Understanding the precise answer to the question, “How much is GOSI contribution from salary?” is crucial for every employee and employer in the Kingdom of Saudi Arabia. With rapid economic developments and transformations in social protection systems under Vision 2030, the General Organization for Social Insurance (GOSI) has announced significant updates aimed at enhancing the system’s sustainability and safeguarding the rights of future generations.
In this comprehensive article, we will delve into the details of contribution rates, the differences between the old and new systems, and how to calculate GOSI contributions based on the contributory wage. We will also highlight the tools that can help you manage these processes with ease through the Availo platform.
What is the General Organization for Social Insurance (GOSI)?
Before addressing “How much is GOSI contribution from salary?“, it’s essential to understand the role of the General Organization for Social Insurance. GOSI is a government institution with financial and administrative independence, responsible for implementing the provisions of the Social Insurance Law in the Kingdom. The system primarily aims to provide social protection for employees in both the private and public sectors (who are not subject to the Civil Retirement Law) by disbursing retirement pensions, occupational hazard compensations, and unemployment support.
How Much is GOSI Contribution from Salary for Saudis? (Current System)
For employees who had previous subscription periods before July 3, 2024, the rates remain fixed according to the current system. These rates are distributed across three main branches:
1. Annuities Branch (Pension)
This branch is responsible for securing income for the employee after retirement or in cases of disability and death.
- Employee’s Share: 9% of the contributory wage.
- Employer’s Share: 9% of the contributory wage.
- Total: 18%.
2. Occupational Hazards Branch
This branch covers injuries that an employee may sustain during or due to work, as well as occupational diseases.
- Employee’s Share: 0% (the employee bears no cost).
- Employer’s Share: 2% of the contributory wage.
3. Unemployment Insurance Branch (SANED)
The “SANED” program aims to provide temporary income for Saudi employees who lose their jobs due to circumstances beyond their control.
- Employee’s Share: 0.75% of the contributory wage.
- Employer’s Share: 0.75% of the contributory wage.
- Total: 1.5%.
Based on the above, the total GOSI contribution from salary for a Saudi employee under the current system is 21.5%, with the employee contributing 9.75% and the employer contributing 11.75%.
The New Social Insurance System 2024: What Has Changed?
The Kingdom recently approved a new social insurance system that applies exclusively to “new entrants to the workforce” who have no prior subscription periods before July 3, 2024. If you’re wondering “How much is GOSI contribution from salary?” under this new system, the answer lies in a gradual increase in the Annuities Branch contribution rate.
Gradual Increase Schedule for Annuities Branch Contribution Rate (New Entrants Only)
| Date | Employee’s Share | Employer’s Share | Total Annuities Branch |
|---|---|---|---|
| From July 3, 2024 | 9% | 9% | 18% |
| From July 1, 2025 | 9.5% | 9.5% | 19% |
| From July 1, 2026 | 10% | 10% | 20% |
| From July 1, 2027 | 10.5% | 10.5% | 21% |
| From July 1, 2028 | 11% | 11% | 22% |
Note: The rates for the Occupational Hazards Branch (2% borne by the employer) and the SANED Branch (1.5% equally shared) remain unchanged under the new system. For more official details, you can visit the GOSI FAQ page.
How Much is GOSI Contribution from Salary for Non-Saudis?
For expatriates (non-Saudis) working in the Kingdom, the system differs significantly, as they are not subject to the Annuities Branch or the SANED Branch.
- Occupational Hazards Branch: This is the only branch that applies to non-Saudis.
- Rate: 2% of the contributory wage.
- Who bears it? The employer bears the full cost, and no amount is deducted from the expatriate employee’s salary for social insurance.
What is the “Contributory Wage”? And How is it Calculated?
When asking “How much is GOSI contribution from salary?“, many make the mistake of calculating the percentage from the gross salary. The truth is that the percentage is calculated only from the “contributory wage,” which consists of:
- Basic Salary: The agreed-upon salary in the employment contract before any allowances.
- Housing Allowance: Whether in cash or in-kind (estimated at two months’ salary if in-kind).
- Commissions: If paid monthly and regularly.
Minimum and Maximum Contributory Wages
- Minimum: SAR 1,500 for subscribers to the Annuities Branch.
- Maximum: SAR 45,000. Any salary exceeding this amount will have GOSI calculated based on SAR 45,000 only.
Practical Examples: How to Calculate GOSI Deductions?
Let’s apply what we’ve learned to practically answer “How much is GOSI contribution from salary?“
Example 1: Saudi Employee (Old System)
- Basic Salary: SAR 8,000.
- Housing Allowance: SAR 2,000.
- Total Contributory Wage: SAR 10,000.
- Employee’s Deduction (9.75%): 10,000 ร 0.0975 = SAR 975.
- Employer’s Share (11.75%): 10,000 ร 0.1175 = SAR 1,175.
Example 2: New Saudi Employee (After July 2025)
- Contributory Wage: SAR 10,000.
- New Annuities Rate (9.5%) + SANED Rate (0.75%) = 10.25%.
- Employee’s Deduction: 10,000 ร 0.1025 = SAR 1,025.
Benefits of GOSI Subscription for Employees
Knowing “How much is GOSI contribution from salary?” is not just a calculation of the deducted amount; it’s an investment in your financial security. Here are the main benefits:
- Retirement Pension: Receiving a continuous monthly income after reaching the legal retirement age.
- Disability Pension: Financial protection in case an employee suffers a disability that prevents them from working.
- Death Pension: Ensuring income for the deceased employee’s heirs (family members).
- Occupational Hazard Compensation: Covering medical treatment costs and daily allowances during periods of temporary disability.
- SANED Support: Providing financial liquidity during periods of unemployment to search for a new job.
Availo’s Role in Managing GOSI and Payroll
For companies and employers, tracking changes in GOSI rates, especially with the new system and gradual increases, can be complex and burdensome. This is where the Availo platform comes in, offering advanced technological solutions for human resources and payroll management.
Availo helps you with:
- Full Automation: Automatically calculating GOSI deductions based on the latest regulations and laws.
- Managing Different Categories: Automatically distinguishing between employees subject to the old and new systems.
- Legal Compliance: Ensuring the accuracy of calculations and their conformity with the requirements of the General Organization for Social Insurance and the Wage Protection System (WPS).
- Detailed Reports: Generating payroll statements that accurately show the employee’s share and the establishment’s share, facilitating financial auditing.
By using Availo, you no longer have to worry about constantly asking “How much is GOSI contribution from salary?” for each employee, as the system handles all complex calculations with extreme precision.
Key FAQs About GOSI Contribution Rates
Does the GOSI contribution percentage change if the salary increases?
The percentage remains constant (according to the system you follow), but the monetary amount deducted increases with the increase in the contributory wage, up to the maximum limit (SAR 45,000).
Are GOSI contributions deducted from other allowances like transportation allowance?
No, the social insurance system in the Kingdom currently only applies to the basic salary, housing allowance, and commissions. Other allowances such as transportation allowance, overtime allowance, or technical allowances are not included in the contributory wage.
What happens if the employer does not register an employee?
This is a clear violation of the system, and the employee has the right to file a complaint through the official GOSI channels. Financial penalties are also imposed on non-compliant establishments, in addition to obliging them to pay all due contributions for the previous period with late payment penalties.
Conclusion
In conclusion, the answer to “How much is GOSI contribution from salary?” depends on your employment start date and nationality. For Saudis under the old system, the deducted percentage from their salary is 9.75%, while this percentage gradually increases for new entrants to reach 11.75% by 2028. As for expatriates, no amounts are deducted from their salaries for social insurance, as the employer bears only 2% for the Occupational Hazards Branch.
Understanding and adhering to these rates ensures the stability of the establishment and protects employees’ rights. If you are looking for an easy and reliable way to manage your employees’ payroll and accurately calculate their GOSI contributions, the Availo platform is your ideal partner in this journey.
Do not hesitate to visit the official website of the General Organization for Social Insurance for the latest updates, and always make sure to review your payslip to verify the accuracy of deductions.