Social Contribution (GOSI) calculation in KSA

Ranjith Menon

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    GOSI, or the General Organization for Social Insurance, is a major government entity in the Kingdom of Saudi Arabia (KSA) that implements the country’s Social Insurance Law. They generally specialize in collecting employer payments, obtaining legal social insurance coverage, and paying benefits to insured individuals or their family members.GOSI is a financial organization based in the capital of Riyadh that is governed by a board of thirteen directors. The board of directors is comprised of insured individuals, employers, and government authorities.

    Since its foundation in 1973, GOSI has worked tirelessly to improve the social insurance benefits provided to contributors and their dependents.GOSI provides services to a wide range of individuals, including employees, employers, retirees, medical professionals, and others. These services are covered under Saudi Arabia’s Social Insurance Law. We’ve discussed GOSI calculation, employer and employee contributions, GOSI base amount, and more in this topic.

    1. What is the percentage of GOSI applied to Saudi Nationals?

      Total GOSI percentage for Saudi nationals is 22%. Please find the below break up;

      Employer’s Contribution

      • Unemployment Contribution = 1%
      • Retirement Contribution = 9%
      • Compensation and Disability Plan = 2%
      • Total Employer’s Contribution = 12%

      Employee’s Contribution

      • Unemployment Contribution = 1%
      • Retirement Contribution = 9%
      • Total Employee’s Contribution = 10%
    2. What is the percentage of GOSI applied to expatriates?

      The employer is responsible for paying a 2% GOSI contribution. However, there is no GOSI fee to be paid by an expatriate employee in Saudi Arabia.

    3. What is the base amount for calculating GOSI?

      The GOSI contribution is always calculated on the Basic salary + Housing Allowance.

    4. Is there any maximum limit for GOSI base amount?

      Yes, the maximum base amount for calculating GOSI is SAR 45,000/- If any employee’s basic plus housing allowance is more than SAR 45,000/-, then GOSI contribution is calculated only against SAR 45,000/-

    5. Does a company get any invoice from GOSI with regard to the total contribution due for the month?

      Yes, companies can generate monthly invoices from the GOSI portal. Break up for the total invoice amount is also available in the portal.

    6. How is the GOSI contribution paid by the company?

      A company can deduct the employee portion through payroll and pay the total contribution i.e., both the employer and employee contribution to GOSI Authority. Companies are using the SADAD platform through their online banking portal to process GOSI payments.

    7. What is the deadline for paying the GOSI contribution?

      The deadline for completing the GOSI payment is the 15th of the following month. I.e., the last date for paying the January contribution is the 15th of February.

    Payroll Service in KSA

    The process of payroll is a little complicated and time-consuming; hence it is always recommended to  outsource your company’s payroll function. Outsourcing payroll will ensure the assistance of a team of trained payroll professionals and it frees up the time of the organization, helping them focus on other projects that add value to their business.

    One should be extra vigilant while selecting their payroll provider, as payroll data is highly sensitive, and one should opt for a provider that can ensure high levels of data security.

    As a leading payroll outsourcing company, HLB HAMT can help solve your payroll complexities through customized strategies. We take care of our clients’ entire payroll cycle that includes preparation of payroll reports, processing salary payment with WPS compliance, accrual management including Gratuity, pension funds, an online portal for accessing payslips, and many more. Our leadership team spends the necessary hours in every project, ensuring our clients get refined consulting services to take your business forward.

    Disclaimer:
    Whilst every effort has been made to ensure the accuracy of this information, HLB HAMT will not accept any liability arising out of errors or omissions. Please note that this blog is not all-inclusive. Our guidance is designed only to give general information on the issues/topics covered. It is subjected to change and not intended to be a comprehensive summary of all laws which may be applicable to your situation, treat exhaustively the subjects covered, provide legal advice, or render a legal opinion.

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