Voluntary Contributor

What a voluntary contributor is

A voluntary contributor (المشترك الاختياري) is a person covered by Saudi social insurance by choice, and the label is defined against the compulsory contributor. Coverage under the Social Insurance Law (نظام التأمينات الاجتماعية) issued by Royal Decree M/273 of 1445H rests in the first place on compulsion, because the text of the law sets out who is subject to each branch. The General Organization for Social Insurance (GOSI) administers the system. The word voluntary describes a different way of coming into the system.

Article 14(3) of the Social Insurance Law sets out who may join voluntarily: Saudi workers working outside the Kingdom who have no employment relationship with an employer headquartered inside it, and only for the pensions branch. Article 44 of the Implementing Regulation of the Social Insurance Law requires them to submit the documents the Governor specifies to prove the work relationship, and credits one month of contribution for each month for which the contribution has been paid in full. What follows places the term among the words it can be confused with, and sets out the compulsory rules an employer is bound by, which the voluntary route does not change.

Voluntary contributor, subscriber and beneficiary: the words are not interchangeable

In this area several words carry settled meanings, and swapping one for another changes the rule being described:

• Subscriber (المشترك). It refers to a person who is subject to the system. The description attaches to being subject, not to having paid and not to being entitled to a benefit.
• Beneficiary (المستفيد). It is a defined term in the Unemployment Insurance Law (نظام التأمين ضد التعطل عن العمل), where it means the unemployed subscriber who meets the conditions of entitlement. It does not mean every subscriber.

So the word voluntary in voluntary contributor qualifies the route by which a person becomes subject. It does not name a branch, and it gives an employer no discretion over whether to register an employee.

Compulsory coverage is not a choice, and the voluntary contributor label does not make it one

The scope of each of the three branches is set in the article that governs it, as the next section shows, and the rates charged under each branch, in the two parallel systems, are set out under social insurance. What concerns an employer is that any voluntary route into the system does not allow an establishment to take a compulsorily covered worker out of the system, and does not turn that worker’s registration into an organisational option. The two descriptions sit in different places: one is a status recorded against a person in GOSI’s records, the other is a duty placed on the establishment by the text of the law.

Three articles to set side by side before the voluntary contributor question

Before asking about a voluntary route, the reach of compulsory coverage needs to be known, and it is written in three articles of the Social Insurance Law, each worded differently:

• Article 14 of the Social Insurance Law, on the pensions branch, refers to Saudis (السعوديين).
• Article 43 of the Social Insurance Law, on the unemployment insurance branch, also refers to Saudis.
• Article 28 of the Social Insurance Law, on the occupational hazards branch, applies compulsorily to all employees and all workers working inside the Kingdom, and carries no nationality qualifier.

The difference between the three lies in their wording, and the reader sees it by placing them next to each other. The law does not gather it into one sentence, so no sentence of the kind “the law provides that a worker who is not Saudi is subject to one branch only” should be attributed to it. There are three texts, and the conclusion drawn from them is the reader’s.

The voluntary route has its own text. Article 14(3) of the Social Insurance Law opens the pensions branch alone to voluntary subscription, and Article 28 and Article 43 of the Social Insurance Law, on occupational hazards and unemployment insurance, carry no voluntary limb. Wording that fixes the compulsory scope of a branch says nothing about the scope of a different route, which is why the voluntary route sits in a provision of its own.

What a voluntary contributor is not

• Social security is not another name for social insurance. In Saudi usage the system discussed here is called social insurance (التأمينات الاجتماعية), while social security (الضمان الاجتماعي) refers to a welfare benefit, a separate matter. In Jordan the second term is used for what Saudi Arabia calls the first. An explanation carried from one market to another carries that confusion with it, and changing the figures alone does not remove it.
• A category whose coverage is deferred is not a voluntary category. Article 6 of the Social Insurance Law defers the coverage of seven categories, among them domestic workers and workers who are not Saudi and who come to the Kingdom on a temporary or seasonal work visa for no more than sixty days. Their coverage follows a decision of the board of directors. That is a deferral awaiting a decision, not an opening for choice, and those board decisions were not among the sources we reviewed.
• Having more than one employer is not a choice between two establishments. Under Article 8 of the Social Insurance Law and Article 19 of the Implementing Regulation of the Social Insurance Law (اللائحة التنفيذية لنظام التأمينات الاجتماعية), each employer pays the full contribution on the wage it pays itself, the total is capped at the ceiling, and where it exceeds the ceiling it is reduced proportionately. Two establishments cannot agree that one registers the worker and the other is exempt.

The contributory wage behind any voluntary contributor comparison

The Implementing Regulation cited in what follows is the regulation issued under the M/273 law. Council of Ministers Decision No. 1022, Item Two, excludes from that law subscribers who have contribution periods from before it took effect for which they were not compensated, and pensioners entitled under the earlier laws; Item Four of the same decision keeps the 1421H Social Insurance Law, the Civil Retirement Law and the Unemployment Insurance Law in force for those subscribers, subject to exceptions in its later items.

Article 17 of the Implementing Regulation of the Social Insurance Law limits the contributory wage (الأجر الخاضع للاشتراك) to three components:

• the basic wage or salary, with commission, a percentage of sales and a percentage of profits treated as part of it;
• the cash housing allowance, at the value agreed;
• housing provided in kind, valued for contribution purposes at two months of the basic wage or salary.

Other allowances fall outside the base. Article 20 of the Implementing Regulation of the Social Insurance Law adds a further limit: the base is computed before any deduction made from the wage, such as taxes, fees, debts, instalments, administrative penalties or fines, and the months of joining and leaving are prorated by days. Article 18 of the Implementing Regulation of the Social Insurance Law sets a method for a subscriber paid by the day, the daily wage multiplied by thirty; for one paid by the piece, by a percentage of profits, by a percentage of sales volume or by production, the monthly average of what they received for the period actually worked in the previous year; and for a new subscriber, the average wage of a comparable subscriber in the same establishment or a similar one. Because Article 18 of the Implementing Regulation of the Social Insurance Law belongs to the regulation issued under the M/273 law, it does not reach the excluded subscribers described above, and the equivalent rule for them was not in the sources we reviewed. The piece rate case is set out under piece rate pay.

Article 21 of the Implementing Regulation of the Social Insurance Law leaves correction all but closed, and unevenly so: a correction of the contributory wage may not be considered once the period for submitting wage data has passed, with an exception left to the Governor where GOSI itself discovers that wages were understated. GOSI can reopen the file after the deadline; the establishment cannot.

All of this concerns compulsory coverage. For a voluntary contributor, Article 8(1) of the Social Insurance Law leaves the standard on which contributions are calculated to the Implementing Regulation of the Social Insurance Law, and in the sources we reviewed, we did not locate that standard in the text of the Implementing Regulation.

A worked example beside the voluntary contributor: what the first registration date decides

Take a Saudi employee with a basic wage of SAR 8,000 and a cash housing allowance of SAR 2,000. The contributory wage is SAR 10,000 a month, below the monthly ceiling of SAR 45,000, which Article 8 of the Social Insurance Law sets for the M/273 system and which GOSI also gives for the existing system.

• First registered with GOSI before 3 July 2024. The existing system applies. The employee’s share is 9.75%, made up of 9% pensions and 0.75% SANED (unemployment insurance), which is SAR 975. The employer’s share is 11.75%, made up of 9% pensions, 2% occupational hazards and 0.75% SANED, which is SAR 1,175.
• First registered on or after 3 July 2024, with no earlier contribution periods. The system under Royal Decree M/273 applies, and its pensions rate rises in steps. From 1 July 2026 it is 10% on each side, so the employee’s share is 10.75%, which is SAR 1,075, and the employer’s share is 12.75%, which is SAR 1,275.

The difference on the employee’s side is SAR 100 a month for the same wage in the same month, and it has a single cause: the date of first registration. The employer’s side differs by the same SAR 100. Under the new system the pensions rate rises by half a percentage point on each side on 1 July each year until 1 July 2028, so any single figure published without its date goes out of date on a known day. The live rate table is kept under GOSI contributions.

The M/273 law states no figure for the minimum of the contributory wage. Article 8 of the Social Insurance Law refers instead to the minimum wage or salary set by the competent authority. The figure in circulation for that minimum describes the existing system, so it should not be placed beside the new system’s rates.

Both cases are compulsory coverage, and the example should not be read as a calculation for a voluntary contributor. For voluntary subscription, Article 15(2) of the Social Insurance Law sets the pensions contribution at 22% of the contributory wage, borne entirely by the subscriber, and paragraph (3) of Item Three of Council of Ministers Decision No. 1022 applies the same stepped pensions rates to voluntary subscription, again borne in full by the subscriber. Under Article 9(2) of the Social Insurance Law the voluntary subscriber pays the contribution within the deadline set by the Implementing Regulation, and Article 9(3) of the Social Insurance Law applies the late payment fine of 2% for each month or part of a month to the voluntary subscriber as well.

Registration deadlines a voluntary contributor route does not change

Article 6 of the Implementing Regulation of the Social Insurance Law places deadlines on the establishment, and they stand on their own:

• Registering the establishment: within no more than ten days of meeting the conditions for coverage.
• Filing worker data: by the last day of the month in which each worker or employee joins.
• Notifying a change of activity or legal form: within ten days, failing which the employer is responsible for the consequences of not notifying or of notifying late.

For a worker who is not Saudi and who is brought into the Kingdom, the same article takes the date of entry into the Kingdom as the date of joining work, not the date of the contract.

Retroactive registration and the voluntary contributor route

Article 16 of the Implementing Regulation of the Social Insurance Law bars registering any contribution periods retroactively once the deadline has passed. There is a narrow exception in the pensions branch only: of the periods requested, nothing older than the two years before the date of the application is registered, and this is without prejudice to the fines set by Article 59 of the Social Insurance Law.

A missed deadline is not repaired by a later application, and a voluntary route into the system should not be taken as a remedy for it. This is where the practical error lies: an establishment registers an employee late and then assumes that another route can put right what was missed.

Article 6 of the Implementing Regulation of the Social Insurance Law also gives the worker a way forward when the establishment defaults: the worker may submit the data personally, no later than the last day of the month following the month in which that deadline expired. That provision shows the nature of compulsory coverage. It is a right that does not depend on the employer’s consent, not an option that either party can waive.

Before asking about a voluntary contributor’s entitlement

Article 44 of the Implementing Regulation of the Social Insurance Law applies the rest of the law and the regulation to a voluntary contributor where they are consistent with that position, and Article 45 of the Implementing Regulation of the Social Insurance Law sets particular rules: disability or death is treated as occurring in covered work only where the contributions due up to the previous month had already been paid in full, an early pension requires proof of leaving the work on which the subscription was based, and stopping payment does not move the dates on which compensation falls due. The detail of a particular case is a question for GOSI. Reasoning from the rules of compulsory coverage to a different route would be analogy, not text, and a decision built on it would have no basis.

Before any question about an entitlement, the first step is to establish which of the two systems applies to the person, because the date of their first registration with GOSI decides the rules against which they are measured. Explanations in circulation can mix up the two parallel systems, and the overview of social insurance in Saudi Arabia sets them out side by side.

The provisions relied on are those of the Social Insurance Law issued by Royal Decree M/273 of 1445H and its Implementing Regulation, as published in the Umm Al Qura official gazette: Articles 6 (deferred categories), 8 (the ceiling, the minimum by reference and multiple employers), 14, 28 and 43 (the scope of the three branches) and 59 (fines) of the Social Insurance Law; Articles 6 (registration deadlines and the worker’s own filing), 16 (retroactive registration), 17 (the components of the contributory wage), 18 (daily, piece and new subscriber bases), 19 (multiple employers), 20 (gross base and prorated months) and 21 (corrections) of its Implementing Regulation; Articles 8(1), 9(2), 9(3), 14(3) and 15(2) of the Social Insurance Law and Articles 44 and 45 of its Implementing Regulation (voluntary subscription); and Items Two, Three (paragraph 3) and Four of Council of Ministers Decision No. 1022 (the subscribers excluded from the M/273 law, the voluntary pensions rate and the earlier laws kept in force for them). The definition of beneficiary is that of the Unemployment Insurance Law.

This is an explanation of the concept and of the statutory provisions cited, not legal advice.