A. Update
The Council of Ministers of the Kingdom of Saudi Arabia has Approved the New Social Insurance Law which applies exclusively to new employees and affirms the continuation of Civil Pension and Social Insurance Laws for current contributors with exceptions to provisions on statutory retirement age and retirement eligibility age for certain groups. These changes apply to both public and private sectors. The key changes are as under:
Increased retirement age for New Employees
- The new statutory retirement age ranges between 58 and 65 years.
Increase in contribution rate
- Contribution Rates will gradually increase by 0.5% annually from the second year of employment, culminating in a total increase of 2% by the fifth year. This will result in a final rate of 11%, up from the current 9%.
Changes for Employees with Existing Contributions with age Under and Above 50 years
- Existing employees will maintain their current contribution rates. For employees under 50, the retirement age will gradually increase, starting with a 4-month increase, based on their age as of July 03, 2024. This means that younger employees will see a more significant increase over time, aligning with the new statutory retirement age range between 58 and 65 years. Employees over 50 will retain their existing retirement age.
B. Statutory Compliance Release Date: July 02, 2024
C. Effective Date: July 03, 2024
A. Update
The General Organization for Social Insurance (GOSI) has recently approved major amendments and additions to the regulations governing registrations and subscriptions under the Social Insurance Law (predominantly articles 9 and 21), which will come into effect from 01 January 2022. These are summarized as follows:
Update in registration/de-registration deadline:
- The new deadline for employers to add or remove contributors has now been amended to the last day of the contributor’s month of joining.
- The new deadline for employers to complete the data of non-Saudi contributors and submit their wages has now been amended to the last day of the contributor’s month of joining the service.
- In case of delays, penalties will be imposed for missing the mentioned deadlines.
Update in mechanism of calculating contributions:
- The new mechanism for calculating contributions for each contributor will now be in terms of days instead of months worked by the contributor in the company.
- Previously, employees who commence employment at any date within a given month were entitled to GOSI contributions for the full month, and these were not prorated based on the employee’s joining date. Similarly, no GOSI contributions would be due previously for contributors whose employment was terminated before the last day of the month.
- However, in light of the new amendments, GOSI contributions for both new joiners and leavers will now be calculated based on the number of days worked in the month of joining or leaving.
Revision in wage update mechanism:
- The annual wage update service will now be discontinued, and adjustments to wages can now be made on a monthly basis for all contributors.
- In case a contributor’s wage has changed in a month, the employer is obligated to submit the new wage in the same month of modification.
- The fines and penalties stipulated in Article 62 of the Social Insurance Law will continue to apply.
B. Statutory Compliance Release Date: January 24, 2022
C. Effective Date: January 1, 2022
A. Update
The General Organization for Social Insurance announced the amendment of contribution rates in the unemployment insurance law "SANED", reducing the contribution rates to one and a half percent (1.5%) of the wage subject to contributions instead of two percent (2%). This rate shall be borne equally by both the beneficiary and the employer as of 01 January 2022. There is no change in collection mechanism.
