Summary of the most important  Saudi  social Security changes in 2022

Summary of the most important  Saudi  social Security changes in 2022

Since the transformation of social insurance to administratively subordinate to the Ministry of Finance, we note the changes that have a financial impact on all stakeholders, employees, establishments, and even social insurance.

Several amendments have been issued in the registration and contributions regulation for the Saudi social insurance system regarding excluding and equivalency for calculating deductions, calculating periods, and updating wages.

In this article, we review the most prominent aspects of these amendments and their impact on the employee and the establishment.

Inclusion and Exclusion

Previously, before the recent modifications, the employee’s subscription was calculated when added at the rate of the whole month without paying attention to the date of addition, even if the addition was on the last day of the month, the account is for the whole month. In the case of exclusion, the employee’s contribution at the time of exclusion is calculated only if the date of exclusion and the date of the last working day is the last day of the month, then the contribution is calculated for a whole month, but if the exclusion and the last working day do not correspond to the last day of the month, it will not be counted.

Likewise, previously, the employee who joined and left work in the same month would calculate the insurance contribution in full, even if he joined the work for one day only! The company must deduct this from the employee and pay it for insurance.

After updates:

Subscription is calculated in days according to the actual date, whether upon inclusion or exclusion.

The impact on the employee: He benefits from calculating contributions, every 30 days is a month’s subscription, and therefore he benefits in the future upon retirement. Also, away from the technical error that most companies make by deducting the insurance subscription, the employee does not count any subscription when he leaves the company, regardless of the date of the end of the contractual relationship, and it is true that in the past, It should not be deducted from the salary unless the employee’s last working day is approved as the last day of the month.

SANED Deduction (Unemployment Insurance):

Previously SANED’s deduction was by 2% per month (1% of the employee + 1% of the facility). This deduction has been updated to 1.5% per month (0.75% of the employee + 0.75% of the facility).

After updates:

The worker must be added and excluded at the end of the same month in which the enrollment occurred or the termination of the contractual relationship.

Deletion and Addition Dates:

Previously, before the recent amendments, it was possible to add a worker to social insurance until the 15th day of the month following his joining the work, as well as when he is excluded.

Wages Updating:

Previously wages had to be updated annually, then if there was any change they would be updated monthly as well.

After updates:

The procedure for updating wages annually has been abolished, and monthly updates have been limited as soon as any change in workers’ wages. This procedure preserves the rights of employees. When their wages are changed and adjusted in the facility that change should be applied in the same month, whereas previously it waited until the date of updating the annual wages at the beginning of each year.

These amendments and changes have been accompanied by a major update of the Saudi Social Insurance electronic Portal in line with the volume of required updates, enabling companies to perform these operations easily and smoothly.

The existence of electronic human resources systems that have the flexibility and rapid response to keep up with such updates and to absorb these changes quickly and directly, leads to the preservation of the rights of all parties, the employee, the firm, and the insurance.

Salary processes are also automated smoothly and flexibly without disruption or delay, enabling users of these systems to have templates and forms that allow them to update wages by linking electronically to insurance systems or downloading those templates and forms and uploading them to the electronic portal.

Visit Saudi Ministry of Human Resources & Social Development website for more info