GOSI 2026 Rate Change Explained: What Changed, Who It Affects, and How to Apply It
From 1 July 2026, GOSI contribution rates increase for Saudi employees who fall under the New Social Insurance Law. The combined rate for these new-system employees rises to 23.5%, split as 10.75% employee and 12.75% employer. Employees already in the old system are unchanged at 21.5%, and expatriate contributions stay at 2%. If your payroll runs a mixed workforce, you now have two Saudi pension rates to apply correctly in the same cycle, which makes the GOSI 2026 rate change a payroll configuration issue as much as a compliance one.
What actually changed
The change is the third annual step in a schedule created by the New Social Insurance Law, issued under Royal Decree No. M/273 and effective from 3 July 2024. The law raised the pension (annuities) contribution for new-system members by 0.5% each year, starting in the law’s second year and continuing to its fifth. The General Organization for Social Insurance stated the increase would be “0.5% annually, reaching a cumulative increase of 2%”, taking the pension branch from 9% to 11% on each side by 2028.
The pension branch increase schedule
| Effective date | Pension (employee) | Pension (employer) |
|---|---|---|
| 3 July 2024 | 9.0% | 9.0% |
| 1 July 2025 | 9.5% | 9.5% |
| 1 July 2026 | 10.0% | 10.0% |
| 1 July 2027 | 10.5% | 10.5% |
| 1 July 2028 | 11.0% | 11.0% |
The full combined GOSI rates from 1 July 2026
Pension is only part of the total. Adding the SANED unemployment branch (0.75% each side) and, for the employer, occupational hazards (2%), the full combined position from 1 July 2026 is set out below.
| Population | Employee | Employer | Combined |
|---|---|---|---|
| New-system Saudi (registered on/after 3 Jul 2024) | 10.75% | 12.75% | 23.5% |
| Legacy-system Saudi (registered before 3 Jul 2024) | 9.75% | 11.75% | 21.5% |
| Expatriate | 0% | 2% | 2% |
What the contributable wage includes
Contributions are calculated on the contributable wage, which is basic salary plus housing allowance, subject to the current GOSI contributable-wage ceiling. The rate is only correct if the wage base it is applied to is correct, so the housing element has to be captured consistently for every employee.
Who the GOSI 2026 change applies to
The single most important rule is eligibility. The New Social Insurance Law applies only to people whose first-ever GOSI registration is on or after 3 July 2024, with no prior contribution period under the earlier Civil Pension Law or Social Insurance Law.
New-system employees
GOSI has been explicit that the law applies exclusively to newly hired civilians in both the public and private sectors without previous contribution history. These are the employees who move to the rising rate, reaching 23.5% combined from 1 July 2026.
Who stays on the legacy system
Everyone else stays on the legacy system. Saudi employees who were already contributing before 3 July 2024, and those grandfathered by age or service length under the transitional rules, keep the 21.5% combined rate. For most established employers this means a growing split workforce: long-tenured Saudi staff on the old rate, and everyone hired since July 2024 on the rising new rate. That split is permanent for the life of each employee’s registration, so it will only widen with every new Saudi hire.
Does the GOSI change affect expatriates?
Expatriate employees are unaffected by the pension changes entirely. Their 2% occupational-hazard contribution is paid by the employer and does not change.
Why it matters for payroll and finance
Two Saudi pension rates in one cycle
The rate rise itself is small, half a percentage point on the pension branch. The operational risk is larger. Running two Saudi pension rates in one payroll cycle means the deduction has to be driven by each employee’s GOSI registration date, not by a single company-wide setting. A blended or hard-coded rate will under-deduct for new-system employees and over-deduct for legacy employees, and both are compliance and reconciliation problems. For any employer running multi-entity payroll, that logic has to hold across every entity, not just the largest one.
A stepped employer cost to plan for
There is also a rising employer cost to plan for. Every new-system Saudi employee costs an extra 0.5% of contributable wage on the employer side this year, and another 0.5% each July through 2028. For a growing Saudi headcount, Finance should model this as a stepped cost, not a one-off, and read it from the same governed source that feeds the rest of the HR and payroll dashboard rather than a separate spreadsheet.
How to apply the GOSI 2026 rates in payroll
- Segment your Saudi workforce by GOSI registration date: on/after 3 July 2024 (new system) versus before it (legacy).
- Apply the right rate per segment, not a single company rate: 23.5% combined for new-system, 21.5% for legacy, from the July 2026 run.
- Confirm the contributable wage (basic plus housing) for each employee and check it against the current GOSI ceiling.
- Reconcile against the GOSI portal after the first affected run, because the authority calculates its own figure.
- Automate the date-based logic so new Saudi hires default to the new system and the annual July step applies without manual reconfiguration.
gulfHR expert view
In our experience running Saudi payroll for complex, multi-entity employers, the errors that trigger GOSI reconciliation queries are rarely about the headline rate. They come from treating the Saudi workforce as one population. The moment a company has both pre- and post-July-2024 Saudi employees, correct GOSI handling depends on employee-level registration data flowing into the contribution calculation, with an audit trail that shows why each person was charged the rate they were charged.
How gulfHR helps
gulfHR is built for exactly this kind of GCC payroll complexity. Its payroll and compliance modules can be configured to apply GOSI contributions by employee population, so new-system and legacy Saudi employees are calculated on their correct rates within the same run, with a full audit trail for reconciliation against the GOSI portal. That control depends on the same employee-record integrity that clean GCC compliance is built on. For employers running multiple entities or mixed Saudi and expatriate headcounts, and for teams already managing multi-country GCC payroll, that is the difference between a clean filing and a month-end investigation.
Frequently asked questions
What is the GOSI rate in Saudi Arabia from July 2026?
For new-system Saudi employees (registered on/after 3 July 2024), the combined rate is 23.5%: 10.75% employee and 12.75% employer. Legacy-system Saudi employees remain at 21.5%. Expatriates remain at 2%, employer-paid.
Does the 2026 GOSI increase apply to all Saudi employees?
No. It applies only to those under the New Social Insurance Law, meaning employees whose first GOSI registration is on or after 3 July 2024. Those registered before that date stay on the previous rate.
Does the GOSI change affect expatriate employees?
No. Expatriate contributions remain at 2% for occupational hazards, paid entirely by the employer.
Is the GOSI rate rising again after 2026?
Yes. The pension branch rises 0.5% each side every July until it reaches 11% each side in 2028.
What wage is GOSI calculated on?
The contributable wage, defined as basic salary plus housing allowance, up to the GOSI contributable-wage ceiling.
Run July 2026 payroll with confidence
See how gulfHR applies the two-track GOSI rates per employee, with a full audit trail for GOSI portal reconciliation.
Sources
- GOSI to increase pension contributions for new employees as of July 1, Argaam, citing the General Organization for Social Insurance.
- New Social Insurance Law comes into force, Saudi Gazette.
- Saudi Arabia GOSI Changes 2026: New Rates & Employer Duties, ops.ae.
- Saudi Arabia: GOSI Contribution Rates & Saned Unemployment Fund 2026, Mercans.