If you're wondering why the social insurance deduction on your payslip has started rising gradually, the reason is the new Social Insurance Law (M/273 of 1445H), which replaced the old law (M/33 of 1421H) and raised the pension-branch contribution rate from 18% to 22% of your wage — not all at once, but across five precisely defined annual stages.
📜 The Full Gradual Increase Schedule
Article 15 of the Law explicitly sets out a precise timetable, measured in months from the date the Law takes effect:
"a) Contributions during the twelve months from the date the Law takes effect are set at (18%). b) Contributions from the month following the lapse of twelve months from the date the Law takes effect are set at (19%). c) ... twenty-four months ... at (20%). d) ... thirty-six months ... at (21%). e) ... forty-eight months ... at (22%)."
- Year 1 (months 1-12): contribution rate is 18% of the wage subject to contribution.
- Year 2 (months 13-24): rises to 19%.
- Year 3 (months 25-36): rises to 20%.
- Year 4 (months 37-48): rises to 21%.
- From month 49 onward: settles permanently at 22%.
⚖️ Who Bears the Increase? Always Split Evenly
The important news for you as an employee: this increase does not fall on you alone at any of the five stages.
"The employer shall bear (50%) and the subscriber shall bear (50%) of the contributions referred to in paragraph (1) of this clause, with respect to mandatory contributions."
In other words: when the overall rate reaches 22% in year five, what is actually deducted from your salary is only 11%, while the employer pays the other 11% from their own pocket — at every one of the five stages, not just once the final rate is reached.
Yes — Article 8 of the Law sets the maximum wage subject to contribution at 45,000 SAR per month. If your salary is higher than that, the contribution rate (18% to 22% depending on the stage) is calculated on 45,000 SAR only, not on your full salary. This ceiling is subject to future review by Council of Ministers decision based on actuarial studies.
✅ What Does This Mean Practically for You?
- Regularly check your payslip (WPS) to make sure the deduction rate matches the correct time stage from the Law's effective date.
- Remember the increase is always split evenly — if you notice a deduction exceeding half the rate set for the stage, check with HR.
- If your salary exceeds 45,000 SAR per month, calculate your contribution based on this ceiling, not your actual salary.
- Use Sanad to understand how this increase affects your net salary and future entitlements.
- Social Insurance Law, Royal Decree No. M/273 dated 26/12/1445H — Articles 8 and 15