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.
