions should not exceed the employer’s contribution share in the host country, with any difference in contributions to be borne by the GCC national employee.

The system was established under Cabinet Resolution No. 18 of 2007 to regulate social security protection for GCC nationals working outside their home country within any GCC member state. GPSSA oversees its implementation in the UAE.