GOSI Contribution Calculation

GOSI Contribution Calculation: Overview
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Table of content
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Table of content
1 GOSI Contribution Calculation: Overview
1.1 GOSI Contribution Calculation: Housing Base
1.2 GOSI Contribution Calculation: Basic Monthly Salary
1.3 GOSI Contribution Calculation: Employee Age
1.4 GOSI Contribution Calculation: Example
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1 GOSI Contribution Calculation: Overview

The system calculates an employees GOSI-applicable earnings based on the following criteria:
Criterion
More Information
The employees housing allowance earnings and, related to this point, the employees
marital status and the residence status of an employees dependents.
GOSI Contribution Calculation: Housing Base
The employees basic monthly salary in January or in the month of hire and, related to
this point, the employees nationality and whether the employee works in the public or
private sector.
GOSI Contribution Calculation: Basic Monthly Salary
The employees age.
GOSI Contribution Calculation: Employee Age
Implementation Considerations
You make the required customizing settings in Customizing for
Payroll: Saudi Arabia
Social Insurance
Integration
The system stores the GOSI basic salary in the GOSI-applicable earnings wage type, /370. The system cumulates GOSI-applicable earnings in cumulation
class 02. The annual cumulated amount for GOSI-applicable earnings is stored in the cumulation table (CRT).
Example
For a detailed example of the GOSI contribution process, see GOSI Contribution Calculation: Example.
1.1 GOSI Contribution Calculation: Housing Base

The GOSI-applicable earnings are stored in /370, which is the sum of the GOSI calculated earnings (/372) and the GOSI-calculated housing base (/660).
This topic explains how the value of /660 is determined.
Depending on the circumstances of an employee, an employees housing allowance or, more commonly, an employee's company-provided housing, can be a
factor in determining the employees GOSI-applicable earnings. The housing-related part of an employees GOSI-applicable earnings is called the housing
base (HB).
Company-Provided Housing
The following figure shows how company-provided housing affects the calculation of housing base of an employees GOSI-applicable earnings:
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How the System Considers Company-Provided Housing in the Calculation of GOSI-Applicable Earnings
The system checks whether the Housing Allowance auto (M710) wage type is registered in the Recurring Payments/Deductions (0014) infotype and proceeds
in the following way:
If the Housing Allowance auto (M710) wage type is registered in the Recurring Payments/Deductions (0014) infotype, the system checks the marital
status of the employee in the Personal Data (0002) infotype.
If the employee is single, the system calculates the housing base as follows:
Housing base equals (Basic Monthly Salary multiplied by the value of constant HOUSS) divided by the value of constant SIAP2.
If the employee is married, the system checks the Personal Data (0002) infotype and determines whether the Family Resides in Saudi Arabia
checkbox is selected.
If the Family Resides in Saudi Arabia checkbox is not selected, the system calculates the housing base as follows:
Housing base equals (Basic Monthly Salary multiplied by the value of constant HOUSS) divided by the value of constant SIAP2.
If the Family Resides in Saudi Arabia checkbox is selected, the system calculates the housing base as follows:
Housing base equals (Basic Monthly Salary multiplied by the value of constant HOUSM) divided by the value of constant SIAP2.
If the Housing Allowance auto (M710) wage type is not registered in the Recurring Payments/Deductions (0014) infotype, the system checks the
Personal Data (0002) infotype to see whether the No Company Housing checkbox is selected. The system then proceeds as follows:
If the No Company Housing checkbox is selected, the system does not include a housing base in the calculation of GOSI-applicable earnings.
If the No Company Housing checkbox is not selected, the housing base is calculated as follows:
Housing base equals (Basic Monthly Salary multiplied by the value of constant SIAP1) divided by the value of constant SIAP2.
The final calculated housing value is stored in /660.
Housing Allowance Paid as Cash to Employee
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In accordance with Saudi Labor Law (based on the legal change announced in February 2015, in SAP Note 2128152
amount to the employee as a housing allowance, the following process occurs:
), if the organization pays a cash
1. The Housing Allowance Advised (M715) wage type is registered in the Recurring Payments/Deductions (0014) infotype.
2. During the housing allowance calculation, in rule SAV9, the system calculates the minimum housing allowance stipulated by GOSI using constant HOUMN.
3. The system then compares the cash value in M715 with the minimum housing allowance and uses the larger of the two, by moving the value to /660.
More Information
1.2 GOSI Contribution Calculation: Basic Monthly Salary

By law, the part of an employees GOSI-applicable earnings that come from the January or hiring months basic monthly salary (BMS) depends on the
employees nationality and whether the employee works in the public or private sector. Saudi Arabia has the following types of social insurance contribution
categories, each with unique contribution rates:
Category I: Saudi nationals, private and public sector

Both the employee and employer contribute a percentage towards the annuity branch. The employer contributes an additional percentage for occupational
hazards. The total contribution is the sum of these three inputs.
Caution
In the following table, the provided contribution rates for Saudi nationals are subject to legal change at any time.
Nationality
Annuity Branch Annuity Branch Unemployment Unemployment

Retirement: ER
Retirement: EE
Contribution ER Contribution EE
Share
Share
Share
Share
Occup. Haz.: ER Total

Share
Min. Base in
SAR
Max. Base in
SAR
Saudi Arabia
9%
2%
1,500
45,000
9%
1%
1%
20%
Note
A legal change, due to come into effect from September 2014, requires an unemployment contribution from affected employees and employers as part of the
Saned Insurance scheme. For details about this legal change and how it affects the GOSI contribution calculation in the system, refer to SAP Note 2018958
.
Category II: GCC nationals, excluding Saudi nationals
Caution
In the following table, the provided contribution rates for non-Saudi GCC nationals are subject to legal change at any time.
Nationals
Annuity Branch: ER
Share
Annuity Branch: EE
Share
Occup. Haz.: ER
Share
Total
Min. Contributory
Wage
Max. Contributory
Wage
Bahrain
Private Sector: 9%
Private Sector: 6%
2%
Private Sector: 17%
Not specified under law
Private Sector: BHD
Public Sector: 9%
Public Sector: 15%
Private Sector: 9%
Private Sector: 11%
4,000
Public Sector: 26%
Public Sector: Not

specified under law
UAE
2%
Private Sector: 22%
Private Sector: OMR

3,000
Public Sector: Not

specified under law
Oman
Private Sector: 9%
Private Sector: 7%
Public Sector: 9%
Public Sector: 13%
Private Sector: 9%
Private Sector: 9.5%
Public Sector: 9%
Public Sector: 9.5%
Private Sector: 9%
Private Sector: 6%
Public Sector: 9%
Public Sector: 6%
2%
Private Sector: 18%
Public Sector: 25%
Public Sector: Not

provided
Kuwait
Qatar
2%
Private Sector: 20.5%
KWD 230
KWD 2,750
Public Sector: 20.5%

2%
17%
Note
For Saudi and GCC nationals, in the case of a midyear hire, an employees initial basic monthly salary and housing allowance earnings are used to calculate
an employees GOSI-applicable earnings.
If the calculated monthly GOSI-applicable earnings exceed the maximum contributory wage or is less than the minimum contributory wage, the system uses
the maximum or minimum amount as the contribution base to calculate GOSI contribution.
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Category III: Expatriates (non-GCC nationals)
Caution
In the following table, the provided contribution rates for non-GCC expatriate employees are subject to legal change at any time.
Nationals
Foreign employees
(expatriates) other than
Annuity Branch: ER
Annuity Branch: EE
Share
Share
Not Applicable
Not Applicable
Occup. Haz.: ER Share
Total
Max. Contributory Wage
2%
2%
SAR 400
GCC nationals
More Information
1.3 GOSI Contribution Calculation: Employee Age

The salary increase percentages that an employee receives between ages 45 and 50 affect the calculation of GOSI-applicable earnings when the employee
turns 50 and older.
The following figure shows how salary increase percentages, together with the age of an employee, affect the calculation of GOSI-applicable earnings:
System Process for Calculating GOSI-Applicable Earnings for Employees Aged 50 and Over
1. The system checks the salary increase that was awarded to an employee when the employee is 50 years old.
2. Depending on the increase percentage, the system takes the following action:
If, at age 50, an employee receives a salary increase greater than 10% of the salary at age 49, the salary from which the GOSI-applicable earnings
are calculated is capped at 110% of the employees salary before the increase was granted. For example, even if an employee who is 50 receives
an increase of 30% (that is, 30% higher than the salary at age 49), the GOSI-applicable earnings at age 50 and over are limited to 110% rather than
130% of the salary at age 49.
If, at age 50, an employee receives an increase lower than 10% (constant GO50L), the system takes the following steps:
1. The system compares the salary at age 50 to the salary at age 45.
2. The system determines whether the salary at 50 is more or less than 150% (constant GO505) of the salary at 45 and proceeds as follows:
If the salary at 50 is less than 150% of the salary at 45, the GOSI-applicable earnings at 50 and later are based on the January salary of
the year when the employee turns 50.
If the salary at 50 is greater than 150% of the salary at 45, the GOSI-applicable earnings at 50 are limited to 150% of the salary at 45.
Integration
To see how the described calculations are made in the system, refer to subschema SIAC and personnel calculation rules SA35 and SA29.
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Note
Rule SA29 checks the Hijri calendar age of an employee before triggering rule SA39. Rule SA39 adjusts the GOSI-applicable earnings (wage type /370)
when the employees Hijri age is 49.
More Information
1.4 GOSI Contribution Calculation: Example

The following scenario shows how the system calculates (GOSI)-applicable earnings at various milestones during the life cycle of a typical employee.
Caution
The scenario is fictitious in nature and is provided for illustrative purposes only. Calculations in the system are employee-specific.
Scenario
Khaled is hired by the ABC Company in March 2012.
Personal Details
Khaleds personal circumstances are as follows:
He is a Saudi national
He is married
His family lives with him
March 2012
When Khaled is hired in March 2012, his salary details are as follows:
Component
Amount in SAR
Basic Monthly Salary
8000
Housing Benefit
8000 x 3 / 12 = 2000
GOSI-applicable earnings in wage type /370
8000 + 2000 = 10000
Based on the specified basic monthly salary percentages for GCC nationals and housing base calculations, the contribution breakdown of this 10000 SAR is
detailed in the following table:
Contribution
Amount in SAR
Employer Annuity Branch
10000 x 9% = 900
Employee Annuity Branch
10000 x 9% = 900
Employer Occupational Hazards
10000 x 2% = 200
Employer Unemployment Contribution
10000 x 1% = 100
Employee Unemployment Contribution
10000 x 1% = 100
Therefore, the final breakdown is as follows:

Description
Amount in SAR
Total Employer Contribution
1200
Total Employee Contribution
1000
Khaleds net pay assuming that no other deductions, such as loan repayments, are
made
100001000 = 9000
April 2012 to December 2012: No Change to Khaleds Salary

GOSI-applicable earnings are calculated either during the month of hire or every January. Because Khaled was hired in March, his GOSI-applicable earnings
and the associated contribution amounts remain unchanged from March through to the end of December 2012. The GOSI-applicable earnings wage type (/370)
that was used in the March 2012 payroll continues to be used from April through to December.
January 2013: No Change to Khaleds Salary

Khaled does not receive a salary increase in 2013. Therefore, when the system recalculates his GOSI-applicable earnings in January 2013, the contribution
amounts remain unchanged.
Although Khaled earns the same amount of money in January 2013 as he earned in March 2012, the GOSI-applicable earnings wage type (/370) now reflects
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the January 2013 payroll run rather than the March 2012 payroll run.
March 2015: Khaled Receives a Salary Increase

In March 2015, Khaled receives his first salary increase since joining the ABC Company . His new earnings are as follows:
Component
Amount in SAR
10000
Housing Benefit
10000 x 3 / 12 = 2500
8000 + 2000 = 10000
Even though Khaled received a salary increase, his GOSI-applicable earnings amount remains unchanged. This is because the GOSI-applicable earnings
amount is recalculated only in January or in the month of hire. So, in Khaleds case, his GOSI-applicable earnings will not be recalculated until January 2016.
January 2016: Khaleds GOSI-Applicable Earnings Amount is Recalculated

Because GOSI-Applicable Earnings amounts are recalculated every January, the system adjusts Khaleds figures as follows:
Component
Amount in SAR
10000
Housing Benefit
10000 x 3 / 12 = 2500
10000 + 2500 = 12500
Contribution
Amount in SAR
12500 x 9% = 1125
12500 x 9% = 1125
12500 x 2% = 250
12500 x 1% = 125
12500 x 1% = 125

Description
Amount in SAR
1500
1250
125001250 = 11250
made
January 2020: Khaled Turns 45 Years Old (Gregorian Calendar) / 44 Years Old (Hijri Calendar)
When Khaled turns 45 years old by the Gregorian calendar, or 44 years old by the Hijri calendar, the GOSI-applicable earnings wage type changes every
January in line with Khaleds birthday:
Date
Khaleds Age (by Gregorian Calendar)
Changes to GOSI-Applicable Earnings Wage Types
January 2020
45
/370 to /375
January 2021
46
/375 to /376
January 2022
47
/370 to /375
/376 to /377
/375 to /376
/370 to /375
January 2023
48
/377 to /378
/376 to /377
/375 to /376
/370 to /375
January 2024
49
/378 to /379
/377 to /378
/376 to /377
/375 to /376
/370 to /375
Note
For more information about these wage types, in table V_512W_D, refer to the relevant wage type documentation by choosing the
( Information )
pushbutton.
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Recommendation
In this example, Khaled has worked for the ABC Company throughout his forties and into his fifties. Therefore, the system can automatically retrieve his
salary information from when he was 45, 46, 47, 48, and 49. However, if an employee in your organization worked for another organization for part or all of the
period between ages 45 and 50, we recommend that you maintain the employees salary for those years manually in the appropriate wage types.
January 2025: Khaled Turns 50 Years Old (Gregorian Calendar) / 49 Years Old (Hijri Calendar)
If Khaled receives a salary increase when he turns 50 years old by the Gregorian calendar, or 49 years old by the Hijri calendar, his GOSI-applicable earnings
amount can be affected by the calculation logic for employee age. The following examples show how the salary increase percentage affects his GOSI-applicable
earnings amount:
Example 1: Khaled Receives a 20% Salary Increase
In January 2025, Khaled receives a 20% salary increase, so, using the calculation logic for employee age, the system adjusts his figures as follows:
Component
Amount in SAR
12000
Housing Benefit
12000 x 3 / 12 = 3000
15000 SAR, because Khaleds salary at age 50 is less than 150% of his salary at 45.
Contribution
Amount in SAR
15000 x 9% = 1350
15000 x 9% = 1350
15000 x 2% = 300
15000 x 1% = 150
15000 x 1% = 150

Description
Amount in SAR
1800
1500
150001500 = 13500
made
Example 2: Khaled Receives a 60% Salary Increase

In January 2025, Khaled receives a 60% salary increase, so, using the calculation logic for employee age, the system adjusts his figures as follows:
Component
Amount in SAR
16000
Housing Benefit
16000 x 3 / 12 = 4000
18750 SAR because Khaleds salary at age 50 is more than 150% of his salary at 45,
and is therefore capped at 150% of the amount of wage type /379.
Contribution
Amount in SAR
18750 x 9% = 1687.50
18750 x 9% = 1687.50
18750 x 2% = 375
18750 x 1% = 187.50
18750 x 1% = 187.50

Description
Amount in SAR
2250
1875
20000 1875 = 18125
made
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March 2030: Khaled is Terminated

Whether Khaled and the ABC Company must make GOSI contributions during the month when Khaled is terminated depends on when in the month the
termination takes place.
If Khaled is terminated before 31 March, no GOSI contributions are made.
If Khaled is terminated on 31 March, GOSI contributions are made.
More Information
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GOSI Contribution Calculation: Overview

PDF download from SAP Help Portal:

1 GOSI Contribution Calculation: Overview

GOSI Contribution Calculation: Housing Base

GOSI Contribution Calculation: Basic Monthly Salary

The employees age.

GOSI Contribution Calculation: Employee Age

Payroll: Saudi Arabia

1.1 GOSI Contribution Calculation: Housing Base

Housing Allowance Paid as Cash to Employee

), if the organization pays a cash

1.2 GOSI Contribution Calculation: Basic Monthly Salary

Category I: Saudi nationals, private and public sector

Annuity Branch Annuity Branch Unemployment Unemployment

Occup. Haz.: ER Total

Category II: GCC nationals, excluding Saudi nationals

Private Sector: 17%

Not specified under law

Private Sector: BHD

Public Sector: 15%

Private Sector: 11%

Public Sector: Not

Private Sector: 22%

Not specified under law

Not specified under law

Not specified under law

Private Sector: OMR

Public Sector: Not

Public Sector: 13%

Private Sector: 9.5%

Public Sector: 9.5%

Private Sector: 18%

Public Sector: 25%

Public Sector: Not

Private Sector: 20.5%

Not specified under law

Not specified under law

Public Sector: 20.5%

Category III: Expatriates (non-GCC nationals)

Occup. Haz.: ER Share

Max. Contributory Wage

1.3 GOSI Contribution Calculation: Employee Age

1.4 GOSI Contribution Calculation: Example

Basic Monthly Salary

GOSI-applicable earnings in wage type /370

8000 + 2000 = 10000

Employer Annuity Branch

Employee Annuity Branch

Employer Occupational Hazards

Employer Unemployment Contribution

Employee Unemployment Contribution

Therefore, the final breakdown is as follows:

Total Employer Contribution

Total Employee Contribution

April 2012 to December 2012: No Change to Khaleds Salary

January 2013: No Change to Khaleds Salary

March 2015: Khaled Receives a Salary Increase

Basic Monthly Salary

GOSI-applicable earnings in wage type /370

8000 + 2000 = 10000

January 2016: Khaleds GOSI-Applicable Earnings Amount is Recalculated

Basic Monthly Salary

GOSI-applicable earnings in wage type /370

10000 + 2500 = 12500