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Saudi Arabia has been one of the strongest and most regulated labour markets in the region, ensuring that employees receive proper protection and financial security.
One of the most important parts of this system is social insurance, which helps safeguard workers against retirement risks, workplace injuries and unemployment situations. GOSI plays a key role in this process and every employer needs to understand how it works and how contributions are managed.
At Yomly, we are one of the top HR and Payroll software platforms in KSA. Our software helps businesses across Saudi Arabia automate their payroll while staying fully compliant with GOSI rules and local regulations.
This guide from our expert team will help you understand what GOSI is, how contributions work and what you need to do to stay compliant as an employer.
What Is GOSI?
GOSI stands for the General Organization for Social Insurance, the government body responsible for managing social insurance programs in Saudi Arabia. It was created to protect the financial and social rights of workers and their families. GOSI collects monthly contributions from employers and eligible employees and uses these funds to provide benefits such as pensions, occupational hazard coverage and unemployment support.
GOSI works by registering each employee, tracking their monthly salary contributions and maintaining their insurance record throughout their employment.
These records are then used to determine the employee’s future benefits, whether they relate to retirement, disability, workplace injury or unemployment support like SANED. The goal is to create a safer and more secure work environment where employees have long-term protection.
How GOSI Applies to Saudi and Non Saudi Employees
Here is how it works on both Saudi and Non Saudi employees:
Saudi Employees
Saudi nationals must be registered under GOSI. They contribute to pension, unemployment insurance (SANED) and occupational hazard insurance. Both employee and employer share the contribution cost based on a fixed percentage of the employee’s wage.
Non Saudi Employees
Expat employees are only covered under the occupational hazard insurance program. They do not contribute to pensions or SANED. Employers pay a small percentage on behalf of the expatriate employee to cover workplace injury protection.
Who Must Register Under GOSI?
When companies begin operating in Saudi Arabia, one of the first compliance steps is registering employees under GOSI. Many employers get confused about who exactly needs to be enrolled, so here are the main categories that must be registered:
- Saudi nationals working in the private sector
- GCC nationals working in Saudi Arabia
- Expatriates who fall under occupational hazard insurance
- Employers with active commercial registration in KSA
- Any establishment hiring workers under the Saudi Labour Law
Now that you know who needs to be registered under GOSI, the next step is to understand the different components of GOSI contributions and how they apply to both Saudi and non Saudi employees.
Components of GOSI Contributions
Let us break down the main contribution types that apply to Saudi and non Saudi employees under the GOSI system.
GOSI for Saudi Employees
Saudi employees are covered under all main GOSI programs. This includes retirement pension, unemployment insurance (SANED) and occupational hazard insurance. Their monthly salaries and fixed allowances are used to calculate contributions.
The purpose is to protect Saudi nationals with long term financial benefits such as pension payouts and support in cases of workplace injury or unexpected unemployment. Employers must ensure that Saudi employees are always registered correctly and that contributions are updated when salaries change.
GOSI for Expat Employees
Expat employees are not included in the pension or SANED programs. They are only covered under the occupational hazard insurance scheme, which protects them in case of work related injuries or accidents.
This contribution is paid entirely by the employer. Although expats do not contribute to pensions, they must still be registered in the GOSI system so their occupational coverage is active and compliant with Saudi labour regulations.
Contribution Percentages
GOSI contributions are calculated based on fixed salary components and follow a set percentage structure:
For Saudi employees
- Pension: 9 percent from the employer and 9 percent from the employee
- SANED unemployment insurance: 1 percent from the employer and 1 percent from the employee
- Occupational hazard insurance: 2 percent paid only by the employer
For Expat employees: Occupational hazard insurance: 2 percent paid only by the employer
These percentages must be applied accurately each month. Payroll errors or missed updates can lead to penalties, so businesses often use automated payroll platforms like Yomly to calculate contributions correctly and stay fully compliant.
Salary Components Considered for GOSI
When calculating GOSI contributions, you also need to know which salary components are included and which are excluded. Here are the key elements used for accurate GOSI calculations.
Basic Salary
The basic salary is the primary wage defined in the employee’s contract. It forms the foundation for GOSI calculations and must be reported exactly as stated in the official employment agreement.
Housing Allowance
If the employee receives a housing allowance, it must be added to the basic salary to calculate the GOSI contribution. This allowance is considered part of the fixed monthly compensation.
Any Fixed Contractual Allowances
Allowances that are fixed and stated in the employment contract, such as transport, communication or hardship allowance, must be included in the GOSI salary. Variable or performance based payments are not included.
Monthly Earning Limits
GOSI applies contribution limits based on a maximum and minimum wage. Employers must ensure that reported salaries fall within the approved range to avoid compliance issues.
The best thing about Yomly’s payroll platform is that it automates the entire payroll process, so you do not need to worry about calculating each component manually.
How GOSI Registration Works (Step by Step)
GOSI registration is one of the first compliance steps for any company operating in Saudi Arabia. It ensures that every employee is enrolled correctly and that monthly contributions are calculated and reported without errors. Here is a clear and practical step by step process to help employers understand how GOSI registration works.
Step 1: Register Your Company on the GOSI Portal
The first step is to create an official account for your business on the GOSI Online Portal. Your company must register using its legal details so GOSI can activate your establishment for contribution management. During this step, you will be required to provide basic information such as:
- Commercial Registration (CR) number
- National address and contact details
- Employer ID and authorized signatory details
Once approved, your establishment will receive a GOSI account where all employee registrations and contributions will be managed.
Step 2: Add Establishment Details and Unified Number
After account creation, you must add your establishment’s unified number, branch details, and industry classification. The unified number links your company across various government systems in Saudi Arabia. It is important to ensure that all establishment data matches your Ministry of Human Resources and Social Development (MHRSD) records to avoid registration conflicts or delays.
Step 3: Register Saudi and GCC Employees
In this step, you must register every Saudi and GCC national working in your company. These employees fall under full social insurance coverage, so their details must be entered accurately. Registration requires uploading:
- National ID number
- Employment contract details
- Job title and joining date
- Basic salary and fixed allowances
GOSI will verify each detail and activate the employee’s account under your establishment. Any errors may delay monthly contribution processing.
Step 4: Register Expat Employees Under Occupational Hazard Insurance
Expat employees must be registered for occupational hazard insurance. This ensures that they are protected in case of workplace injuries or accidents. Although expats do not contribute to pension or SANED, they must still be added to the GOSI system so their insurance record is active.
Employers must enter contract details, job role and salary to complete this step. Proper registration prevents insurance gaps and ensures compliance during audits.
Step 5: Submit Monthly Salary Details and Pay Contributions
Once all employees are registered, employers must submit monthly salary details to GOSI. This includes reporting any salary changes, allowances or employee status updates. GOSI will calculate the contribution amounts based on the approved percentages.
Employers must then pay the contributions within the assigned month to remain compliant. Late submissions can result in penalties, suspension of services or audits.
Accurate registration is very important because errors during these steps can delay payroll processing or lead to compliance penalties.
This is why many companies use Yomly’s automated payroll system, which generates GOSI-ready reports, applies the correct contribution rules and keeps all employee data updated without manual work.
Penalties for GOSI Non-Compliance
If you do not follow the required GOSI rules and reporting steps, there are strict penalties that can affect your company’s operations, finances and compliance status. To help you understand the risks clearly, check out the major penalties below:
- Financial fines for incorrect salary reporting
- Penalties for late contribution payments
- Suspension of government services
- Inspections and audits from GOSI
- Employer classification downgrade
- Blocking of employee transfers and new visa processing
Non-compliance can create serious disruptions, so having an automated and accurate system is important. Want to give our platform a try and see how Yomly simplifies GOSI payroll and compliance? Book a free demo and our team will walk you through everything step by step.
