Learn how much social insurance is deducted from salary in Saudi Arabia, how it is calculated, and how contributions are shared between employees and employers.
How Much Is Social Insurance Deducted from Salary in Saudi Arabia? A Detailed Guide for Employees and Employers
If you work in the private sector, you may have noticed a monthly deduction on your payslip under social insurance. This may leave you wondering: How much is social insurance deducted from salary? Is it calculated based on the basic salary or the total salary? And why can the deduction vary from one employee to another?
Social insurance in Saudi Arabia provides financial protection for employees and their families through programs such as pensions and compensation when covered circumstances occur. A specific percentage is deducted from the contributory wage, while the employer pays another portion of the contributions.
In this guide, you will learn:
- How much social insurance is deducted from salary.
- How social insurance deductions are calculated.
- The difference between employee and employer contributions.
- What is meant by the contributory wage.
- Practical examples of how deductions are calculated.
- Common mistakes related to social insurance deductions.
What Is Social Insurance in Saudi Arabia?
Social insurance is a system designed to provide social protection for subscribers and their families when certain covered circumstances occur, such as retirement, occupational injuries, or unemployment under the applicable programs.
The system is funded through monthly contributions paid on behalf of employees. Employees pay a portion of these contributions, while employers pay another portion according to the percentages established by the applicable regulations.
Social insurance is not limited to retirement pensions. It also includes other programs designed to provide financial protection to subscribers in different circumstances.
How Much Is Social Insurance Deducted from Salary?
This is one of the most common questions among new employees and employers.
Contribution rates vary depending on the insurance program and employee category. Therefore, employees do not bear the entire contribution; they pay one portion while the employer covers another.
The actual deduction is also based on the contributory wage, rather than necessarily being calculated on the employee's total monthly earnings.
According to the contribution rates applicable in August 2026, a Saudi subscriber who is not covered by the new system contributes 9% to the Annuities Branch and 0.75% to SANED.
For subscribers covered by the new Social Insurance Law, the current contribution to the Annuities Branch is 10%, in addition to 0.75% for SANED, with the statutory gradual increase continuing until the Annuities contribution reaches 11%.
Note: The deduction percentage varies according to the system applicable to the subscriber. Saudi subscribers who are not covered by the new system contribute 9% to the Annuities Branch plus 0.75% to SANED. For subscribers covered by the new Social Insurance Law, the Annuities contribution gradually increases until it reaches 11%, in addition to 0.75% for SANED.
How Is Social Insurance Deducted from Salary?
Social insurance contributions are calculated based on the contributory wage, not necessarily on every amount an employee receives.
This explains why two employees with similar total salaries may have different social insurance deductions.
What Is the Contributory Wage?
The contributory wage is the wage used as the basis for calculating social insurance contributions.
It includes the basic wage or salary and housing allowance in accordance with the applicable regulations. Certain commissions and percentages from sales or profits may also be treated as part of the basic wage under the regulations.
Therefore, social insurance deductions are not always calculated based on the total salary shown on the employee's payslip.
Steps to Calculate the Social Insurance Deduction
To calculate the deduction in a simple way:
- Determine the contributory wage.
- Apply the employee's applicable contribution rate.
- Calculate the employer's contribution separately.
- Deduct only the employee's share from the salary.
This calculation can help you estimate your monthly social insurance deduction before receiving your salary.
Practical Examples of Social Insurance Deductions
Example 1: Employee Earning SAR 6,000
If the contributory wage is SAR 6,000 for a Saudi subscriber who is not covered by the new system, the employee's monthly contribution would be:
SAR 585 per month
This consists of 9% for the Annuities Branch and 0.75% for SANED.
Example 2: Employee Earning SAR 10,000
For a contributory wage of SAR 10,000, the contribution for a Saudi subscriber who is not covered by the new system would be:
SAR 975 per month
This consists of 9% for the Annuities Branch and 0.75% for SANED.
Example 3: Employee Earning SAR 15,000
If the contributory wage is SAR 15,000, the employee's contribution would be:
SAR 1,462.50 per month
This example applies to a Saudi subscriber who is not covered by the new system, subject to the applicable system and maximum contributory wage.
Therefore, knowing how much social insurance is deducted from salary is not enough on its own. You also need to know the wage to which the contribution rate is applied.
💚 If you need any help or have questions, the Tree team is ready to assist you.
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Does the Social Insurance Deduction Vary by Employee Type?
Yes. Social insurance contributions vary depending on the employee category and the system applicable to them.
For Saudi employees, contributions to the Annuities Branch and SANED are applied according to the applicable rates.
For non-Saudi employees, the Annuities Branch and SANED do not apply. Instead, they are covered under the Occupational Hazards Branch at a rate of 2% of the contributory wage, which is fully paid by the employer and is not deducted from the employee's salary.
Therefore, registered social insurance contributions can vary from one employee to another depending on nationality, the applicable system, and the insurance branches that apply.
Who Pays Social Insurance Contributions?
The way social insurance contributions are calculated can vary based on several factors, including:
- Employee nationality, whether Saudi or non-Saudi.
- Type of insurance program.
- Nature of the employer.
- Regulations applicable to the employee category.
For Saudi employees, the employee pays part of the applicable contributions, while the employer pays the portion assigned to them under the system.
The Occupational Hazards Branch contribution is fully paid by the employer.
For non-Saudi employees, the Occupational Hazards Branch applies, and its contribution is fully paid by the employer without being deducted from the employee's salary.
Employee vs. Employer Contributions
Is Social Insurance Deducted from Basic Salary or Gross Salary?
One of the most common questions employees ask is whether social insurance is calculated based on the basic salary or gross salary.
The deduction is calculated based on the contributory wage, which is not necessarily the same as the employee's total salary.
The contributory wage may differ from gross salary because certain allowances or benefits may not be included in the insurable wage under the applicable regulations.
As a result, your actual social insurance deduction may be different from what you would expect if you simply applied the contribution rate to your gross salary.
Does Social Insurance Affect Net Salary?
Yes. The employee's share of social insurance contributions is deducted from their monthly salary, which means it affects the net salary received after deductions.
In simple terms:
- Gross salary: Total earnings before deductions.
- Social insurance deduction: Part of the employee's monthly deductions.
- Net salary: The amount the employee receives after social insurance and any other applicable deductions.
Therefore, employees receiving the same gross salary may have different net salaries if their registered data or contributory wages differ.
What Is the Minimum and Maximum Contributory Wage?
Saudi social insurance regulations establish limits for the wage subject to contributions under the applicable rules.
The maximum contributory wage is SAR 45,000 per month.
These limits are used when calculating monthly contributions. Therefore, if an employee's salary exceeds the approved maximum, contributions may not be calculated on the full salary.
Because these limits may be updated, it is recommended to check the official regulations or verify the contribution data registered with social insurance.
When Does Social Insurance Deduction Start?
Social insurance deductions generally begin after the employee is registered in the social insurance system and the employer completes the required registration procedures.
The deduction is linked to the subscription start date, so it may appear in the first salary following registration or according to the employer's payroll cycle.
If you notice that no contribution has been deducted, or the amount differs from what you expected, it is recommended to contact your HR department or verify your registered subscription information.
Can You Calculate Your Social Insurance Deduction Before Receiving Your Salary?
Yes. You can estimate your social insurance deduction before payday if you know:
- Your contributory wage.
- The contribution rate applicable to you.
- Your salary information registered with social insurance.
You can then use an electronic calculator or calculate the amount manually to estimate the deduction and your expected net salary.
💚 If you need advice about insurance or would like to learn more about the options available to you, the Tree team is ready to help.
📞 8001240505
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How Can You Check Your Social Insurance Subscription?
You can check your subscription status through the available electronic services to ensure your registered information and contributory wage are correct.
It is recommended to review:
- Subscription status.
- Registration date.
- Contributory wage.
- Registered employer.
- Any updates to your information.
Checking these details regularly can help identify differences in deductions or registered information at an early stage.
Common Social Insurance Deduction Mistakes
Some employees may notice differences in their deductions due to simple errors, such as:
- Registering a salary different from the actual salary.
- Failing to update employee information.
- Incorrectly calculating the contributory wage.
- Assuming contributions are calculated on gross salary rather than the contributory wage.
- Failing to review subscription information after a salary or job change.
For this reason, employees should periodically review their social insurance information to ensure their contributions are calculated correctly.
What Is the Difference Between Social Insurance and Health Insurance?
Social insurance and health insurance are sometimes confused, but they serve different purposes.
Social insurance provides social protection to subscribers and their families through benefits established by the applicable regulations. These can include pensions, occupational hazard benefits, and SANED unemployment insurance for eligible categories.
Health insurance, on the other hand, is intended to cover healthcare expenses such as medical consultations, treatment, medications, and hospitalization according to the terms of the health insurance policy.
Therefore, social insurance deductions from salary are not a substitute for health insurance, as each system provides different benefits.
Can You Object to a Social Insurance Deduction?
If an employee notices a discrepancy in the deduction amount or the wage registered with social insurance, they can first contact their employer to verify the information.
If the issue continues, they can submit an inquiry or objection through the official social insurance channels and provide any required information or supporting documents.
Regularly reviewing your payslip and subscription information can help ensure deductions are accurate.
Frequently Asked Questions
How much is social insurance deducted from salary in Saudi Arabia?
The percentage varies according to the system applicable to the subscriber. Saudi subscribers not covered by the new system contribute 9% to the Annuities Branch plus 0.75% to SANED. For subscribers covered by the new system, the Annuities contribution gradually increases until it reaches 11%, in addition to 0.75% for SANED.
How do I calculate social insurance deductions from salary?
The deduction is calculated based on the contributory wage by applying the employee's applicable contribution percentage.
Is social insurance deducted from the basic salary?
It is not necessarily calculated on the basic salary alone. Contributions are calculated based on the contributory wage as defined by the applicable social insurance regulations.
Do contribution rates differ between Saudi and non-Saudi employees?
Yes. Contributions may differ depending on nationality, applicable insurance programs, and regulations.
How much does the employer pay for social insurance?
Employers pay their required contribution according to the applicable system. They also fully cover the 2% Occupational Hazards Branch contribution based on the contributory wage.
Does social insurance affect net salary?
Yes. The employee's share of social insurance contributions is deducted from their monthly salary and therefore reduces the net salary received.
Can social insurance contributions be refunded?
This depends on the individual case and applicable regulations. It is recommended to refer to the social insurance authority for eligibility requirements and procedures.
How can I find my social insurance deduction amount?
You can check the deduction on your payslip, use electronic social insurance calculators, or calculate the applicable percentage based on your contributory wage.
Are social insurance contributions deducted from allowances?
Contributions are calculated based on the components included in the contributory wage under the applicable regulations. These include the basic wage or salary and housing allowance according to the approved rules.
How can I check my social insurance subscription?
You can check your subscription status and registered information through the electronic social insurance services, including your registered wage, employer, and subscription date.
Conclusion
Now that you know how much social insurance is deducted from salary in Saudi Arabia, it should be easier to understand why deduction amounts vary between employees, how contributions are calculated, and what portions are paid by employees and employers.
To make sure your deductions are correct:
- Know your contributory wage.
- Understand how your social insurance deduction is calculated.
- Review your subscription information regularly.
- Make sure your registered salary is correct.
- Compare your gross and net salary after deductions.
The more accurately your information is registered and the better you understand how contributions are calculated, the easier it will be to monitor your social insurance deductions and ensure they are applied correctly.
💚 Have questions about insurance or want to explore insurance solutions that suit your needs?
The Tree Insurance team is ready to answer your questions and help you choose the right solution.
📞 8001240505
📧 wecare@tree.com.sa
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