GOSI contributions and the 2025 Labor Law amendments in Saudi Arabia
For a Saudi employee, GOSI takes a pension contribution of 9% from the employer and 9% from the employee (rising by 0.5 points a year each side to 11% for people who joined the system from 3 July 2024), 0.75% each for SANED unemployment insurance, and 2% from the employer for occupational hazards. For an expatriate, the only contribution is the employer's 2% occupational hazards share. The Labor Law amendments in force since 19 February 2025 split notice periods, created a resignation procedure, capped probation at 180 days and lengthened several leaves.
Payroll and contract changes in Saudi Arabia
- GOSI old or new pension track
- Annual July pension step-up
- 2% hazards cover for expatriates
Pension contributions for new Saudi entrants start stepping up
What happened
Under the new Social Insurance Law, GOSI applied the first annual increase to the pension contribution on 1 July 2025 for Saudis who joined the system from 3 July 2024. The rate rises by 0.5 points a year for the employer and the employee until each share reaches 11%, up from 9%.
What it means for you
Your Saudi payroll can carry two pension rates at once: 9% each for employees who were already contributing, and a stepped rate for new entrants. Build the annual July increase into salary budgets until the rate reaches 11%.
Source: General Organization for Social Insurance. We check this page every week. Last checked .
GOSI, the General Organization for Social Insurance, runs Saudi Arabia's social insurance for the private sector. Contributions are a percentage of the contributory wage, which is the basic wage plus housing allowance: a cash housing allowance at the agreed amount, or employer-provided housing valued at two months' basic wage; commissions and sales or profit percentages count as wage. GOSI's guidance caps the contributory wage at SAR 45,000 a month. Three branches matter to an employer: annuities (pensions), occupational hazards (work injury and disease) and SANED (unemployment insurance). Saudis are covered by all three; non-Saudis are covered only by occupational hazards. For the 2025 Labor Law amendments, the Ministry of Human Resources and Social Development has published an article-by-article English guideline comparing the old and new text.
What does GOSI cost for a Saudi employee?
For a Saudi who was already contributing before 3 July 2024: pension 9% from the employer and 9% from the employee, SANED 0.75% from each, and occupational hazards 2% from the employer. That is 11.75% for the employer and 9.75% for the employee, on wages up to SAR 45,000 a month.
GOSI states there is no change to these rates for contributors who are not covered by the new law. The totals are our arithmetic from GOSI's branch rates.
What changed for Saudis who joined from 3 July 2024?
The new Social Insurance Law applies only to people joining the workforce with no earlier contribution periods. Their pension contribution starts at 9% each and rises by 0.5 points a year each side, from 1 July 2025, until it reaches 11% each, a 22% total.
GOSI says the employer and employee shares rise by 0.5 percentage points a year until they reach 11% each. SANED and occupational hazards rates are the same as for existing contributors. GOSI says the increase applies only to the pension branch and that an employee who joined on, say, 1 January 2025 is included in the July increases. The same reform gradually raises the statutory retirement age and the contribution period needed for early retirement for existing contributors under 50 Hijri years of age with less than 20 years of contributions.
What does GOSI cost for an expatriate employee?
Only the occupational hazards contribution: 2% of the contributory wage, paid entirely by the employer. Expatriates are not covered by the pension branch or SANED, so nothing is deducted from their pay for GOSI.
An expatriate's long-service protection comes from the Labor Law's end-of-service award instead.
How did the 2025 amendments change notice and resignation?
On an indefinite contract with monthly pay, the employer must now give at least 60 days' written notice and the employee at least 30 (amended Article 75). A new Article 79 (bis) sets the resignation procedure: deemed accepted after 30 days without a reply, with the employer able to postpone acceptance by up to 60 days for business reasons with written reasons.
Before the change, the minimum notice was 60 days for either side on monthly pay. Where pay is not monthly, both sides give at least 30 days. The employee can withdraw a resignation within 7 days unless the employer has already accepted it, and the contract stays in force until the resignation takes effect.
How did probation and contract rules change?
Probation must be written into the contract with its length and cannot exceed 180 days in total (amended Article 53). A non-Saudi's fixed-term contract with no stated term is now treated as one year from the start date, renewed for a similar period if work continues (amended Article 37).
Contracts must be documented as the regulations require (amended Article 51) and follow the Ministry's unified model for each contract type, which now includes each party's basic rights and obligations (amended Article 52).
Which leave entitlements changed?
Paid maternity leave rose from 10 to 12 weeks, with the 6 weeks after birth mandatory (amended Article 151). Bereavement and family leave was widened: 5 days for marriage or the death of a spouse, parent or child; a new 3 days for the death of a brother or sister; and 3 days on the birth of a child, taken within 7 days (amended Article 113).
Annual leave (21 days, 30 after five years) and sick leave were not part of the package. Overtime remains the hourly wage plus 50% of the basic wage, but the employer may now, with the employee's consent, give paid days off instead (amended Article 107).
What new duties did employers take on?
The amended Article 61 adds three duties: no discrimination in hiring or employment on grounds including race, colour, gender, age, disability or marital status; suitable housing or a cash allowance instead; and suitable transport to work or a cash allowance instead.
Every employer must also set a policy for training and qualifying its Saudi workers (amended Article 42). A disciplined employee now files a written grievance with the employer within 30 days; if it is rejected or not answered within 15 days, the employee may go to the labour courts within 30 days (amended Article 72).
Key figures
| Detail | Value |
|---|---|
| Pension, existing contributors | 9% employer and 9% employee; no change for contributors outside the new law. (source) |
| Pension, new system | For first-time contributors from 3 July 2024: 9% each, rising 0.5 points a year each side from 1 July 2025 until 11% each (22% total); applies to the pension branch only. (source) |
| SANED | 1.5% in total: 0.75% employer, 0.75% employee. (source) |
| Occupational hazards | 2% of the contributory wage, paid entirely by the employer. (source) |
| Expatriates | Non-Saudis are covered by the occupational hazards branch only; the employer's share for that branch is 2%. (source) |
| Contributory wage cap | SAR 45,000 a month; housing allowance included (cash at the agreed amount, in-kind at two months' basic wage). (source) |
| New Social Insurance Law | In force 3 July 2024 (27/12/1445H) for new entrants with no prior contribution periods. (source) |
| Labor Law amendments | In force 19 February 2025; Cabinet Decision No. 117 of 6 August 2024 and Royal Decree No. M/44 of 12 August 2024; 38 articles revised, 7 removed, 2 added. (source) |
| Notice (amended Article 75) | Indefinite contract, monthly pay: employer at least 60 days, employee at least 30 days. Non-monthly pay: 30 days either side. (source) |
| Maternity leave (amended Article 151) | 12 weeks on full pay (previously 10), 6 weeks after childbirth mandatory. (source) |
| Grievances (amended Article 72) | Written grievance to the employer within 30 days; if rejected or unanswered within 15 days, appeal to the labour courts within 30 days. (source) |
Frequently asked questions
Do expatriates pay into SANED or the pension branch?
No. GOSI covers non-Saudi employees under the occupational hazards branch only, which the employer funds at 2% of the contributory wage.
Which pension rate applies to a Saudi hire who worked before?
The new Social Insurance Law applies only to people with no contribution periods under the existing civil pension or social insurance laws before 3 July 2024. A Saudi who had contributed before stays on the existing 9% rate even if they join a new employer later.
Did the 2025 amendments change annual leave or the end-of-service award?
No. Annual leave (Article 109) and the end-of-service award (Articles 84 to 88) are not among the amended articles in the Ministry's guideline.
Do the amended notice periods apply to fixed-term contracts?
Article 75 governs contracts of indefinite duration. A fixed-term contract ends when its term expires unless renewed, and ending it early for an invalid reason carries compensation of the wage for the rest of the term, with a two-month minimum, unless the contract sets other compensation (Article 77).
Each of the six Gulf states writes its own labour law, its own end-of-service rules and its own quota for hiring citizens. When Teamed is your legal employer, we apply the right rules for the country each person works in and update your contracts, policies and payroll as the law changes, so you never have to read a statute to stay compliant.
