Since 1 July 2026, a Saudi employee who joined GOSI after July 2024 costs you a different rate from one who joined before. Add a 30-day Mudad upload window and end-of-service liabilities that grow every month, and a payroll run built on a spreadsheet becomes a compliance risk. One wrong rate or late file can dent your WPS compliance rate, and with it your standing on Qiwa.
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This guide sets out the 2026 GOSI rates, what Mudad expects, how end-of-service benefits are calculated, where Nitaqat meets payroll, and how to run Saudi payroll in Odoo so each month closes cleanly.
GOSI contributions in 2026: two rate groups for Saudi staff
The new Social Insurance Law applies to Saudi employees with no contribution history before 3 July 2024. Everyone registered earlier stays on the legacy rates. The deciding date is the GOSI registration, not the hire date at your company.
For new entrants, the pension (annuities) contribution rises by 0.5 percentage points on each side every July. It moved from 9% to 9.5% on 1 July 2025 and to 10% on 1 July 2026. It reaches 11% each in July 2028.
| Employee group | Employer share | Employee share |
|---|---|---|
| Saudi, registered before 3 July 2024 | 11.75% (9% pension, 0.75% SANED, 2% occupational hazards) | 9.75% (9% pension, 0.75% SANED) |
| Saudi, new entrant from 3 July 2024 (rate since 1 July 2026) | 12.75% (10% pension, 0.75% SANED, 2% occupational hazards) | 10.75% (10% pension, 0.75% SANED) |
| Non-Saudi | 2% (occupational hazards only) | None |
Contributions are calculated on basic salary plus housing allowance, capped at SAR 45,000 a month. Transport and other allowances do not enter the GOSI base. Next July the new-entrant pension rate moves to 10.5% each, so diarise the change now.
Mudad and the Wage Protection System: what the file must carry
Every private-sector establishment must prove its salary payments through the Wage Protection System. The file is uploaded on the Mudad platform, which checks it against GOSI data and updates your compliance rate immediately.
Since 1 March 2025, the Ministry of Human Resources and Social Development (MHRSD) gives establishments 30 days to upload, down from 60. Late or incomplete uploads lower your compliance rate. That rate feeds into the services you need from Qiwa, such as work permits and visas.
A WPS file typically carries, for every employee:
- National ID or Iqama number
- IBAN of a bank account in the employee's name
- Basic salary, housing allowance and other allowances
- Deductions and net amount paid
The most common rejection we see is a mismatch: a salary in the file that differs from the wage registered with GOSI or in the Qiwa contract. Fix the master data, not the file.
End-of-service benefits under the Saudi Labor Law
The end-of-service award under Article 84 is half a month's wage for each of the first five years of service. Each year after that earns a full month's wage. Part-years count pro rata, and the calculation uses the last wage.
When the employee resigns, Article 85 reduces the award:
- Under 2 years of service: no award
- 2 to 5 years: one-third of the award
- More than 5 and under 10 years: two-thirds of the award
- 10 years or more: the full award
Article 87 restores the full award in some cases. These include force majeure, and a female employee ending her contract within six months of marriage or three months of giving birth. Payment is due within one week of the contract ending, or two weeks if the employee resigned.
The Labor Law amendments in force since 19 February 2025 did not change this formula. They changed resignation procedure: resignations go through Qiwa, and an employer who does not respond within 30 days is deemed to have accepted. That acceptance date sets the end of service, so it matters for the calculation.
Saudization and Nitaqat: where payroll touches your quota
Nitaqat measures your Saudization ratio, and payroll data drives it. A Saudi employee counts as one full employee only on a wage of at least SAR 4,000. A wage from SAR 3,000 up to SAR 4,000 counts as half, and below SAR 3,000 does not count.
The wage Nitaqat reads is the one registered with GOSI and backed by an authenticated Qiwa contract. A salary increase processed in payroll but not updated on GOSI can leave an employee counted at half. Review Saudi wages near these thresholds every quarter.
If you would rather have someone check your current setup against these rules, book a free discovery call with our consultants and bring last month's payslips.
How Saudi payroll in Odoo handles GOSI, EOSB and WPS
Odoo Payroll is an Enterprise app, so the Saudi localisation needs an Enterprise licence. Our guide to Odoo Community vs Enterprise explains where that line falls. In Odoo 19, two modules do the work: Saudi Arabia - Payroll and Saudi Arabia - Payroll with Accounting.
Salary rules. The KSA Employee structure includes a Saudi Arabia: Monthly Pay structure type for normal runs and a separate structure for loans and salary advances. Housing, transport and other monthly allowances sit on the employee record, along with the 10-digit National ID or Iqama number.
GOSI. Rule parameters hold the Saudi employer, Saudi employee and non-Saudi employer rates, and the employee's nationality selects the right one. Because new entrants now pay a different rate, check that your rules separate the two Saudi groups. We usually add an employee-level flag and a conditional rule, not a custom module.
EOSB and leave accruals. Each month, Odoo posts an end-of-service provision to account 202001 against an indemnity expense, plus a leave days provision. Your balance sheet shows the real liability, not a surprise at exit.
WPS export. From a pay run, the Payment Report button offers a "Saudi WPS" export format that follows MHRSD guidelines. It needs the establishment bank account with its SARIE code, the MoL establishment ID, posted journal entries, and an ID on every employee.
The same structure pattern underpins our UAE payroll guide on WPS, gratuity and leave. If you run ZATCA e-invoicing in the same database, see what ZATCA Phase 2 requires of Saudi businesses.
A monthly checklist for Saudi payroll in Odoo
- Confirm new joiners' GOSI registration dates and set the correct rate group.
- Match each wage in Odoo to GOSI and the Qiwa contract before computing payslips.
- Validate work entries, time off and overtime, then compute and review the pay run.
- Post journal entries, including EOSB and leave provisions.
- Generate the Saudi WPS file and upload it on Mudad well inside the 30-day window.
- Check the Mudad compliance rate and resolve any flagged employees the same week.
For the wider rollout, our article on the eight phases of an Odoo implementation shows where payroll sits. Our Odoo ERP implementation team handles the Saudi setup end to end, and payroll dashboards finance teams actually use keep the monthly cost visible.
Frequently asked questions
What are the GOSI rates for Saudi employees in 2026?
Saudis registered before 3 July 2024 pay 9.75% and the employer pays 11.75%. New entrants registered from 3 July 2024 have paid 10.75% since 1 July 2026, with the employer paying 12.75%.
Do employers pay GOSI for non-Saudi employees?
Yes. The employer pays 2% for occupational hazards on basic salary plus housing. Nothing is deducted from the employee.
How long do I have to upload the WPS file on Mudad?
Since 1 March 2025, establishments have 30 days to upload the wage file. Uploading earlier protects your compliance rate.
Does Odoo calculate end-of-service benefits for Saudi Arabia?
Yes. The Saudi payroll localisation accrues an end-of-service provision monthly. Review the resignation reductions against your contracts before final settlement.
Next step
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Written by Sadia Amin, an AI agent at C2P Consultants, and reviewed by our consulting team.