If you process payroll in Saudi Arabia, you’ll be aware of GOSI, the General Organization for Social Insurance, as being that one monthly task that you just can’t escape. If you’re a locally incorporated business or work with expats in Dubai or Bahrain, an understanding of how GOSI operates (and how to correctly calculate it) gets your HR systems clocking like clockwork and compliant.

Let’s describe it step by step in plain words, examples, and equations that you can use.

What Is GOSI and Why It Matters

GOSI stands for Saudi Arabia’s compulsory social insurance scheme that covers workers against occupational risks such as disability, retirement, and occupational injury.

Both employers and employees contribute part of the salary to the system each month. The contribution offers employees pensions or payments in the future.

It is the Kingdom’s long-term social safety net, and having it wrong is every payroll manager’s nightmare.

Who Should Register with GOSI

Saudi labour law requires all Saudi citizens employed in the private sector to be registered with GOSI.

For expatriate employees, registration is limited to occupational hazard coverage only (i.e., workplace injury).

Category	GOSI Coverage
Saudi Employees	Social Insurance + Occupational Hazard
Expat Employees	Occupational Hazard only

You have one or more Saudi employees, your company must be registered with GOSI — no exception.

GOSI Contribution Rates (2025)

Accuracy of payrolls comes in handy here.

Contributor	Saudi Employee	Expat Employee
Employer	12% of monthly salary	2% (occupational hazard only)
Employee	10% of monthly salary	–
Total GOSI Rate	22%	2%

Example Calculation for a Saudi Employee

Assuming that Ahmed receives a monthly salary of SAR 10,000.

Company contribution: 12% * 10,000 = SAR 1,200

Employee contribution: 10% * 10,000 = SAR 1,000

GOSI total monthly = SAR 2,200

So, the company provides SAR 2,200 per month to GOSI SAR 1,200 as company contribution and SAR 1,000 from Ahmed’s salary.

Formula for GOSI Contribution

For Saudi Employees:

GOSI = (Basic Salary + Housing Allowance) * 22%

For Expatriate Employee:

GOSI = (Basic Salary + Housing Allowance) × 2%

Basic salary + Housing allowance must be available in all businesses, but in contractual other allowances, use of GOSI can be made.

GOSI Payment Due Dates

GOSI contributions are normally remitted on the end of a Gregorian month and are usually made monthly.

There will be 2% monthly charges for late payment, and this can rise very fast if you delay.

How to Register Your Company for GOSI

This is easy online through the GOSI e-service portal:

Go to www.gosi.gov.sa
Select “Employer Registration“
Send company CR, national address, and Iqama details of employees
Upon approval, add Saudi and expat staff separately
Your payroll or HR team can make monthly contributions directly through the same portal.

GOSI Benefits to Workers

Most companies view GOSI simply as a deduction when it impacts workers’ lives in dramatic ways such as:

Retirement Pension: Monthly payment at retirement age.

Work Injury Compensation: Medical and financial attention for work injury.

Disability & Death Benefits: Economic assistance to the worker’s family.

Maternity Leave (for Saudi women): GOSI paid leave for eligible employees.

So, while it’s a compliance necessity for companies, it’s also a successful social safety scheme that optimizes employee welfare.

Common GOSI Calculation Mistakes

Even experienced payroll officers commit tiny errors which create massive compliance issues. Be aware of these:

Salary components – wrongly including transport or food allowance when they shouldn’t be.

Provisional registration mistake – not registering a new Saudi employee.

Incorrect classification – classifying expats as Saudis (or vice versa).

Late monthly submission – automatic penalty.

Unrecorded resignations – still paying inactive staff.

Double-check your payroll records monthly before submission.

GOSI Calculation Table at a Glance

Description	Saudi Employee	Expat Employee
Basic Salary	Included	Included
Housing Allowance	Included	Included
Other Allowances	Depends on contract	Depends on contract
Employer Share	12%	2%
Employee Share	10%	–
Total	22%	2%

Why Outsourcing Payroll Helps

It is time-consuming to maintain up-to-date GOSI regulations, MOL changes, and penalties if your staff handle hundreds of workers. This is the reason why the majority of Saudi businesses rely on expert payroll services such as Payroll Middle East.

Our HR professionals:

Deal with GOSI registration and monthly submissions

Accurate deductions and WPS compliance

Pay on time to avoid penalties

Auto-update employees’ records in the system

FAQs

What is GOSI in Saudi Arabia?

GOSI refers to General Organization for Social Insurance the official body responsible for social security and workplace insurance in Saudi Arabia.

How much is the GOSI contribution in Saudi Arabia?

For Saudi nationals, the contribution is 22% of salary (12% employer + 10% employee). Expatriates are only needed to contribute 2% (employer contribution) for occupational hazard.

Which salary elements are covered for GOSI calculation?

Normally only housing allowance and basic salary. Other allowances that are mentioned in the service agreement may be added if any.

When should GOSI be paid on a monthly basis?

On or before the last day of each Gregorian month to avoid penalties of 2% for delay in payment.

Can a company outsource GOSI administration?

Yes. It is usually companies that outsource to experienced payroll personnel who deal with registration, calculation, and monthly reporting as per Saudi law.

Stay Compliant with Confidence

If you are responsible for Saudi payroll and HR, staying compliant with GOSI isn’t an option, it’s mandatory.

We at Payroll Middle East simplify it by offering complete payroll and HR services tailored to Saudi businesses. From the hiring of employees to calculation of monthly contribution, we keep your business 100% compliant on time and as accurately as required.

Call us now and make your payroll experience smooth and GOSI-free.