Mandatory Employer Social Benefits in Saudi Arabia: Key Burden Items

When hiring employees in Saudi Arabia, businesses must comply with a set of mandatory social benefit contributions. These contributions are governed by the Saudi Labor Law and the General Organization for Social Insurance (GOSI), ensuring employees have access to essential benefits such as pensions, unemployment support, healthcare, and financial support during injury. Compliance is crucial to avoid penalties and ensure employee satisfaction.

This guide outlines the key social benefit components, employer obligations, and best practices for managing employee benefits in Saudi Arabia.

GOSI Contributions for Saudi Nationals

Saudi nationals are entitled to full GOSI coverage, including pensions, unemployment insurance (Saned), and occupational hazard insurance. These contributions are shared between the employer and the employee.

Component	Employer Contribution	Employee Contribution	Total Contribution
Pension Insurance	9% of the employee’s monthly wage	9% of the employee’s monthly wage	18% of the monthly wage
Unemployment Insurance (Saned)	1% of the employee’s monthly wage	1% of the employee’s monthly wage	2% of the monthly wage
Occupational Hazard Insurance	2% of the employee’s monthly wage	None (employer-only contribution)	2% of the monthly wage
Total GOSI Contribution for Saudi Nationals	12% employer	10% employee	22% total

Breakdown for Saudi Nationals (Example Calculation)

If a Saudi national earns SAR 10,000 monthly, GOSI contributions will be as follows:

Component	Employer Share (SAR)	Employee Share (SAR)	Total Contribution (SAR)
Pension Insurance	900	900	1,800
Unemployment Insurance (Saned)	100	100	200
Occupational Hazard Insurance	200	0	200
Total GOSI Contribution	1,200	1,000	2,200

GOSI Contributions for Expatriates

Expatriate employees have different GOSI requirements compared to Saudi nationals. They are only covered under occupational hazard insurance, while pensions and unemployment insurance do not apply.

Component	Employer Contribution	Employee Contribution	Total Contribution
Pension Insurance	Not Applicable	Not Applicable	0
Unemployment Insurance (Saned)	Not Applicable	Not Applicable	0
Occupational Hazard Insurance	2% of the employee’s monthly wage	None (employer-only contribution)	2% of the monthly wage
Total GOSI Contribution for Expatriates	2% employer only	0% employee	2% total

Breakdown for Expatriates (Example Calculation)

If an expatriate employee earns SAR 10,000 monthly, GOSI contributions will be as follows:

Component	Employer Share (SAR)	Total Contribution (SAR)
Pension Insurance	0	0
Unemployment Insurance (Saned)	0	0
Occupational Hazard Insurance	200	200
Total GOSI Contribution	200	200

How Is GOSI Contribution Calculated?

The GOSI contribution is calculated based on the employee’s total monthly wage. The key difference between Saudi nationals and expatriates is the type of benefits applicable to each category. Here’s a comparison of the contribution breakdown for both categories:

Employee Type	Pension Insurance (Employer/Employee)	Unemployment Insurance (Employer/Employee)	Occupational Hazard Insurance (Employer Only)	Total Contribution
Saudi Nationals	9% / 9% (18%)	1% / 1% (2%)	2% (Employer Only)	22% (12% employer + 10% employee)
Expatriates	Not Applicable	Not Applicable	2% (Employer Only)	2% (Employer only)

What Are the Leave Entitlements for Employees in Saudi Arabia?

Under Articles 109 to 118 and Article 160 of the Saudi Labor Law, employees are entitled to various types of leave. These leave entitlements ensure that employees receive adequate rest and time off for family or health-related reasons.

Type of Leave	Entitlement	Conditions
Annual Leave	21 days (increases to 30 days after 5 years)	Employee must have completed 12 months of service
Sick Leave	120 days (30 days full pay, 60 days half pay, 30 days unpaid)	Employee must provide medical proof
Maternity Leave	10 weeks (fully paid)	Available to female employees before and after childbirth
Paternity Leave	3 days	Available to male employees at the time of childbirth
Marriage Leave	5 days	Granted upon the marriage of an employee
Bereavement Leave	5 days (for spouse or close family member)	Must be used immediately following the loss

How Globaine EOR Can Help

Navigating Saudi Arabia’s social benefits system can be complex. Globaine EOR provides comprehensive support to ensure employers meet all their obligations under Articles 109 to 118 and Article 160 of the Saudi Labor Law. Our services include:

Payroll Management: We calculate and manage all social benefit contributions accurately and on time.
Compliance Assurance: We ensure full compliance with GOSI registration, payment schedules, and reporting requirements.
Employee Benefits Administration: From pensions to injury insurance, we ensure employees receive their entitled benefits.
Leave Management: We ensure all leave entitlements are provided in accordance with Saudi Labor Law.