GOSI: INSURING THE FUTURE OF YOUR COMPANY

The General Organization for Social Insurance (GOSI) carries out the social insurance regulations in Saudi Arabia. GOSI collects contributions from employers, covers social insurance according to the law and pays benefits for insured persons or their families. The organization provides medical treatment, allowances and services for injured or disabled individuals or to the families of insured individuals who are deceased, in which case the death pension is received. 

GOSI calculations vary across employee nationalities with employees split into three main groups, Saudi Nationals, GCC nationals who have varying contributions and other expat workers. For Saudi nationals in the private sector GOSI contributions equal 22% of the maximum monthly applicable earnings (9% each for the employee and employer for pension contributions, 1% each for unemployment contributions and 2% for occupational hazard which is covered by the employer). The monthly earning combines basic salary, housing allowance and commissions. In-kind housing is equivalent to a two-month basic salary divided by twelve months. Meanwhile, minimum salary 1500 SAR will be counted as half Saudi and minimum salary 3000 SAR will be counted as full Saudi.

For other GCC nationals, the numbers vary in private sectors, as well as depending on which GCC country they are from. The contributions are between 17-22% in total depending on the nationality but mostly with a 9% annuity contribution from employer and the remaining from the employee. For all other expats, employers pay 2% occupational hazard. 

GCC COUNTRYCONTRIBUTOR %EMPLOYER
UAE9%11%
BAHRAIN6%6%
OMAN7%9%
QATAR6%9%
KUWAIT9.5%9%

The Annuities Branch in GOSI applies to Saudi’s only. The calculation formula for the retirement pension of the employment time before 2001 is as follows; average wage over the last two years of the full contribution period, multiplied by the number of previous months of contribution and divided by 600. For dependants, a 10% amount is added for one, 15% for two and 20% for three or more. For employment time after 2001, the pension is the average wage over the last two years of the full contribution period, multiplied by the number of future months of contribution and divided by 480. Both numbers, before and after 2001, are added, amounting to the final pension amount. 

For disability pensions, the Annuities Branch at GOSI states that a contributor who is unable to earn a third of his previous wage due to a disability that lasts over six months, then this contributor is eligible for the disability pension. The amount is calculated by multiplying the average wages during the last two years of the entire subscription period by 50%. Deceased pensions are calculated by multiplying the contributor’s average wage by 50% for one family member and 75% for two. If there are more than two family members, 100% is distributed among them. 

By providing insurance to workers across Saudi Arabia, GOSI serves not only the Saudi government in its data collection, but also all workers in the Kingdom. The organization is leading the GCC region in social insurance, providing further programs to benefit workers, including the wage protection system and SANED, an unemployment insurance program. 


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