If your GOSI deduction is 10.25% of your wage and the colleague at the next desk pays 9.75%, neither payslip is wrong. Saudi Arabia has been running two social insurance systems in parallel since July 2024 — and which one applies to you depends on a single fact: whether you had any contribution period with GOSI or the Civil Pension scheme before the new law took effect on 3 July 2024.
On 1 July 2026, the gap widens again. New-system contributors step up from 10.25% to 10.75%, while legacy contributors stay frozen at 9.75%. If you run payroll, you now maintain two rate tables with an annual step every July until 2028. If you are an employee, your deduction depends on your contribution history, not your employer.
The legal framework
The new Social Insurance Law was issued by Royal Decree No. M/273 of 26/12/1445H (2 July 2024), approved by Council of Ministers Resolution No. 1022. The provisions that produce the two-track payslip are in the decree itself:
| Provision | What it establishes |
|---|---|
| Decree, Clause Second | The new law does not apply to contributors with prior contribution periods under the Civil Pension Law (M/41) or the previous Social Insurance Law (M/33), nor to anyone already receiving a pension |
| Decree, Clause Third(1) | The annuities (pension) contribution under Article 15 of the Law phases in gradually: 18% → 19% → 20% → 21% → 22% of the contributory wage, stepping every 12 months from the effective date |
| Decree, Clause Third(2) | Employer and contributor each bear 50% of that contribution |
| Resolution 1022, Clause Third(6) | The unemployment insurance branch (SANED, Article 44(2) of the Law) is set at 1.5% of the contributory wage, split equally — 0.75% each |
| Decree, Clause Fourth | The previous laws (M/33, M/41, and the Unemployment Insurance Law M/18) continue to apply to everyone excluded by Clause Second |
The official English translation of the law is published by the Bureau of Experts at the Council of Ministers. The governing text is the Arabic version. For current administrative guidance, see the General Organization for Social Insurance (GOSI).
The two-track rate calendar, 2025 → 2028
Because the 18→22% ramp steps every 12 months from 3 July 2024 and is split 50/50, each party’s pension share rises 0.5 points every July. Adding SANED (0.75% each) and the employer’s 2% occupational hazards gives the full payslip picture:
| Period | New system: employee | New system: employer | Legacy system: employee | Legacy system: employer |
|---|---|---|---|---|
| 1 Jul 2025 – 30 Jun 2026 | 10.25% | 12.25% | 9.75% | 11.75% |
| 1 Jul 2026 – 30 Jun 2027 | 10.75% | 12.75% | 9.75% | 11.75% |
| 1 Jul 2027 – 30 Jun 2028 | 11.25% | 13.25% | 9.75% | 11.75% |
| From 1 Jul 2028 (final) | 11.75% | 13.75% | 9.75% | 11.75% |
What sits inside those percentages:
| Component | New system (from 1 Jul 2026) | Legacy system |
|---|---|---|
| Pension / annuities — employee | 10% | 9% |
| Pension / annuities — employer | 10% | 9% |
| SANED unemployment — each party | 0.75% | 0.75% |
| Occupational hazards — employer only | 2% | 2% |
| Total employee | 10.75% | 9.75% |
| Total employer | 12.75% | 11.75% |
SANED has been 0.75% per party in both systems since GOSI cut the combined rate from 2% to 1.5% effective 1 January 2022.
The wage base: not your full salary
GOSI is not calculated on gross salary. The contributory wage is basic salary plus housing allowance (paid in cash or in kind), subject to a ceiling of SAR 45,000 per month under GOSI registration rules. Transport allowances, bonuses and commissions are outside the base. Anything above SAR 45,000 is ignored.
A SAR 50,000 package with SAR 30,000 basic and SAR 5,000 housing contributes on SAR 35,000 — not SAR 45,000. The ceiling only bites when basic + housing together exceed SAR 45,000. Two employees with identical gross packages can have different GOSI deductions purely because of how the package is split.
Changing jobs does not change your system
A common payroll error in 2025–2026: treating a new hire as a “new entrant” because they are new to the company. Clause Second of the decree excludes anyone with prior contribution periods — the system follows your contribution history, not your employer. An employee who contributed to GOSI in 2019, left the Kingdom, and returns in 2026 re-enters under the legacy system at 9.75% — not the new system at 10.75%. Onboarding software that defaults new hires to new-system rates over-deducts from returning workers.
Retirement age: the other half of the reform
The contribution ramp is paired with a new retirement-age schedule:
- New entrants (and anyone under 29 on the effective date): pension entitlement at 65 (Gregorian).
- Existing contributors under 50 (Hijri) with fewer than 240 contribution months: a transitional schedule applies, ranging from 58 years and 4 months to 65 depending on age on the effective date (Decree, Clause Fifth).
- Contributors who already had 240+ months, or were 50+, keep their previous early-retirement rights under the old laws.
Clause Fifth also preserves an early route: a contributor with fewer than 180 months on the effective date may still claim a pension before legal age once contributions reach 360 months; those between 180 and 239 months follow a sliding 300–348 month schedule.
Expatriates: nothing changes
Non-Saudi employees are outside both pension tracks. The employer pays 2% occupational hazards on the same wage base (basic + housing, SAR 45,000 cap), and the employee pays nothing. The July step-ups do not affect expat payroll cost.
Check your own number
Our KSA GOSI Calculator applies the correct track automatically — legacy rates frozen at 9.75% / 11.75%, and the new-system ramp including the 1 July 2026 step to 10.75% / 12.75%. Enter your basic salary and housing allowance and compare both systems side by side.