What is Social Insurance (GOSI)?
Social insurance in Saudi Arabia is administered by the General Organization for Social Insurance (GOSI), providing retirement, disability, occupational hazard, and unemployment (SANED) benefits funded by mandatory employer and employee contributions on monthly wages.
How It Works
Which rate applies depends on when the employee was first registered with GOSI, not on their current hire date.
Existing system — first registered before 3 July 2024
- Pensions 9% employee + 9% employer; SANED 0.75% each side; occupational hazards 2% employer only.
- Totals: employee 9.75%, employer 11.75%.
New system — Royal Decree م/273, first registered on or after 3 July 2024
The pensions rate steps up 0.5% per side each year, every step starting 1 July:
| Effective from | Pensions — employee | Pensions — employer |
|---|---|---|
| 3 July 2024 | 9% | 9% |
| 1 July 2025 | 9.5% | 9.5% |
| 1 July 2026 — in force now | 10% | 10% |
| 1 July 2027 | 10.5% | 10.5% |
| 1 July 2028 | 11% | 11% |
SANED 0.75% per side and occupational hazards 2% (employer) sit on top and do not step, so today a new-system subscriber costs 10.75% employee / 12.75% employer.
- Non-Saudi employees: 2% occupational hazards, employer-paid only. Nothing is deducted from the employee and there is no SANED.
- Contributory wage: basic wage plus the housing allowance (cash, or in kind valued at two months’ basic wage). Transport, food and other allowances are outside the base — Executive Regulation Art. 17 lists three components and no fourth.
- Ceiling: SAR 45,000/month, set by Article 8 of the Social Insurance Law (م/273).
- Contributions are due within the first 15 days of the month following the month they relate to (Executive Regulation Art. 24).
Saudi Context
Article 10 of the Law makes GOSI compliance a business-continuity matter: government bodies and companies more than 50% state-owned must require a GOSI compliance certificate before the employer can collect receivables, bid on tenders, amend, renew or cancel its commercial register, receive subsidies, liquidate, obtain or renew a licence, or apply to recruit workers from abroad. Late payment carries a fine of 2% of the contribution due for each month of delay or part of a month (Law Art. 9/3), and GOSI’s dues never lapse with the passage of time (Executive Regulation Art. 27).
Example
A Saudi employee’s monthly entitlements are SAR 12,000: SAR 9,000 basic + SAR 1,500 cash housing allowance + SAR 1,500 transport allowance. The contributory base is SAR 10,500 — transport is excluded.
If first registered before 3 July 2024: employer 11.75% × 10,500 = SAR 1,233.75, employee 9.75% × 10,500 = SAR 1,023.75, total remitted SAR 2,257.50. If first registered on or after 3 July 2024: employer 12.75% = SAR 1,338.75, employee 10.75% = SAR 1,128.75. Remit within the first 15 days of the following month.