Registering employees in social insurance is not optional; it is a fundamental pillar in protecting employee rights, enhancing job security, and achieving a stable work environment, as stipulated by the Saudi Labor Law.

Due to the importance and sensitivity of this topic, this article will cover everything related to social insurance in Saudi Arabia, including registration procedures, employer contribution rates, and insurance coverage for both Saudi and non-Saudi employees.

What is social insurance in Saudi Arabia?

Social insurance in Saudi Arabia is a system established by the General Organization for Social Insurance (GOSI), which was founded by Royal Decree No. (M/22) dated 6/9/1389 AH (corresponding to 15/11/1969 AD). Its insurance, social systems and legislation have since evolved to protect employees in both the private and public sectors, whether Saudi or foreign.

GOSI is committed to ensuring the financial stability of employees and protecting their families upon retirement, in cases of disability or death, and in the event of any work-related risks, accidents, or injuries. The General Organization for Social Insurance (GOSI) requires all employers to register their employees with social insurance and pay the monthly contribution rate determined by GOSI. This rate is equal to or greater than the percentage deducted from the employee's salary. Penalties and fines are imposed on any company or employer who fails to comply with this system or commits violations against their employees.

What are the employer's contribution rates?

GOSI has specified, in its regulations and bylaws, the monthly contributions that employers must pay for their employees, based on the employee's salary and the type of insurance applied to them. Generally, however, the contributions are calculated as follows:

For Saudi employees:

(1) Social Insurance Contributions: A specific percentage is deducted from the employee's salary, as determined by GOSI, and the employer is required to pay a similar percentage from their own account to the Social Insurance fund.

(2) Pension Insurance (retirement, non-occupational disability, and death): In the case of retirement, 9% is deducted from the employee's monthly salary, and the employer is also required to pay 9%.

(3) Occupational Hazard Insurance (work-related injuries and occupational diseases): 2% of the monthly salary is the employer's responsibility.

(4) Unemployment Insurance (SANED): The employer and the employee each contribute 0.75%.

Therefore, the total contribution borne by the employer for a Saudi employee is 11.75% (9% pension + 2% occupational hazard + 0.75% SANED). The total contribution for Saudi employees is 9.75% (9% pension + 0.75% unemployment insurance).

For foreign employees:

The mechanism differs for foreign employees. Contributions are limited to occupational hazard insurance, with the employer only responsible for a 2% fee. Foreign employees are not required to pay any contribution.

What happens if an employer fails to register employees with social security?

To ensure that companies and employers comply with its regulations and bylaws, the General Organization for Social Insurance (GOSI) has established a set of penalties to protect workers' rights and ensure fairness in the workplace. These include:

(1) Financial penalty: A financial penalty is imposed on the employer if they are late in paying social security contributions or fail to register employees.

(2) Retroactive registration: GOSI requires the employer to register the employee retroactively from the date they actually started work and to collect all contributions due for that period.

(3) Late payment penalties: In addition to the basic penalty for the violation, a late payment penalty is imposed on contributions that were not paid on time, at a rate of 2% per month of the outstanding contributions.

(4) Penalty for disbursing compensation without entitlement: If the violation (such as failing to register an employee who was entitled to "Sanad" compensation after leaving work) results in the disbursement of compensation without entitlement, the penalty is more severe.

It is worth noting that if an employer fails to register an employee, the employee has the right to notify the relevant social security office and request to register themselves. According to the "Overview of Social Security in the Labor Law," the relevant office is obligated to compel the employer to register the employee once the registration requirements are met. This is the direct, official procedure for protecting the employee's rights before resorting to any legal action.

How to Register Employees with Social Insurance

With the Kingdom's digital transformation across all sectors, it has become easy to register employees with social insurance electronically through the General Organization for Social Insurance (GOSI) website.

For Saudi employees, the steps are as follows:

- Access the GOSI website.

- Start by registering the company if it is not already registered.

- Add the new employee and enter their data, including their ID number, date of birth, contract type, and salary.

- Specify the employee's actual start date.

- Review the data and confirm registration to begin monthly contributions.

For non-Saudi employees, the registration process is usually automatic once the employee transfers to the Ministry of Human Resources and Social Development.

The employer's responsibility here is to "complete the data," not "register from scratch." They can access their "My Insurance" account and select the "Complete Data for a Non-Saudi Subscriber Registered Automatically" service.

This applies to exceptional cases requiring manual registration where automatic registration is not available, such as (GCC citizens, nomadic tribes, and private expatriates not sponsored by the establishment).

In this case, the employer uses the "Add a non-Saudi subscriber who has not previously been registered with insurance" service, and manually enters the residence number, border number, or passport data and completes all the data.

In conclusion, we have covered the details of social insurance in Saudi Arabia, which is important for all employees, whether Saudi or foreign, and is also a concern for employers who are keen to comply with labor laws and regulations.

If you wish to register your employees with social insurance, or if you are facing any legal issues related to insurance, please do not hesitate to contact us at Mohammed AlKhliwi Law Firm. We will be happy to assist you. 

Disclaimer: The above content does not constitute legal advice, and the author of this article assumes no legal responsibility. For legal advice, please contact us.