The General Organisation for Social Insurance or GOSI is a Saudi Arabian government entity that provides social insurance coverage, including pensions, disability benefits, and work-related injury compensation. It encompasses all private sector workers, Civil and Military employees, and a section of GCC citizens.
GOSI contributions are automatically deducted from employee salaries and paid on behalf of the employer by agents. The initiative secures employees from unforeseen incidents that may adversely hamper their financial future like termination of work, permanent disability, death, or retirement.
Benefits of GOSI
For employees:
Pension: Offers retirement pensions as per contribution and length of service. Helps employees maintain financial stability even after retirement.
Disability benefits: Provides monetary assistance if an employee is permanently or partially disabled as a result of work-related injury.
Survivor benefits: Provides financial support to dependents in the event of the death of the insured.
Unemployment benefits: Provides monthly payments to workers who get laid off until they are employed again.
For employers:
- Employee welfare and retention: Helps promote loyalty among employees through security and benefits.
- Financial protection: Reduces the cost to the company of paying employees for on-the-job injuries or retirement.
How is GOSI Calculated?
For Saudi nationals:
For Saudi nationals, GOSI contribution encompasses a percentage of their basic salary and housing allowance. The total contribution of GOSI for Saudi nationals is 21.50%, with employer and employee each contributing a specific percentage.
For expatriates:
The GOSI expatriate contribution is 2% and this is fully paid by the employer.
GOSI contribution is computed only on basic salary and housing allowance, and the highest base amount to be used for computing GOSI is SAR 45,000/-. So, if the basic salary and housing allowance of any employee are above SAR 45,000/-, the GOSI contribution is calculated on SAR 45,000/- only.
| Category | Employee Contribution | Employer Contribution |
|---|---|---|
| Saudi Employees (Annuities) | 9% | 9% |
| Occupational Hazards (All Employees) | 0% | 2% |
| Unemployment Insurance for Saudis | 0.75% | 0.75% |
| Total Contribution | 9.75% | 11.75% |
GOSI Compliance: What Employers Must Know
Employers in Saudi Arabia must comply with the GOSI regulations to avoid penalties and ensure their workforce stays protected. Here are some GOSI compliance essentials to follow:
Register employees on GOSI:
- Employers must register all eligible employees (both Saudi nationals and expats) within 30 days of hiring through the GOSI online portal.
Calculate & deduct contributions accurately:
- Employers must deduct the correct percentage from employees' salaries.
- Under-reporting employee salaries or incorrect deductions can lead to hefty fines plus back payments.
Submit monthly payments on time:
- Contributions must be paid by the 15th of each month through authorized banks or payroll services.
- Late payment results in penalties of 2% of the unpaid amount of each delayed month.
Maintain compliance records
Employers must keep accurate payroll records showing GOSI deductions and payments for audits.
Failure to provide records during inspection can lead to a fine for missing or inaccurate records.
Check GOSI violation fines here
Managing GOSI Compliance with greytHR
Managing GOSI compliance and keeping pace with ever-evolving regulations can be a challenge. greytHR’s automated payroll software for compliance helps businesses stay compliant with GOSI with minimal manual effort. The solution offers businesses key benefits like:
- Automated GOSI contributions: Calculate and deduct the right GOSI amount from salaries.
- Real-time compliance tracking: Ensures companies meet GOSI regulations for employee registration and payments.
- Reports & audits: Creates GOSI reports for regulatory submission.
- Payroll & pay slips: Generates GOSI-compliant pay slips, showing deductions and contributions.
- Employee self-service: Employees can check their GOSI contributions and benefits via the greytHR ESS portal.
To know more about greytHR's full-suite HRMS and how it can help businesses in Saudi Arabia, click here: greytHR | Full Suite HRMS for MEA Businesses.
FAQs
What are the eligibility criteria for retirement pension under GOSI?
Eligibility for a retirement pension under GOSI depends on the employee's nationality and contribution period.
For Saudi nationals:
Must have contributed to GOSI for at least 15 years and reach 60 years (men) or 55 years (women).
Employees with 25 years of contribution can retire voluntarily before reaching retirement age.
Early Retirement (10 years of service):
For Expat (Non-Saudi) Employees:
- Expats are not eligible for a retirement pension under GOSI.
- Instead, upon leaving Saudi Arabia, they receive a one-time lump-sum payment based on their total contributions.
- If an expat suffers a work-related disability or death, their dependents may receive compensation benefits under GOSI.
What is SANED, and who is eligible?
SANED is unemployment insurance for Saudi employees. Employees who lose their jobs involuntarily can receive financial support if they have contributed for at least 12 months.
How can an employer check their GOSI compliance status?
Employers can log in to the GOSI online portal to check registration, payment history, and compliance records.
