Who does the new law apply to: new entrants vs existing contributors
The regulatory framework establishes a clear demarcation between two distinct groups:
New Entrants: Individuals who joined the Saudi labor market and registered with GOSI for the first time on or after 3 July 2024. They are subject to the full provisions of the new law, including the 65-year retirement threshold.
Existing Contributors: Individuals registered with GOSI prior to 3 July 2024 generally remain under legacy pension rules, subject to specific transitional age adjustments.
Retirement age benchmarks and gradual phase-in
Statutory retirement ages depend strictly on an employee’s age and accrued service record as of July 2024:
1. Protected Existing Contributors: Workers who were 50 Hijri years or older, or who had completed 20 or more years of contributions by July 2024, retain their original retirement age (typically 60 Hijri years).
2. Transition Group: Workers who were under 50 years of age and had less than 20 years of contributions are subject to a gradual increase in retirement age, scaling progressively from 58 to 65 Gregorian years based on age at enactment.
3. New Entrants: The statutory retirement age is fixed at 65 Gregorian years (with early retirement requiring at least 30 years of registered contributions).
GOSI contribution rates: Saudi vs expatriate employees
GOSI contributions are divided across three operational branches: Annuities (Pensions), Occupational Hazards, and Unemployment Insurance (SANED):
For Expatriate (Non-Saudi) Workers:
Expatriate employees do not contribute to the Annuities or SANED branches. Employers pay a mandatory 2% contribution for Occupational Hazards on the worker's contributory wage (basic salary + housing allowance). Zero deductions are taken from the expatriate worker’s pay.
For Saudi Employees (New System Rates):
The pension contribution rate for new entrants increases annually by 0.5% each July. As of mid-2026, the combined monthly contribution stands at 23.5% of contributory wage:
- Pension (Annuities): 10% Employee + 10% Employer
- Occupational Hazards: 2% Employer
- SANED (Unemployment): 0.75% Employee + 0.75% Employer
The maximum monthly contributory wage cap across all categories is SAR 45,000.
Vesting periods and pension entitlement calculations
Under the new system, qualifying for a retirement pension upon reaching statutory retirement age requires at least 180 months (15 years) of registered contributions, compared to 120 months under the legacy framework.
Pensions are calculated based on the average contributory wage across the best 180 months of service, protecting workers against end-of-career wage compression.