Skip to content
Vertrekklaar
Menu
NederlandsLog inPrices and plans

No pension in Dubai: the gratuity, the AOW trap and what you have to do yourself

The state portal says it literally: there is no pension scheme for expats. The end-of-service gratuity is capped at two years' salary, your AOW (the Dutch state pension) accrual stops, and in the UAE a single person gets the married rate of the AOW, almost a third less gross. That applies for as long as you live there, and voluntary insurance does not solve it. The zero-tax trade only works for whoever puts the difference aside themselves.

5 min read

Written and checked by Auke on , against the sources at the bottom. Is something no longer right? Report it below and I'll fix it.

If you work in Dubai, you build up no pension. "Zero per cent income tax" is the shortest recruitment text in the world, and it's correct. What isn't mentioned: zero per cent also means that nothing is being built up for you.

This article sets out the three gaps, and the plan that closes them:

  • There is no pension, only a farewell present.
  • Your AOW accrual stops.
  • As a single person in Dubai you only get the AOW for married people.

Gap one: there is no pension, only a farewell present

The UAE state portal is unusually honest about it: there are no pension schemes for foreign workers. What the law gives you is the end-of-service gratuity: a lump sum when your employment ends, after at least one year of continuous service.

  • You get 21 days' pay per year of service for the first five years, and 30 days a year after that.
  • It is calculated on your last basic salary. Allowances for housing, transport or utilities don't count.
  • It is capped at two years' salary.

Whoever works ten years in Dubai therefore leaves with at most a few months' salary per five years worked. That's a bonus, not an old age. Watch out for it in the contract: a package with a low basic salary and high allowances hollows out your gratuity.

Gap two: your AOW accrual stops

Every year outside the Netherlands cuts your later AOW (the Dutch state pension) by 2%. Ten years of Dubai is therefore 20% less AOW, for life. This gap is repairable, with the voluntary AOW insurance:

  • You apply for it from two months before until at most one year after the end of the compulsory insurance (usually the day you leave).
  • You must have been insured for at least a year immediately before leaving.
  • It runs for at most ten years. Longer is possible if you are over fifty at the start.
  • The premium in 2026 is 17.9% of your income, at least € 569 and at most € 5,693 a year.

If you can take part at the minimum premium, that is almost always a good buy.

What Amount or period
gratuity, first five years of service 21 days' basic salary a year
gratuity, every year after that 30 days' basic salary a year
gratuity cap two years' salary
applying for voluntary AOW insurance from 2 months before to 1 year after the end of compulsory insurance (usually departure)
duration of voluntary insurance at most 10 years
premium voluntary insurance (2026) 17.9% of your income, at least € 569, at most € 5,693
AOW for married / single people 50% / 70% of the net minimum wage
AOW in a country without a treaty only the married-person AOW, for singles too

Rather have everything for Dubai on one list?

Then we'll send you the departure checklist for Dubai, with every step in order, and five mails about the pitfalls and the real costs. You can switch it off at any time.

We use your address, and your departure date if you fill it in, only for the checklist, the guide and the mails after it. You can unsubscribe under every mail.

Gap three: the singles trap, and voluntary insurance won't repair it

Here is the rule virtually nobody knows. The UAE is not on the SVB's list of treaty countries. Without a treaty you can only keep receiving the AOW for married people, even if you are single. The Dutch government says it in so many words. The reason: your living situation cannot be checked there.

Concretely: 50% of the net minimum wage instead of 70%. This doesn't hang on your accrual but on your country of residence, so voluntary insurance doesn't help against it. If you want to grow old single in Dubai, you have to bridge this difference yourself. Or you live in a treaty country by then.

And the fourth surprise: your Dutch pension stays taxed

Whoever thinks that "zero per cent income tax" also applies to their Dutch pension hasn't read the treaty. The tax treaty with the Emirates from 2007 follows the source-state model, unlike most Dutch treaties. That means: the country the money comes from may tax it. Article 17 lets pensions, annuities and lump-sum payments be taxed in the country they come from. It says the same about social security benefits such as the AOW.

The Netherlands therefore simply keeps its wage tax withholding on your AOW and your occupational pension, even if you live in Dubai. And because the Emirates themselves levy nothing, there's nothing to offset either. The zero-tax trade applies to your salary, not to your Dutch old age. Whoever leaves for Dubai in retirement simply takes their Dutch tax burden with them.

The same goes for what you leave behind. Dutch inheritance and gift tax follows a Dutch national for ten more years after leaving, even if your new country levies no inheritance tax itself. How that works is explained in Inheritance tax after emigration.

The plan: be your own pension fund

The trade works like this. In the Netherlands you paid roughly a quarter of your gross salary towards pension and contributions. In Dubai you pay nothing and get nothing back. The difference is yours, if you put it aside.

Three rules make it concrete:

  • Choose a fixed percentage before you leave. Take as your reference point what you were losing in the Netherlands to pension contributions and national insurance.
  • Automate it from the first payslip, to an account or investment out of your daily reach.
  • Treat the gratuity as a bonus, never as a plan.

The compulsory unemployment insurance (ILOE) is the only other buffer the system knows. Take it out, and don't count on it beyond that.

Dubai pays the highest net of all destinations on this site. Whether that becomes wealth or an expensive detour, you decide in the first month, not at sixty-five.

In Vertrekklaar this is phase 5 of 5 of the journey: the same steps, but applied to your situation — in your order, tickable, and with the deadlines monitored. See the whole journey to Dubai.

What this means for your numbers →

Want to know more about this?

Then we'll send you the departure checklist for Dubai, with every step in order, and five mails about the pitfalls and the real costs. You can switch it off at any time.

We use your address, and your departure date if you fill it in, only for the checklist, the guide and the mails after it. You can unsubscribe under every mail.

What this rests on

The facts in this article come from these official pages. Rules change. When in doubt, go by the source, not this article.

Is this still correct?

Read on

Calculate your move in two minutes

Choose your country and answer a few short questions about your situation. You immediately get a range of what it costs. Free, no account needed.

Also want to know whether your departure date is feasible? Take the departure scan: seven questions, and you see your whole plan in miniature →

Calculate your move →

What does each country do with your state pension and pension?

Put two or three countries side by side. For each one you see who may tax it, how your healthcare is arranged and what the Netherlands keeps hold of. Every rule with its source, free.

Compare countries