Saudi Arabia new insurance law for public, private employees

RIYADH: Saudi Arabia has implemented a new insurance law that applies exclusively to newly hired civil employees entering the public or private sectors, according to a report by Saudi Gazette.

The provisions of the revised Social Insurance Law, issued through a Royal Decree on July 2, 2024, officially came into effect on Tuesday, July 1, 2025. The General Organization for Social Insurance (GOSI) announced the enforcement of the new law.

The law applies only to new employees who have no prior contribution periods under the existing Civil Pension Law or Social Insurance Law.

One key change introduced under the amended law is a gradual increase in the statutory retirement age, which will now range from 58 to 65 years (Gregorian calendar). However, GOSI clarified that there will be no changes to the benefits of current subscribers.

The new system aims to expand insurance coverage, streamline job transitions between public and private sectors, and unify social insurance provisions under a single legal framework.

Additionally, the law introduces a gradual increase in the pension subscription rate for new enrollees, starting from the second year of implementation. The rate will rise by 0.5% annually until the fifth year, reaching a total increase of 2%. As a result, both the subscriber and employer will contribute 11% instead of the current 9%.

GOSI emphasized that employers must pay insurance contributions on time to ensure the protection of employees’ rights under the system.

Another significant feature taking effect on July 1 is the maternity benefit. Under this provision, GOSI will provide maternity compensation for three months to female subscribers—both Saudi and non-Saudi—upon childbirth.

Saudi Arabia enforces new insurance law for public, private employees