GOSI contributions after the July 2024 Social Insurance Law: rates, new entrants and who pays what

Two regimes, one payroll

The new Social Insurance Law was issued by Royal Decree No. M/273 and Council of Ministers Resolution No. 1022, both dated 26/12/1445H, and took effect on 3 July 2024. GOSI's guide for employers states who it covers: people joining the labour market who had no contribution periods under the Civil Retirement or Social Insurance systems before that date, whether they now work in the civil public sector or in the private sector.

Everyone else stays under the existing rules. GOSI's awareness platform adds that some existing contributors are affected by the new retirement age provisions, but that is a pension question; for payroll the point is that their contribution rates do not step up.

So a Saudi company hiring in 2026 can easily have three kinds of employees on the same payroll: Saudis insured before July 2024, Saudis who entered the system after that date, and non-Saudis. Each needs its own rate.

How to tell whether an employee is a new entrant

Do not guess from the hiring date. A Saudi who joins your company in 2026 but worked elsewhere in 2022 already has contribution periods, so the old rates apply. GOSI's employer guide explains that the establishment account on the GOSI website and app shows which contributors fall under the new system: open the contributor list and filter by system. Hovering over the coverage type shows the rates and amounts deducted from employer and employee.

The pension step-up schedule

The step-up applies to the annuities (pension) branch only. It starts in the law's second year and runs to its fifth, 0.5% per year, for a total increase of 2%. This is GOSI's own table:

The end state matches the law text as published: a pension contribution of 22% of the contribution wage, 11% borne by the employer and 11% by the contributor.

Who pays what in 2026

The pension branch is only part of the bill. Two other branches apply:

• Occupational hazards: 2% of the contribution wage, paid by the employer, for all workers regardless of nationality (GOSI FAQ).
• SANED unemployment insurance: mandatory for Saudi nationals registered in the pension branch (GOSI FAQ). GOSI cut the rate from 2% to 1.5% from 1 January 2022, split equally: 0.75% employee and 0.75% employer (as reported at the time of the decision).

Putting the branches together, as of today (the rate that applies from 1 July 2026):

Non-Saudi employees are not in the pension or SANED branches in GOSI's standard setup; payroll guides and GOSI's FAQ agree that only the employer's 2% hazards contribution applies. GCC nationals working in the Kingdom are a separate case, handled under the GCC insurance protection extension with rules linked to their home country's fund. Check those with GOSI rather than applying either row above.

What the contribution wage is

Rates are applied to the contribution wage, not to the full package. According to the executive regulations published in July 2024, as reported in the Saudi press, the elements subject to contributions are:

• the basic wage, including commissions and percentages of sales or profits;
• a cash housing allowance, at the value agreed between employer and employee;
• housing provided in kind, valued at two months of basic wage.

Transport, phone and other allowances are not in that list. The maximum monthly contribution wage is SAR 45,000, and for someone with several employers the combined wage across all of them may not exceed that amount. On the minimum, GOSI's FAQ gives SAR 1,500 for the annuities branch and SAR 400 for occupational hazards; the new law says contributions may not be calculated on less than the minimum wage set by the competent authorities. We could not find an official document confirming a new figure, so confirm the current minimum with GOSI if an employee earns close to it.

A worked example

A Saudi employee with a basic wage of SAR 10,000 and a cash housing allowance of SAR 2,500, plus SAR 800 transport. The contribution wage is 10,000 + 2,500 = SAR 12,500; transport is left out.

A new entrant with a basic wage of SAR 50,000 would be capped at SAR 45,000, so the employee deduction is 10.75% of 45,000, which is SAR 4,837.50. You can run your own figures in the GOSI calculator.

What changes in your payroll each July

• Tag every Saudi employee with the regime GOSI shows for them, not with a guess based on hiring date.
• Update the rate on 1 July. GOSI's table uses 1 July dates. Payroll providers disagree on whether the first affected contribution is July or the month after, because GOSI bills monthly; compare your first July invoice with your payroll and adjust once.
• Tell affected employees. Their net pay drops by 0.5% of the contribution wage each July until 2028. A short note avoids questions on payday.
• Keep registration current. GOSI's FAQ says worker data is due within the first fifteen days of the month following the first month for which contributions are payable. A wage change not reported to GOSI also causes mismatches in the wage protection file; see our Mudad and WPS guide.
• Pay on time. GOSI's employer guide says that under the new law, when unpaid contribution periods reach six months, the contributor's coverage and contribution periods are suspended; reactivated periods must then be paid within two months.

If your contracts use Hijri dates, remember that the rate change follows the Gregorian 1 July; the Hijri date converter helps when a contract says otherwise.

Where HR FLARE fits

HR FLARE calculates GOSI contributions as part of the payroll run and produces the Saudi WPS payroll file for your bank. The interface works in Arabic or English, with Hijri dates beside Gregorian ones. It is free for up to 5 employees; larger teams can check pricing. For an overview of the product start at the home page.