Key Takeaways

• BSH ensures full DEWS compliance through automated contributions, seamless integration, and accurate payroll processing.

• Employees can make optional contributions, enabling them to enhance their long-term savings and benefit from professional management.

• BSH streamlines DEWS onboarding, enhances reporting, and ensures HR teams remain compliant with evolving DIFC regulations.

Employee benefits are a key area of HCM management in Dubai. As regulatory frameworks are constantly adjusted to serve the best interests of employees, with fair, transparent, and just treatment, compliance with them in a company’s HR and payroll system is crucial. It involves many sensitive issues that, if overlooked, can result in legal consequences.

The Transition from EOSG to the DEWS Scheme

On February 1, 2020, the DIFC replaced the traditional end-of-service gratuity (EOSG) system for expatriate employees. This change was implemented through amendments to DIFC Employment Law No. 2 of 2019, as amended by DIFC Law No. 4 of 2020, and the Employment Regulations 2020.

Under the new rules, employers must make monthly contributions to the DIFC Employee Workplace Savings Plan (DEWS) or an approved alternative qualifying scheme (AQS), collectively referred to as a Qualifying Scheme.

Purpose and Impact of the DEWS Initiative

The primary aim of this regulatory initiative is to reduce the risks for employees associated with DIFC employers failing to account for EOSG liability on their balance sheets, and to protect against the consequences of the insolvency of employing entities.

Ensuring DEWS Compliance in Payroll Solutions

As a leading provider of HCM management in Dubai and payroll solutions, one of the most frequently asked questions we receive is whether our system complies with DEWS. This guide outlines how our offerings meet compliance standards and support our clients in managing DEWS contributions.

This article provides a simple guide to DEWS compliance in Dubai, outlining its key features, benefits, and the essential role it plays in enhancing the financial security of employees in the DIFC, as well as how we ensure compliance in our payroll service offerings.

What Employers Should Know About DEWS in the DIFC

The Dubai Employee Workplace Savings (DEWS) scheme represents a significant shift in how end-of-service benefits are managed within the Dubai International Financial Centre (DIFC). For employers, understanding the structure, scope, and obligations under DEWS is essential for legal compliance and maintaining competitive employee benefits.

A Modern Alternative to Gratuity

DEWS was introduced to replace the traditional end-of-service gratuity system with a more secure and transparent model. It transforms the existing benefit into a professionally managed, defined-contribution plan that offers long-term value and clarity for both employers and employees.

Eligibility and Contribution Structure

The DEWS scheme is exclusively applicable to employees within the DIFC, which operates under its own employment framework. Under this scheme, employers are obligated to make regular contributions to employees’ savings accounts, while employees have the option to make voluntary contributions through salary deductions. Upon termination of employment, the accumulated savings are disbursed as a lump sum.

Key Benefits of DEWS

• Replaces the traditional end-of-service gratuity with a funded contribution model

• Managed by professional investment firms

• Transparent, regulated, and secure

• Contributions grow over time through investment returns

DEWS Contributions: Employer and Employee Roles

Employer Contributions

Employers participating in the DEWS plan are required to contribute a percentage of each employee’s basic salary, based on the employee’s length of service:

• 5.83% for employees with less than 5 years of service

• 8.33% for employees with 5 years of service or more

These contributions are made monthly and go directly into the employee’s DEWS savings account.

Employee Contributions

Employees have the option to make voluntary contributions through salary deductions. This is entirely optional and flexible; you can choose the amount and frequency that suits your financial goals. These additional contributions help grow your personal savings beyond the employer’s mandatory contributions.

Importance of DEWS for Employers And Employees

For employers, the DEWS solution will:

• Attract top talent in the market by offering a benefits scheme that generates returns through a regulated and reliable plan administrator.

• Creates greater cash flow certainty by spreading end-of-service benefits entitlements over employees’ tenure. 

• Gain access to a world-class, cost-effective solution that is based on their current salary, rather than their final salary. 

• Have complete clarity and accountability on HR’s end-of-service liability to employees at all times, with the assurance of no further obligation once the payment is cleared.

For employees or members within the DIFC, the DEWS solution will:

• Help in having more visibility of their end-of-service benefit (EOSB) entitlement and certainty of payment. 

• Have the chance and benefit to make voluntary savings in addition to employers’ contributions to secure their long-term savings goals. 

• Have greater freedom to decide how their savings will be managed, catering to diverse risk appetites and including compliant options. 

• The benefit of having their contributions professionally managed in a low-risk, cost-effective, and flexible manner, with the opportunity to earn steady returns.

BSH Approach to DEWS Compliance in Payroll Offerings

As one of the leading solution providers for payroll and HCM in Dubai, BSH has been at the forefront of providing companies with what they need in response to regulatory changes. This is no different when it comes to integrating DEWS compliance. Our payroll solutions are tailor-made to the nature and type of your organisation, applicable laws, and relevant HR practices in place.

We offer comprehensive DEWS integration for DIFC-based companies. Our payroll offerings will ensure DEWS compliance in all aspects of the scheme, allowing your organisation to remain compliant while providing employees with the benefits they deserve.

Here’s how we support employers in fulfilling their DEWS obligations:

Seamless Registration and Onboarding

We have simplified the registration and onboarding process for DEWS in our payroll and HCM management offering in Dubai. We will guide HR managers and employers through the necessary steps to enrol in the scheme. From documentation to handling relevant administrative tasks, we will ensure a smooth transition and compliance from the outset.

Accurate Contribution Management

With the use of advanced algorithms, our payroll system can accurately calculate DEWS contributions for both employers and employees. By integrating these contributions into your regular payroll system, we will ensure the timely release of remittance to the DEWS fund, keeping you in compliance with established regulations.

Detailed Reporting and Reconciliation

No cost goes untouched. Our payroll offering and all other services catering to HCM management in Dubai take transparency and accuracy seriously. We will provide detailed reporting on DEWS contributions, investment performance, account balances, or any other information you may need. Our payroll also undergoes a regular reconciliation process to ensure that all contributions are accurately documented and any deviations or discrepancies are promptly addressed.

Regulatory Compliance

Staying up to date with the latest regulations is crucial. BSH continuously monitors updates from DIFC authorities to ensure that our payroll systems and processes are always aligned with current laws and regulations. This proactive approach mitigates risks and ensures ongoing compliance.

Employee Communication and Support

Educating employees about their DEWS benefits is crucial for their financial planning and overall well-being. BSH offers comprehensive communication support, including educational materials, informational sessions, and dedicated helplines to answer employee queries about the DEWS plan.

Integration with HR Systems

To enhance efficiency, BSH integrates DEWS compliance features with existing HR systems. This integration ensures seamless data flow between HR and payroll functions, reducing administrative burdens and minimising errors.

Challenges Businesses Encounter During DEWS Integration

While DEWS offers a more secure and transparent benefits structure, many organisations initially face operational and administrative challenges when aligning their systems with the new requirements. These may include:

• System Readiness: Legacy payroll systems may not support automated DEWS calculations and reporting.

• Awareness Gaps: HR and finance teams may lack a complete understanding of compliance obligations under the scheme.

• Data Accuracy: Inconsistent employee data can lead to errors in contribution amounts or delays in remittances.

• Employee Engagement: Without proper communication, employees may not fully utilise voluntary contribution options or understand their savings growth potential.

How BSH Addresses These Challenges

BSH’s DEWS-integrated payroll solution is built to anticipate and resolve these common issues. From data validation to compliance guidance and automated reporting, our platform ensures a smooth transition while reducing operational friction. Through our DEWS-integrated payroll services, we enable Human Resources (HR) personnel to meet compliance standards confidently while educating employees on their savings plan.

Payroll Solutions Simplifying DEWS Compliance

Discover how BSH can streamline your payroll processes and ensure DEWS compliance by visiting BSH Payroll Services. Let us help you navigate the complexities of HCM management in Dubai, providing your employees with the benefits they deserve while you focus on your core business operations. BSH’s commitment to quality and innovation ensures that your payroll processes are not only compliant but also optimised for maximum efficiency and employee satisfaction.