Are You Thinking of Setting Up in Saudi Arabia? Do You Know About GOSI?

If you are thinking about employing people based in Saudi Arabia then you need to be aware of the General Organisation for Social Insurance (GOSI) which is a semi-state body concerned with social insurance in Saudi Arabia.

GOSI collects contributions from employers and also employees (deducted at source by employers), implements social insurance rules and pays benefits to employees in case of occupational injuries incurred at work. It is supervised by a board of 11 directors from government departments, employers and insured persons.

Contributions for each employee vary according to their nationality – they are split into 3 categories:

  1. Saudi Nationals (private & public sector) – 22% of the maximum monthly applicable earnings (9% each for the employee and employer for annuity (pension), 1% each for unemployment contribution and 2% for occupational hazard which the employer pays)
  2. GCC Nationals (excluding Saudis) – between 17-22% in total depending on the nationality – always a 9% annuity contribution from employer, 2% unemployment contribution from employer and the balance from the employee
  3. Expatriates – just 2% unemployment contribution paid by the employer

The applicable monthly earnings used by GOSI to calculate the contributions include basic monthly salary and housing allowances and can also vary according to the employee’s age.

All employees registered with GOSI are entitled to many benefits but many of them are not aware of this. In case of an injury incurred at work they could be entitled to medical care, a daily allowance whilst they cannot work temporarily and even compensation for life if the injury causes permanent disability.

Payments are made by employers to GOSI each month – usually about 2 weeks after each month end via a bank transfer. Employers are required to register with GOSI and provide them with a full list of all employees and their applicable monthly earnings in January each year.  It is important for the employees to clearly see the contributions they pay separately in their monthly pay slips and also for companies to reconcile the amounts paid each month to the amounts calculated and deducted in the monthly payroll.

Written by Julia Hunt

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