The Two Parallel Systems at GOSI: What Decides Which Applies, and the Step Table

Contribution rates at the General Organization for Social Insurance (GOSI) in Saudi Arabia are not a single rate. Since Royal Decree M/273 was issued and took effect on 3 July 2024, there have been two parallel systems, and what decides which one applies to a particular employee is the date of their first registration with GOSI.

Under the new system the rate does not stay fixed: it rises on the first of July each year through to 2028. So any single figure written into an internal document carries an expiry date.

1. Which system applies?

The criterion is when the employee was first registered with GOSI:

• Before 3 July 2024: the existing system applies to them.
• After the new system took effect: it covers civil new entrants in both sectors who have no prior contribution periods before it took effect. The M/273 system applies to them.

So the criterion is not the date of joining the current establishment, but the date of first registration with GOSI. An employee who moved to you this month may be subject to the existing system because their first registration predates July 2024.

2. The existing system: those registered before 3 July 2024

Rates under this system are distributed across three branches:

• The pensions branch: 9% on the employee, and 9% on the employer.
• Occupational hazards: 2% on the employer, and nothing on the employee.
• SANED unemployment insurance: 0.75% on each side.

So the total: 9.75% on the employee, 11.75% on the employer, and 21.5% combined.

Note that the difference between the two figures is not in the pensions branch nor in SANED, since those are equal on both sides, but in occupational hazards alone: 2% on the employer and nothing on the employee. That is the source of the 2% gap between 9.75% and 11.75%.

So reading the combined rate alone conceals the structure of the contribution. The three branches are not an arithmetical split, but three different purposes: pensions, coverage against occupational hazards, and insurance against unemployment.

3. The new system: stepped rates with dates

Under the M/273 system, the rate for the pensions branch alone rises by 0.5% on each side per year, from the second year to the fifth:

• 3 July 2024: 9% on the subscriber, and 9% on the employer.
• 1 July 2025: 9.5% and 9.5%.
• 1 July 2026: 10% and 10%. This is the rate in force now.
• 1 July 2027: 10.5% and 10.5%.
• 1 July 2028: 11% and 11%.

Note that the date the system took effect is 3 July 2024, while every increase after it falls on the first of July.

SANED at 0.75% on each side, and occupational hazards at 2% on the employer, sit on top of that and do not step.

4. The rates in force today

On the basis of the table above, the rates in force under the new system now are:

• Employee: 10.75%, being 10% pensions and 0.75% SANED.
• Employer: 12.75%, being 10% pensions, 2% occupational hazards and 0.75% SANED.

5. A caution: 10.75% is not the pensions rate

A number of sources circulate the figure 10.75% as “the pensions contribution rate”. The figure is arithmetically real, but it is the employee total, not the rate of the pensions branch.

The pensions rate today is 10%, and the difference between the two figures is the 0.75% SANED share.

This kind of error is hard to detect because it does not show up in the total: someone computing with 10.75% as the employee total arrives at the correct figure, and someone using it as the pensions rate gets the distribution across the branches wrong.

The source of the confusion is that the two figures resemble each other in one respect: both are “a rate on the employee”. The difference is that one is a branch rate and the other is the sum of two branches. So verifying a figure quoted from an unofficial source is not done by comparing it with the total, but by asking: this figure is the rate of which branch?

This matter alone is sufficient reason to go back to an official source every time, rather than to pages that copy figures from one another.

6. Why fixing a single rate is not sound

A document that writes a single rate with no date becomes wrong on a date known in advance: the first of July of each year through to 2028.

The sound course is to publish the dated table rather than the figure. The table stays correct after every increase; a single figure does not.

This applies to internal policies, contract templates and benefit summaries just as it applies to published pages.

The difference between the two documents is that the first needs an annual review and gives no warning that it needs one, while the second carries its date with it. The dated table tells the reader when what they are holding becomes out of date; a single figure says nothing.

Added to that, an establishment operating under both systems needs two tables, not one: fixed rates for one group, and stepped rates for another.

7. Non-Saudi workers

Under the existing system, the employer pays 2% occupational hazards only for a non-Saudi worker. This is not social insurance, there is no SANED contribution, and nothing is deducted from the employee.

As for the position of non-Saudis under the M/273 system, this guide has not established it in any published source, so it is not sound to assert it nor to infer it; refer to GOSI on that.

This place deserves a pause, because it is one of those places where inference is easy and verification is hard: any reader can build an argument that looks coherent on the structure of the branches, and then write it into an internal policy as a rule. But a coherent argument is not a source.

8. What this guide does not address

• Whether M/273 changed the contribution wage or its upper limit. No source says so, and the official guide confines the increase to the pensions branch. Even so, the absence of evidence of a change is not evidence that there was none, so it is not sound to publish the upper limit alongside the new system’s rates. Refer to GOSI on that.
• The position of non-Saudis under the new system, as set out above.
• Exceptional cases and the rules on registration and moving between the systems. Refer to GOSI on these.
• Fines and penalties connected with late payment or registration. It is not sound to state a figure; refer to the competent authority on that.

9. What your system should record

• The date of first registration with GOSI for every employee, because it is what decides which of the two systems applies to them.
• The system applied to each employee expressly, not inferred from the date they joined the establishment.
• The rate applied and its effective date, because the new system’s rate changes on the first of July.
• The distribution of the contribution across the branches: pensions, occupational hazards and SANED, because the error is in the distribution rather than in the total.
• The employee’s nationality, because the treatment of non-Saudis under the existing system is different.
• The date the rates were last updated in the system in use.

10. A checklist before every first of July

• Does the system distinguish between employees subject to the existing system and those subject to the M/273 system?
• Is the distinction built on the date of first registration with GOSI rather than on the date of joining the establishment?
• Has the pensions rate under the new system been updated to the rate in force for this year?
• Have SANED and occupational hazards stayed at their rates without stepping?
• Is the 10.75% rate treated in any document as the pensions rate?
• Do the internal policies carry a dated table or a single figure?

11. Why this turns into a problem

This matter brings together two properties that rarely meet: the rate changes on a date known in advance, and not all employees are subject to the same rate. So the establishment needs to control a moving figure, and to distribute its employees across two systems at the same time.

All that is needed for that is two recorded facts for every employee: the date of their first registration with GOSI, and the rate applied to them and its date. Where the first is missing, classifying the employee becomes a judgement call; where the second is missing, there is no knowing when the update fell behind.

Note that a system applies the rate configured in it, not a rate it infers from the date. So updating the rate at each due point remains a step taken by the person responsible, and the responsibility for verifying that the configured rate is correct stays with the establishment.

This is where it pays to have an employee’s facts in a single file. That is what Qoyod HR provides: a single employee file holding the contract, the documents and their expiry dates with an alert before them, an attendance record for each employee, and their leave, salary and end-of-service entitlements. End-of-service, overtime and leave-balance calculations are built into the system. It is a standalone HR system with its own subscription, and the link with Qoyod accounting is available now.

For the contribution wage these rates are applied to, see The contribution wage at GOSI.

For more guides and templates, browse the HR Resource Centre.

Frequently asked questions

What is the GOSI contribution rate in Saudi Arabia?

The rate differs according to the system applied to the employee. Under the existing system, which is for anyone registered before 3 July 2024: 9.75% on the employee and 11.75% on the employer. Under the M/273 system for new entrants, the rate in force since 1 July 2026 is 10.75% on the employee and 12.75% on the employer, and the pensions rate rises by 0.5% on each side on the first of July through to 2028.

What decides which system applies to an employee?

The date of their first registration with GOSI, not the date they joined the current establishment. Anyone registered before 3 July 2024 is subject to the existing system, and the M/273 system applies to civil new entrants in both sectors who have no contribution periods before it took effect.

What is the pensions rate in force now?

Under the M/273 system, the pensions rate since 1 July 2026 is 10% on the subscriber and 10% on the employer. It rises to 10.5% on 1 July 2027, and to 11% on 1 July 2028.

Is 10.75% the pensions contribution rate?

No. It is the total on the employee under the new system today: 10% pensions and 0.75% SANED. The pensions rate on its own is 10%.

How much does the employer pay for a non-Saudi employee?

Under the existing system, the employer pays 2% occupational hazards only, there is no SANED contribution, and nothing is deducted from the employee. As for the position of non-Saudis under the M/273 system, this guide has not established it in any published source; refer to GOSI on that.

May a single rate be fixed in an internal policy?

The new system’s rate rises on the first of July each year through to 2028, so a single figure becomes wrong on a date known in advance. The better course is to publish the dated table rather than the figure.

References

This guide is based on official GOSI sources regarding the new system’s rates and its step table, and on international tax summaries regarding the existing system’s rates and the treatment of non-Saudis.

The rates in this guide are written on the basis of what is in force in September 2026. The pensions rate under the M/273 system is due to rise on 1 July 2027 and 1 July 2028, so at each due point refer to what GOSI publishes.

This guide is a regulatory explanation, not legal or accounting advice. In a particular case, GOSI remains the reference.