Saudi Arabia: Amendments to GOSI regulations
27 January, 2022
In brief
The General Organisation for Social Insurance (GOSI) announced that the contribution of the employer and the beneficiary in the “Saned” Unemployment Insurance Program has been reduced from 2% to 1.5% of the beneficiary’s wage. GOSI also made amendments to Articles 9 and 21 around the registration and contributions to the insurance program as mentioned below.
GOSI’s article on reducing the percentage of contributions to the Unemployment Insurance Law-Saned can be accessed here.
The article on the amendments of Article 9 and 21 (which is only available in Arabic at the moment) can be accessed here.
In detail
The necessary amendments are reflected in the GOSI regulations which states that the reduced subscription rate of 1.5 % shall be borne equally by the employer and the contributor effective from 1 January 2022.
According to the article, the decision to reduce the subscription rates does not affect the amount of compensation currently being paid to beneficiaries of the Saned program and nor will it affect it in the future.
GOSI explained that the decision to reduce the subscription rate is a result of the continued periodic evaluation of the obligations of the Human Resources Development Fund (HADAF) and the benefits granted by the Saned program.
There will be periodic evaluations of the program and reviews to the subscription rates as per the approved mechanism which demonstrates the flexibility of the procedures in developing and improving the systems and legislations that support the Saned beneficiaries.
GOSI has directed people with questions to either review the Saned FAQ page on its portal, or leverage the various digital customer care resources available.
Furthermore, GOSI also added amendments to Articles 9 and 21 of the GOSI law which states:
The employer is required to enroll new joiners before the end of the first month of their joining date.
The employer is required to de-register employees who are leaving a company before the end of the month of their leaving date.
The contribution amount will be calculated based on the number of working days instead of on a monthly basis.
Employees’ salaries need to be amended on a monthly basis as opposed to annually.
Taxpayers need to consider these changes when the tax authority requests a GOSI reconciliation since the second set of changes will be effective as of 1 February 2022. Also, by updating salaries on a monthly basis (if any change are required) and calculating salaries on a daily basis, this will reduce the discrepancies between the total salaries reported through the ZATCA returns versus the GOSI records.
"The decision to reduce the subscription rates does not affect the amount of compensation being paid to Saned beneficiaries."
The Takeaway
1) There is a 0.25% reduction in taxpayers’ monthly GOSI contributions
2) Effective 1 February 2022:
- The administrative work related to joiners and leavers will need to be done within the same month
- GOSI will be calculated based on days and not months
- Salaries need to be updated on a monthly basis if there are any changes.
If you have any questions or require any further clarification on the matter, please reach out to us.
Explore more
Related content
Contact us
Chadi Abou Chakra
Middle East Indirect Tax Network Leader, PwC Middle East
Tel: +966 11 211 0400 Ext: 1858
Maher ElAawar
Partner, Middle East Indirect Tax and Fiscal Policy, PwC Middle East
Tel: +971 (0) 56 216 1109
Ebrahim Karolia
Partner, International Tax and M&A Services, PwC Saudi Arabia
Tel: +966 11 211 0400 ext. 1771
Follow us
