# GOSI Social Insurance in Saudi Arabia: An Employer's Guide
*How to calculate GOSI contributions and file the monthly reports correctly*

> **In short:** A full guide to GOSI social insurance for companies in Saudi Arabia: contribution rates, who is covered, monthly reporting, and how Snad automates GOSI.

- **URL:** https://www.snad.io/en/blog/gosi-tamina-ijtimaia-dalil-sharikaat-saudi
- **Arabic original:** https://www.snad.io/blog/gosi-tamina-ijtimaia-dalil-sharikaat-saudi
- **Category:** Guides — Human Resources
- **Tags:** GOSI, Social Insurance, Human Resources, Payroll, Saudi Labor Law
- **Published:** 2026-05-10
- **Updated:** 2026-08-02
- **Publisher:** Snad (snad.io)

Social insurance — GOSI — is mandatory for every establishment in Saudi Arabia that employs at least one Saudi national. Even so, many business owners are unsure of the details: what is the correct rate? Who is included in the calculation? And how are the monthly reports filed?

This guide answers every one of those questions in plain language.

## What GOSI is and why it is mandatory

GOSI is the General Organisation for Social Insurance in the Kingdom of Saudi Arabia. It was established under the Social Insurance Law to protect private-sector workers against injury, disability, death and retirement.

Mandatory means exactly that: every establishment is legally required to register its Saudi employees with GOSI from their first day of work. Falling short exposes the business to financial fines and statutory penalties.

## Contribution rates: Saudis versus non-Saudis

For Saudi employees:
- Employee share: 10% of basic salary
- Employer share: 12% of basic salary (9% insurance + 2% occupational obligations + 1% contingency)
- Total contribution: 22% of basic salary

For non-Saudi employees (expatriates):
- Employee share: none
- Employer share: 2% only (work injury insurance)

A worked example: a Saudi employee on a basic salary of SAR 5,000:
- Deducted from his salary: SAR 500 (10%)
- Paid by the employer on top: SAR 600 (12%)
- Total transferred to GOSI: SAR 1,100 per month

## The wage subject to contribution

GOSI is not calculated on total salary — it is calculated on basic salary only. The following are not included:
- Housing allowance
- Transport allowance
- Phone allowance
- Any other allowance

Setting the basic salary correctly in the employment contract is critical, because it drives GOSI contributions, end-of-service gratuity and leave allowances alike.

Note: the maximum wage subject to contribution at GOSI is SAR 45,000 per month. Where the basic salary exceeds that, GOSI is calculated on SAR 45,000 only.

## Monthly GOSI reports: deadlines and fines

Every establishment must submit its monthly GOSI report and settle the contributions by the last day of the following month.

Late-filing fines:
- 1% for each month of delay on unpaid contributions
- Additional fines where new employees have not been registered

What does the monthly report contain?
- A list of all registered Saudi employees
- Their basic salaries
- The total contributions due for each employee
- Any employees added or removed during the month

## Automating GOSI with Snad

Instead of calculating GOSI by hand for every employee every month, Snad calculates it automatically:
- The 10% deduction from each Saudi employee
- The 12% borne by the employer
- Automatic distinction between Saudis and expatriates
- A monthly GOSI report generated ready for upload
- The accounting entry for GOSI contributions posted automatically to the ledger

All of it sits inside the Snad HR module, integrated with the monthly payroll run.

## Two contribution tracks: the 1445H law and who stays on the previous one

Since 3 July 2024 the Kingdom has had two social insurance tracks, and the difference shows up directly in payroll.

The first track: the 1445H Social Insurance Law. It applies to new entrants to the labor market who have no prior contribution periods under the Civil Pension Law or social insurance before its effective date. The pensions branch rate under it reaches 11% on both the employer and the contributor, phased in over five years: it starts at 9% and rises 0.5% a year from the second year the law is in force through the fifth. The statutory retirement age under it is 65.

The second track: anyone with contribution periods predating that date. They continue at 9% from the contributor and 9% from the employer in the pensions branch, with retirement at 60 Hijri years. The current amendments do not apply to anyone who has reached 50 Hijri years or more and has prior contribution periods, nor to anyone who has completed 240 contribution months.

| Branch | Employer | Contributor |
|---|---|---|
| Pensions — those with prior contribution periods | 9% | 9% |
| Pensions — new entrants after 3 July 2024 | Phased up to 11% | Phased up to 11% |
| Occupational hazards | 2% | None |
| Unemployment insurance (SANED) | 0.75% | 0.75% |

Before approving any payroll run, establish which track each employee falls under and confirm the rate in force for the current insurance year from your account with GOSI.

## The wage subject to contribution includes housing allowance

The most frequent error in calculating contributions is limiting the base to basic wage alone. The wage subject to contribution at GOSI is the basic wage plus housing allowance, whether paid in cash or provided in kind, before any deductions are taken.

- Cash housing allowance: added at the agreed amount.
- Housing provided in kind by the establishment: valued annually at the equivalent of two months of basic wage.
- The minimum contribution wage in the pensions branch is SAR 1,500 and the maximum is SAR 45,000 per month.

The effect is immediate: an employee on a basic wage of SAR 8,000 with a cash housing allowance of SAR 2,000 has his contribution calculated on SAR 10,000, not on SAR 8,000. Registering a wage lower than the real one is a violation in its own right, not merely a difference in the amount paid.

Test the correct base before approving the payroll run with the [GOSI calculator](/tools/hr/gosi-calculator).

## Statutory deadlines and the late-payment fine

Three obligations are used to measure an establishment, and all three run on a fifteen-day window:

| Obligation | Statutory deadline |
|---|---|
| Registering a new worker | Within 15 days of the month following the month he joined |
| Reporting the end of a worker's service | Within 15 days of the month following the month he left the job |
| Paying monthly contributions | Within the first fifteen days of the month following the month they are due for |

Article 19 of the Social Insurance Law provides that late payment carries a late fee of 2% of the contribution due for each month of delay or part of a month. Part of a month counts as a full month, so a single day past the deadline costs a full month's percentage. Late fees stop accruing once they reach 100% of the contributions.

Data carries a separate penalty. Violating the provisions of the law and its regulations — including submitting incorrect data or refusing to provide what GOSI requests — carries a fine of no more than SAR 10,000. This ceiling doubles in the event of repetition, and the fine multiplies by the number of covered workers and by the number of data items, provided the total does not exceed SAR 50,000 on any single occasion.

## The compliance certificate: when your government transactions stop

The fine is not the only penalty. The law obliges government bodies, public institutions and authorities, and companies owned by or part-owned by the state to require any employer dealing with them to produce a certificate from the competent social insurance office confirming that his establishment is registered with GOSI and has discharged all of its obligations towards it. The certificate is required in four cases:

- Applying to collect amounts due to him
- Submitting any bid to execute works, supply, operation or maintenance projects
- Applying to amend or renew the commercial registration, or to add any item to it
- Applying to receive a subsidy granted to him by the state

In practical terms: accumulated social insurance debt can hold up the renewal of your commercial registration or push you out of a government tender. The operational impact here is heavier than the value of the fine itself, because it halts transactions that have nothing to do with human resources.

## The employer bears both shares — and a late deduction is not accepted

The law is explicit on two points that are often handled incorrectly.

The first: the employer is obliged to pay the full contributions due from him and from his covered worker, and he alone is answerable to GOSI for paying them. In return, he may deduct the worker's own share of the contribution from the wage each time he pays it.

The second: if the employer neglects to deduct that share when wages were paid, he may not deduct it later in any form whatsoever. In other words, a deduction forgotten in a past month's payroll becomes a final cost to the establishment; it cannot be collected from the employee afterwards, nor spread over installments.

That alone is reason enough for the deduction to be calculated inside [payroll](/payroll) itself, rather than as a manual step reviewed after wages have gone out.

## How social insurance contributions are recorded in the books

Mixing the two shares in the accounting entry distorts the true cost of an employee. The correct split is straightforward:

- The employee's share is not an expense to the establishment. It is a deduction from the wage payable that becomes a liability in GOSI's name until it is settled.
- The employer's share is a real expense, recorded within employee costs in the month it accrues, not the month it is paid.
- When the transfer to GOSI is made, the liability for both shares is cleared in a single entry.

The practical outcome: the cost of an employee to the establishment equals the wage plus the employer's social insurance share. Anyone pricing his services on the wage alone is estimating his cost below what it really is.

Connecting [accounting](/accounting) to payroll means this entry is created on time every month, and turns reconciling the social insurance balance against GOSI's statement into a matter of minutes rather than a side spreadsheet.

## Frequently asked questions

### What is the social insurance contribution rate for a Saudi employee?

The rate depends on the employee's track. For anyone with contribution periods predating 3 July 2024: the pensions branch is 9% from the contributor and 9% from the employer under Article 18 of the Social Insurance Law, plus 2% for the occupational hazards branch borne by the employer, and 1.5% for the unemployment insurance branch (SANED) split equally at 0.75% on each party. New entrants after that date come under the 1445H law, where the pensions branch rate reaches 11% on each party through a gradual increase of 0.5% a year from the second year the law is in force through the fifth.

### Does housing allowance count in the wage subject to social insurance contribution?

Yes. The wage subject to contribution is the basic wage plus housing allowance, whether paid in cash or provided in kind, before any deductions are taken. Housing in kind is valued annually at the equivalent of two months of basic wage. The minimum contribution wage in the pensions branch is SAR 1,500 and the maximum is SAR 45,000 per month.

### When are social insurance contributions due and what is the late fee?

Contributions are paid within the first fifteen days of the month following the month they are due for. If they are not paid within that period, the employer must pay a late fee of 2% of the contribution due for each month of delay or part of a month, under Article 19 of the Social Insurance Law. Late fees stop accruing once they reach 100% of the contributions.

### Is a non-Saudi employee registered with social insurance?

Yes, in the occupational hazards branch. This branch applies compulsorily to all workers without distinction, and its contribution rate is 2% of the wage subject to contribution, borne in full by the employer. The rate may be doubled for employers who refuse to comply with the instructions issued by the competent authorities on worker safety and health.

### I forgot to deduct the employee's share from a previous month's salary — can I deduct it next month?

No. The employer may deduct the worker's share each time he pays him his wage, and if he neglects the deduction when wages were paid he may not deduct it later in any form whatsoever. The establishment alone remains answerable to GOSI for paying both shares, and the undeducted share becomes a final cost to it.

### When is a social insurance compliance certificate required?

The law obliges government bodies, public institutions and authorities, and companies owned by or part-owned by the state to require the employer to produce a certificate from the competent social insurance office confirming that his establishment is registered and has discharged its obligations. This applies when applying to collect amounts due to him, when submitting any bid to execute works, supply, operation or maintenance projects, when applying to amend or renew the commercial registration or add an item to it, or when applying to receive a subsidy granted to him by the state.

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## About the publisher
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