Spotlight on the UAE – A guide to implementing employee benefits technology

Nearly 90% of the UAE’s population are international migrants, creating one of the world’s most diverse workforces. Over the last few years, the UAE has improved working conditions and expanded employee benefits through national legislation and membership in organizations like the ILO and the Arab Labour Organization. Both locals and expatriates (expats) receive benefits, with some differences between public and private sectors.

The UAE consists of seven emirates, of which Abu Dhabi and Dubai are the most well-known. Each emirate often has slightly differing rules when it comes to mandatory benefits like health insurance.

Organizations that wish to stand out in the UAE are leveraging employee benefits technology to provide a more personalized, one-stop-shop experience for employees.

Mandatory Benefits

Under UAE labor law, there are multiple statutory benefits that employers must provide, including health insurance, which vary by location:

• Employers in Abu Dhabi must provide a compliant insurance plan for their employees and their dependents, administered by the Department of Health Abu Dhabi (HAAD)
• Employers in Dubai must provide a compliant insurance plan for their employees, but not for their dependents, administered by the Dubai Health Authority (DHA)

A compliant plan must meet the requirements that are stipulated by the relevant emirate and cover things like emergency and inpatient treatment. Local insurers provide more comprehensive plans that meet these requirements. However, lower income workers are likely to have the basic health card issued by the above authorities. This card is also known as the Emirates Health Services (EHS) card and allows residents access to low-cost public healthcare services at government medical facilities.

All emirates require residents to have health insurance in place.

Social security

Social security contributions are mandatory for employees and are calculated as a percentage of the employee’s gross monthly salary:

• Employers contribute 15% of an employees’ total pensionable salary in Abu Dhabi for the Abu Dhabi Retirement Pensions and Benefits Fund (ADRPBF)
• Employers contribute 12.5% of an employees’ total pensionable salary in the rest of the UAE for the old General Pensions and Social Security Authority (GPSSA), or 15% for the new GPSSA for employees registered after 31 October 2023. For employees who are on the new GPSSA scheme and earn less than AED 20,000 per month, the government will subsidize the employer contribution by 2.5%
• Employees who joined their pension scheme before 1st December 2023 must contribute 5% of their pensionable salary, and those who joined after must contribute 11%

Popular core benefits

Pension

Retirement benefits in the UAE differ based on citizenship. Local Emiratis are covered by state pension schemes, including the old GPSSA, new GPSSA, and ADRPBF (for Abu Dhabi-based employers).

For both the new GPSSA and ADRPBF, employers contribute 15% of the employee’s basic monthly salary, and employees contribute 5% of their basic monthly salary. However, for the new GPSSA, the government also contributes 2.5% on behalf of the employer for private sector Emirati employees with pensionable salaries less than AED 20,000.

In contrast, expatriates are not eligible for these schemes and instead receive an End of Service Gratuity (ESG), calculated as:

• 1.5 months’ salary per year for one to five years of service
• 2 months’ salary per year for six to 10 years
• 3 months’ salary per year for 11+ years

State pension schemes apply to Emiratis aged 18 – 60 and vary slightly:

• Old GPSSA: Pension starts at 60% of the employees’ final salary, increasing by 2% per year of service over 15 years (max 100%)
• New GPSSA: Pension equals 2.67% of the employees’ salary per year (up to 30 years), then 4% for additional years (max 100%). Minimum pension is AED 10,000/month
• ADRPBF (Abu Dhabi): 3.2% of salary per year (up to 25 years), then 2% per year (over 25 years). Minimum pension is AED 10,200/month

Employees with over 35 years of service receive an extra lump sum – three months of their final salary for each year beyond 35.

Private Medical Insurance

Most employers provide supplementary medical benefits through a group Private Medical Insurance (PMI) plan.

Employers in Dubai are required to provide the following:

An Essential Benefits Plan (EBP), which costs between AED 550 and AED 650 per year for employees that earn less than AED 4,000 per month, including dependents

A supplementary medical plan for employees that earn over AED 4,000. These employees may also be covered by the SAADA program – a government-sponsored health insurance scheme for UAE nationals who are not covered by another government health program.

Employers in Abu Dhabi are required to provide health insurance under the insurance plan or a supplementary medical plan.

Life insurance

Most employers provide supplementary death in service benefits through a Group Life Insurance plan, with some variation possible according to employer size and industry. The cover for white collar workers would normally be a minimum of AED 200,000 or two, three or four years of earnings. Life insurance cover for blue collar workers would normally be a minimum of AED 100,000. This may also include rider benefits including temporary total disability, permanent partial disability, permanent total disability and personal accident insurance.

An employer’s legal minimum liability for workers compensation is a minimum of AED 18,000 and a maximum of AED 200,000 per month.

Leave entitlements

Employees are entitled to paid leave of two days per month after completing six months of service, and 30 days after one year of service, with an additional 14 days of paid leave for official public holidays. Days can differ according to the Islamic calendar. Public sector employees have begun to have their weekend from Friday afternoon to Sunday.

Working hours during Ramadan: Article 65 of the UAE labor law states that working hours be reduced by two hours per day during Ramadan.

Additional benefits

Benefits availability tends to be fairly limited in the UAE, so it’s common for organizations to provide allowances to employees, and these allowances often reflect the globally mobile status of employees (employees who begin a new role in the UAE, whether relocating or already residing there). These benefits may include:

• A transportation allowance or car allowance. This is provided by 35% of multinationals and ranges between AED 24,000 to AED 90,000, depending on seniority
• A housing allowance. This is provided by 35% of multinationals and ranges between AED 4,000 to AED 25,000 per month, depending on seniority

Some employers also offer an allowance for one return flight home for expats, or an education allowance for children.

Wellbeing allowances are also growing in popularity and can be used for local gym or sports club memberships. And some of our customers have recently launched allowances to help with equipment and broadband costs for employees working from home.

We’re also seeing 50% of our customers offering savings plans and financial advice to their employees, to help support their financial wellbeing.

Key considerations for implementing employee benefits in the UAE

1. Simplify communication with a centralized benefits platform. In the UAE, a platform can serve as a central point of information where employees can access details about their benefits and understand how the local laws and entitlements apply to them. This helps create transparency and consistency, especially in a region where benefits can vary across emirates.
2. Support a multinational workforce with localized guidance. The UAE’s workforce is highly diverse, with a large proportion of non-local employees. Clear, culturally relevant guidance – especially around complex areas like the healthcare system – can reduce confusion and minimize HR queries.
3. Streamline administration with technology. A digital platform can be used to manage allowances and other benefits in one place, reducing manual administration for HR teams. With employees often working across multiple emirates, benefits technology can ensure each person sees only the benefits relevant to their location, improving the employee experience.

To learn more about the benefits landscape in the UAE, or to see how a global benefits platform can help you deliver a seamless employee experience in the emirates, speak to one of our benefits experts.