How to Work Out the Saudi GOSI Employer Contribution

The direct answer: which employer rate applies

Saudi Arabia runs two GOSI schedules side by side. Which one applies depends on the employee's nationality and the date of first GOSI registration, not on the job title or the salary level.

For a Saudi national who was already contributing before 3 July 2024, the employer rate is 11.75 percent. That figure is made up of 9 percent for the annuities (pension) branch, 2 percent for occupational hazards and 0.75 percent for SANED, the unemployment insurance branch. The employee pays 9.75 percent, which is 9 percent for the pension and 0.75 percent for SANED. Several payroll guides describe the same split, and the GOSI tables show the same breakdown.

For a Saudi national who first registered on or after 3 July 2024, the new schedule applies. Its employer rate stepped from 12.25 percent to 12.75 percent on 1 July 2026. The 12.75 percent figure is made up of a 10 percent pension share, 0.75 percent for SANED and 2 percent for occupational hazards. The employee share from July 2026 is 10.75 percent. The step-up came from the Social Insurance Law, issued by Royal Decree No. M/273 in July 2024, which raises the pension share by half a point each side every 1 July until it reaches 11 percent. Some guidance describes the new system as operational from 3 July 2025, while the first step in the pension schedule is dated 1 July 2025. Payroll teams should treat 1 July 2025 as the first step date and check the exact dates on the GOSI site.

For an expatriate employee, the employer pays 2 percent for occupational hazards. Expatriates do not pay GOSI from their own salary, and they are not enrolled in the pension or SANED branches. In plain terms, the employer's GOSI cost for an expatriate is a small fixed percentage of the contributory wage.

This explains the rule in general terms; it is not legal or tax advice for your case.

How the figure is worked out, step by step

1. Confirm the employee's group. Saudi national first registered before 3 July 2024, Saudi new entrant registered on or after that date, or expatriate. Use the GOSI registration record, not the job offer letter.
2. Build the contributory wage. Add the basic salary and the housing allowance. If housing is provided by the employer instead of paid in cash, sources describe valuing it at two months of basic wage, so check how your contract and GOSI records treat it.
3. Remove the items that sit outside the base. Transport, phone and most other fixed allowances are generally excluded. Overtime is generally excluded. Commissions are described differently across sources, so this item needs a check (see the mistakes section below).
4. Apply the cap. If the wage is above SAR 45,000 a month, use SAR 45,000 as the base. Anything above the cap does not add to the GOSI figure.
5. Multiply the base by the rate for the group. Use 11.75 percent for an existing Saudi, 12.75 percent for a new-entrant Saudi from July 2026, and 2 percent for an expatriate. The employee share is calculated separately, at 9.75 percent for an existing Saudi and 10.75 percent for a new entrant from July 2026.
6. Add the employer share to your payroll cost, and record the employee share as a deduction from pay for Saudi nationals only.

One worked example with real numbers

Take three employees, each with SAR 2,000 of transport allowance that falls outside the base. The first is a Saudi national registered in 2019 with a basic salary of SAR 8,000 and housing of SAR 2,000. Her contributory wage is SAR 10,000. Her employer share at 11.75 percent is SAR 1,175. Her employee deduction at 9.75 percent is SAR 975. Of the employer amount, SAR 900 goes to the pension share, SAR 200 to occupational hazards and SAR 75 to SANED.

The second is a Saudi national who first registered in August 2025, with the same SAR 10,000 contributory wage. From 1 July 2026 the employer share is 12.75 percent, which is SAR 1,275. The employee share is 10.75 percent, which is SAR 1,075. The difference against the older schedule is SAR 100 for the employer and SAR 100 for the employee each month.

The third is an expatriate with the same SAR 10,000 contributory wage. The employer pays 2 percent, which is SAR 200. The employee pays nothing to GOSI.

The same logic applies at the top of the pay range. Suppose a Saudi new entrant has a basic salary of SAR 40,000 and housing of SAR 15,000. The total of SAR 55,000 is above the cap, so the base is SAR 45,000. The employer share at 12.75 percent is SAR 5,737.50, and the employee share at 10.75 percent is SAR 4,837.50. The base would be wrong if payroll used the full SAR 55,000.

The cases that change the answer

Resignation does not change the GOSI percentages. GOSI contributions are calculated on the monthly wage whether the employee leaves or stays. Resignation does matter for the end-of-service award, which is a separate payment. Under the Saudi Labor Law, an employee who resigns usually receives a reduced share of the award. Nothing is due for less than two years of service, one third is due from two to five years, two thirds from five to under ten years, and the full amount from ten years. The employer pays the full award when it ends the contract. These rules come from Articles 84 and 85 of the Labor Law, and the official text is available through the Ministry of Human Resources and Social Development. Payroll should not mix the GOSI amount with the end-of-service accrual.

Contract type does not appear to change the GOSI rate. The rates in the sources used here depend on nationality and registration date. Fixed-term and open-ended contracts are not split into separate GOSI rates in those sources, but this should be confirmed against the GOSI site for each contract category you use.

Minimum service matters for pension entitlement, not for the monthly contribution. The GOSI contributor FAQ states that a retirement pension requires at least 120 contribution months for the relevant conditions, and that a contributor who has fewer months may be able to buy back credit up to a limit. A short-serving employee still pays the contribution in each month of employment. The FAQ page is an older GOSI page, so check its current wording before you advise an employee on entitlement.

Caps change the answer for senior staff. The SAR 45,000 monthly ceiling applies to the contributory wage. Any basic salary and housing above that line does not increase GOSI. This can lower the employer cost for senior roles, and it also limits the pension base for the employee.

Exclusions change the answer for variable pay. Transport, most fixed allowances and overtime are generally left out of the base. Commissions are the point where the sources disagree. One guide states that commissions and sales or profit percentages count as wage under the new system. Other calculators and summaries exclude commissions and bonuses. Until the GOSI site confirms the treatment for your payroll type, do not assume either way.

Common mistakes

• Applying 11.75 percent to every Saudi employee. New entrants registered from 3 July 2024 follow a different schedule, and from 1 July 2026 the employer rate is 12.75 percent.
• Calculating GOSI on gross pay. The base is basic salary plus housing, so transport and other allowances can overstate the figure.
• Ignoring the cap. A salary of SAR 55,000 in basic and housing does not produce a GOSI base of SAR 55,000.
• Treating expatriates as zero cost. The employer still pays 2 percent for occupational hazards.
• Using a single flat rate for the whole company. Two Saudi groups and one expatriate group need separate rate tables.
• Confusing GOSI with end-of-service pay. GOSI is a monthly social insurance contribution. The end-of-service award is a separate obligation that is paid on the end of employment.

A common error that is easy to miss is applying the new 1 July 2026 rate to a whole payroll run in one step, when the employee's first registration date has not been checked. Each employee needs a flag from the GOSI record before the rate is applied.

What to check with HR or a lawyer

Start with the GOSI record for each employee. Confirm nationality, the first GOSI registration date and the schedule flagged on the record. Compare these with your payroll system's employee groups, because a mismatch is the most common source of a wrong GOSI figure.

Next, confirm the contributory wage definition for each allowance you pay. Ask HR which items are fixed, which are variable, and which are paid in kind. Housing paid by the employer and commission-based pay need a written decision that matches the GOSI guidance on the site.

Check the official rate tables on gosi.gov.sa before each payroll run, especially around 1 July each year, when the new-entrant pension schedule steps up. Keep a copy of the rate table used for each month.

Where the employer plans a change to pay, hours or roles that affects GOSI or end-of-service entitlements, the Saudi notice, consultation and severance rules apply. Any such change should be agreed with the employee or checked with a lawyer before it takes effect.

How employers take routine HR and payroll checks off their staff

The GOSI check is repetitive work. Someone must match each employee to the right schedule, rebuild the contributory wage from the payroll export, apply the cap and compare the result with the GOSI statement. Employers who want that routine work done by a system can use AI workers to do the matching and flag any variance for a payroll lead, who approves the figures and files them.