Social insurance in Saudi Arabia: a complete guide for companies

Social insurance is one of the most important systems in Saudi Arabia for protecting the rights of citizens and residents. It is more than a monthly deduction from salary: it is a safety net that gives contributors a stable income in retirement, or after an injury, disability or death. As more services move online, contributors can now manage their contributions and benefits electronically, which makes understanding social insurance an essential step for anyone working in the public or private sector.

What is social insurance in Saudi Arabia, and what does it mean for companies?

Social insurance in Saudi Arabia is a government scheme run by the General Organization for Social Insurance (GOSI). It protects workers and their families through several types of cover, including retirement, disability, death, work injuries and occupational hazards, as well as unemployment insurance. It covers people working in both the public and private sectors under mandatory laws and implementing regulations. For companies in Saudi Arabia, its main objectives are:

• Financial protection for Saudi workers when they retire, become disabled or die, so that they and their families can live in dignity.
• Financial compensation and medical care for work injuries and occupational diseases that employees may suffer while doing their jobs.
• Support for Saudi workers who lose their jobs for reasons beyond their control, through financial compensation and the rehabilitation and training they need to return to the labour market.
• Safer workplaces, by working with employers to apply occupational health and safety practices that reduce the risk of injury.
• A contribution system that companies must pay into for their employees: part of the contribution is deducted from the employee's salary and part is paid by the employer.

The difference between public and private sector social insurance

According to GOSI, the new Social Insurance Law (1445 AH), in force since 3 July 2024, is a single unified scheme for everyone working in the civil public sector and the private sector who had no contribution periods under the civil retirement or social insurance schemes before that date. Those with earlier contribution periods are not covered by the new law. This guide focuses on what matters to private sector companies.

What contribution rates do the company and the employee pay?

GOSI contribution rates in Saudi Arabia depend on the employee's category: whether they fall under the new Social Insurance Law or the previous law, and whether they are Saudi or non-Saudi. Rates are calculated on the contributory wage, which according to GOSI is the basic salary plus housing allowance, up to a maximum of SAR 45,000 a month.

Contribution rates for Saudi employees under the new law

The new Social Insurance Law applies to new entrants to the workforce with no contribution periods before 3 July 2024. The rates that have applied to them since 1 July 2026 are:

• Annuities (pension) branch: 10% paid by the employee and 10% by the employer.
• Unemployment insurance (SANED): 0.75% paid by the employee and 0.75% by the employer.
• Occupational hazards branch: 2%, paid by the employer alone.
• Total contributions: 10.75% paid by the employee and 12.75% by the company.

GOSI states that the annuities branch rate for this group rises gradually by 0.5% a year from the second year of the law to the fifth, reaching 11% instead of 9% for both the employee and the employer. The first increase took effect on 1 July 2025. The rate is therefore 9.5% from July 2025, 10% from July 2026, 10.5% from July 2027 and 11% from July 2028.

Contribution rates for Saudi employees under the previous law

If an employee had contribution periods before 3 July 2024, their rates, according to the FAQ on the GOSI website, remain as follows:

• Annuities branch: 9% paid by the employee and 9% by the employer.
• Unemployment insurance (SANED): 0.75% paid by the employee and 0.75% by the employer.
• Occupational hazards branch: 2%, paid by the employer alone.
• Total contributions: 9.75% paid by the employee and 11.75% by the company.

Contribution rates for non-Saudi employees

• According to GOSI, cover for a non-Saudi contributor is limited to the occupational hazards branch, at 2% paid entirely by the employer. Nothing is deducted from the employee's salary.
• Women contributing to the occupational hazards branch, Saudi and non-Saudi alike, receive the maternity benefit that GOSI pays under the new law, provided they meet its conditions.

To work out the deduction and the company’s share on a given salary at any month’s rates, use the GOSI calculator.

Notes

• Before registering an employee, the employer can find out whether they fall under the new law from the contributor's statement of contribution periods and wages. For an employee already registered, the deduction rates appear in the employee's file or in the detailed invoice.
• According to the FAQ on the GOSI website, the occupational hazards rate can be raised to a maximum of double (4%) for an employer that does not follow the instructions on workers' health and safety.

Read more: HR manager responsibilities in companies and their role in meeting company goals

The challenges small and medium companies face with social insurance

Small and medium companies in Saudi Arabia face several challenges with the social insurance system. The main ones are:

High financial cost

Annual increases in contribution rates add to the financial burden on small and medium companies, which affects their competitiveness and profit margins, especially in the early stages of growth.

Administrative and regulatory complexity

Companies have to follow contribution procedures and comply closely with General Organization for Social Insurance (GOSI) regulations. That adds cost and time to managing HR and finance properly.

Keeping up with frequent changes

Periodic changes to contribution rates and reporting requirements need constant monitoring, and internal governance has to be updated to match new rules, which can stretch a small administrative team.

Competitive pressure

The cost of social insurance can push some small companies to cut benefits or hire fewer people, which leaves them weaker against large companies with deeper pockets.

The need for awareness and support

Too little awareness of social insurance rules, and of why compliance matters, can lead to violations and penalties. Small and medium companies need dedicated support and awareness programmes.

See also: HR manager responsibilities in companies and their role in meeting company goals

Why electronic integration makes accounting easier

Electronic integration between companies and social insurance in Saudi Arabia plays an important part in simplifying accounting and administration for companies. Its benefits include:

• Salary data, contributions and changes are updated automatically, which reduces manual procedures and improves efficiency.
• Automatic synchronisation reduces the errors that come from manual data entry or manual overlap between systems.
• It improves the accuracy of accounting data and financial reports, which supports better decisions.
• Changes are easier to manage: through integration, any change to employee salaries or GOSI contributions can be applied automatically, which keeps records organised and reduces errors.
• It makes compliance with laws and regulations easier, because every transaction is documented automatically, which simplifies audits and follow-up.

Read more: how to calculate annual leave pay for employees in Saudi Arabia

How does an automated system reduce errors in GOSI deductions?

An electronic system for GOSI deductions reduces errors by running each step precisely and updating data automatically, which makes deductions and registrations more accurate. It does this through:

Automatic deduction

The system calculates the deduction from each salary automatically, which limits the chance of manual error and relies on accurate, current data.

Automatic data updates

Employee and salary details are updated regularly, so errors in entered or edited data are less likely.

Accurate rate calculation

Electronic systems use precise calculations to work out GOSI deductions from salary, based on the contributory wage (basic salary plus housing allowance) and taking into account the maximum contributory wage of SAR 45,000 a month.

Integration with payroll

The system calculates the GOSI deduction inside the payroll register itself, which removes the need to enter the same data twice and makes the result more accurate.

Reports and follow-up

The Saudi social insurance system provides real-time reports on contributions, which makes regulatory audits easier and improves transparency.

Contact the Dawmt team

How Dawmt handles GOSI calculations for your company

Dawmt's HR system helps companies reduce accounting errors related to social insurance in Saudi Arabia in several ways:

• Dawmt calculates GOSI contributions within the payroll register, so you no longer have to work them out by hand for each employee every month.
• Dawmt calculates GOSI deductions from employees' salaries, leave and personal details, according to the payroll settings in the system.
• The system provides reports that help HR review contributions and statements and confirm they are correct before they are submitted to GOSI.
• The system reduces duplicate data and keeps records up to date with employee changes, which improves the quality of the financial data related to social insurance.

Conclusion

Social insurance in Saudi Arabia shows how much job security and financial stability matter to employees. To manage your employees and their social insurance records effectively, contact the Dawmt team.

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Sources

• GOSI awareness platform: the employer journey under the new Social Insurance Law (1445 AH) (in Arabic)
• GOSI: frequently asked questions for employers (in Arabic)
• GOSI: frequently asked questions for contributors (in Arabic)

Rates reviewed in October 2026. Rates can change, so check the GOSI website before relying on them.