In one sentenceA system of monthly contributions paid by the employer and the employee on the contributory wage, to cover annuities (pension), occupational hazards and unemployment (SANED).
Simply put
Every month you pay GOSI a contribution for each employee: part of it is on the business and part is deducted from the employee. For a Saudi employee: annuities 9% on each side, SANED 0.75% on each side, and occupational hazards 2% on the employer alone.
The business's share is an expense on top of the salary, and the employee's share is a deduction from the salary that the business passes on to GOSI. For non-Saudis the branches that apply are different, so check them for each employee.
Worked example
A Saudi employee at a pharmacy has a basic of 6,000 SAR and a housing allowance of 1,500 SAR.
Contributory wage6,000 + 1,500 = 7,500
Employer's share: 9% + 2% + 0.75% = 11.75% × 7,500881.25
Employee's share: 9% + 0.75% = 9.75% × 7,500731.25
Total monthly GOSI contribution1,612.50 SAR
Formula: Contribution = contributory wage × (employer rate + employee rate)
Don't confuse it with
End-of-service benefitGOSI contributions are paid monthly to a government body, while the end-of-service benefit is paid by the business to the employee when the contract ends.