GOSI Contribution Rates Saudi Arabia 2024-2028

What is changing in GOSI contribution rates

Saudi Arabia's General Organization for Social Insurance is phasing in higher pension contributions for Saudi employees between 2024 and 2028, but only for those with no GOSI contribution history before 3 July 2024, while Saudi employees already contributing before that date stay on the older, unchanged rates. It matters for payroll because two Saudi employees doing exactly the same job, hired only a few years apart, can legally sit on two different GOSI percentages for years to come.

The change comes from the New Social Insurance Law, Royal Decree M/273, which took effect on 3 July 2024. It does not touch how expatriate employees are treated, and it does not touch every part of the contribution, only the Annuities and Pension component moves; the rest stays fixed throughout the phase-in.

For an employer, this is not a one-off update to make and forget. Every July from 2024 through 2028 moves the new system's rate again, so a business with a growing share of newly registered Saudi employees sees its payroll cost drift upward each year even if headcount and salaries stay flat, purely from the phase-in itself.

The old system: fixed rates for existing contributors

A Saudi employee with a GOSI contribution history that started before 3 July 2024 stays on the old system's rates for as long as that employment continues, and those rates do not change under the phase-in. The employee pays 9.75%, made up of 9% Annuities and Pension plus 0.75% SANED unemployment insurance. The employer pays 11.75%, made up of the same 9% Annuities and Pension plus 2% Occupational Hazards plus 0.75% SANED.

Combined, the old system runs at 21.5% of contributable wage, split 9.75% employee and 11.75% employer, and that combined figure is what a payroll system should still be calculating today for every Saudi employee who was already registered with GOSI before the July 2024 cut-off.

The old system is not a temporary grandfathering arrangement due to expire; nothing in the New Social Insurance Law sets a date for existing contributors to move onto the new schedule. An employee who qualifies for the old system on 3 July 2024 stays on the fixed 21.5% for as long as their GOSI history continues under it, which for most employees means their entire working life covered by this employer relationship.

The new system: the 2024-2028 phased schedule

A Saudi employee with no GOSI contribution history before 3 July 2024, meaning this is effectively their first GOSI-registered job, is on the new system, and only the Annuities and Pension component of their contribution rises, by 0.5 percentage points on each side, every July, for five years. SANED stays fixed at 0.75% employer and 0.75% employee throughout, and Occupational Hazards stays fixed at 2% employer, exactly as in the old system.

• 2024 baseline: employee 9.75%, employer 11.75%, combined 21.5%.
• From July 2025: employee 10.25%, employer 12.25%, combined 22.5%.
• From July 2026 (current tier as of September 2026): employee 10.75%, employer 12.75%, combined 23.5%.
• From July 2027: employee 11.25%, employer 13.25%, combined 24.5%.
• From July 2028 (final tier): employee 11.75%, employer 13.75%, combined 25.5%.

Where the extra percentage points actually go

Because only the Annuities and Pension branch phases in, the pension-only portion is the clearest way to see the change: it rises from 9% each side in 2024 to 10% each side by July 2026, and reaches 11% each side by the final July 2028 step, a cumulative two-percentage-point rise on each side over five years. SANED and Occupational Hazards are simply added on top of whatever the current pension figure is, unchanged throughout.

This distinction matters for anyone reconciling GOSI invoices against payroll: a jump in the combined rate from one July to the next is entirely a pension change, not a change to unemployment insurance or occupational hazards cover, both of which stay exactly where they started.

Expatriate employees: a different, simpler rule

Non-Saudi employees are not part of either the old or the new Annuities and Pension system at all. An expatriate employee has no employee-side GOSI deduction, no employer-side Annuities and Pension contribution, and no SANED unemployment coverage. The only GOSI contribution on an expatriate employee is an employer-only 2% of contributable wage for Occupational Hazards, the same rate that applies to the Occupational Hazards portion for Saudi employees.

This makes GOSI a materially cheaper line item for an expatriate hire than for a Saudi hire on the same contributable wage, and it is a common source of payroll error when a business copies its Saudi-employee GOSI formula across to an expatriate record without changing it. The gap is not small: on a SAR 15,000 contributable wage, GOSI on a Saudi old-system employee costs the employer SAR 1,762.50 while the same wage on an expatriate employee costs only SAR 300, a difference that shows up in staffing cost comparisons whether or not it is the deciding factor in a hiring decision.

Contributable wage and the monthly cap

GOSI is calculated on contributable wage, defined as basic salary plus housing allowance, and specifically excluding transport allowance, phone allowance, commission and bonus. Whatever the contributable wage works out to, it is capped at a monthly ceiling of SAR 45,000; any amount above that ceiling is simply not subject to GOSI at all, for either the employee or the employer.

A senior employee with a basic salary and housing allowance adding up to SAR 50,000 a month still has GOSI calculated on only SAR 45,000, the ceiling, not the full SAR 50,000. On the old system that caps the employer contribution at 11.75% of SAR 45,000, SAR 5,287.50, however much higher the employee's actual pay runs. The same ceiling applies on the new system, at whichever percentage that employee's phase-in year sets, so the ceiling itself does not change between the old and new schedules, only the rate applied up to it.

Worked example: one payroll, three GOSI outcomes

Al Noor Trading, a Riyadh-based trading business, runs its August 2026 payroll, after the July 2026 rate step, with three Saudi and expatriate employees on different GOSI treatments.

Employee A is Saudi, registered with GOSI since 2019, so stays on the old system's fixed 9.75%/11.75%. Contributable wage is SAR 8,000 basic plus SAR 2,000 housing, SAR 10,000 total. Employee B is Saudi, first registered with GOSI in January 2025, so is on the new system, currently at the July 2026 tier of 10.75%/12.75%. Contributable wage is SAR 6,000 basic plus SAR 1,500 housing, SAR 7,500 total. Employee C is an expatriate on SAR 12,000 basic plus SAR 3,000 housing, SAR 15,000 total, contributing only the employer's 2% Occupational Hazards charge.

• Employee A (old system): employee 9.75% x 10,000 = SAR 975.00; employer 11.75% x 10,000 = SAR 1,175.00.
• Employee B (new system, July 2026 tier): employee 10.75% x 7,500 = SAR 806.25; employer 12.75% x 7,500 = SAR 956.25.
• Employee C (expatriate): employee SAR 0; employer 2% x 15,000 = SAR 300.00.
• Total employee GOSI deductions across the three: SAR 975.00 + 806.25 + 0 = SAR 1,781.25.
• Total employer GOSI cost across the three: SAR 1,175.00 + 956.25 + 300.00 = SAR 2,431.25.

How payroll software should model the schedule

A payroll system handling Saudi GOSI correctly through 2028 needs to know, per employee, which system they are on, which depends on their own registration history rather than their job title or department, and it needs the current phase date, since the new system's rate changes automatically every July regardless of anything else about the employee. Getting either of those wrong understates or overstates the deduction on every payslip until it is caught.

The safest design keeps the two facts separate: a one-time flag for old system versus new system, set once from the employee's actual GOSI history, and a rate table keyed to the calendar date for whichever tier applies from July of each year through 2028. A system that instead hard-codes a single combined percentage for all Saudi employees will be wrong for at least one of the two groups from the very first July it runs through.

A third detail worth checking in any payroll system is what happens after July 2028. The published phase-in stops at the final tier of 11.75% employee and 13.75% employer, so from that point the new system's rate is expected to behave like the old system's did for years before it: fixed, until a future law changes it again. A payroll system should not keep applying an automatic yearly increase past the 2028 step without a new legal basis to do so.

Common GOSI mistakes in Saudi payroll

The 2024-2028 phase-in has introduced a new set of mistakes on top of the ones that already existed with a single fixed rate.

• Applying the new system's phased rate to a Saudi employee who was actually registered with GOSI before 3 July 2024, and should stay on the old fixed 21.5%.
• Forgetting to advance a new-system employee's rate at each July step, so the July 2025 tier is still being used in 2027.
• Applying an employee-side GOSI deduction, or a pension contribution, to an expatriate employee who should only carry the employer's 2% Occupational Hazards charge.
• Calculating GOSI on gross salary instead of the narrower contributable wage of basic plus housing only.
• Failing to cap contributable wage at SAR 45,000 for a highly paid employee, overstating both the deduction and the employer cost.

Doing this in Skyline Nexus ERP

The HCM module in Skyline Nexus ERP runs Saudi payroll with GOSI-specific reports, including a gosi-contribution report and GOSI compliance and invoice views, alongside processing, approval and payslip generation, salary structures, and the Mudad WPS submission that GOSI's own wage-data checks feed from. When Auto-post Payroll Transactions is switched on, processed payroll posts to the general ledger using the Payroll Mapping accounts, which include separate GOSI expense and GOSI payable accounts alongside salary expense and salaries payable.

Getting the old-system and new-system flag right per employee, and keeping the July rate step current, is what keeps those GOSI reports and the resulting ledger postings accurate; the module produces the reports and the postings, but the underlying employee GOSI classification is set up and maintained by the business.