Saudi Arabia retirement maternity

The Saudi Arabian government has updated the retirement age for employees and increased pension contributions and maternity leave.

Its amended Social Insurance Law, which is managed by the Saudi Arabian General Organisation for Social Insurance, now applies to both public and private sector employment to make it easier for employees to move between sectors. It is applicable to Saudi employees, but not to expatriate workers.

New employees with no previous insured employment will now be able to retire at the age of 65 based on the Gregorian calendar, an increase from 60 based on the Islamic Hijri calendar, which equates to around 58 in Gregorian. They will be able to take early retirement after turning 55 or after 30 years of insured employment as calculated by the Gregorian calendar.

Retirement benefits will now be calculated as 2.25% instead of 2.5% of a claimant’s average monthly covered earnings over their final two years, multiplied by the number of years of insured employment. Employer and employee social security retirement contributions will both increase gradually from 9% of earnings to 11%, with annual increases of 0.5 percentage points starting in 2025.

For employees who are below age 50 according to the Hijri calendar and have less than 20 years of insured employment, the normal retirement age has increased by four months per year and early retirement age will increase by 12 months per year from 2025.

Those who are aged 50 and above according to the Hijri calendar, or who have at least 20 years of insured employment, will see maternity leave extended from 10 weeks to three months. This will be paid by social security rather than the employer, provided the claimant has at least 12 months of insured employment in the 36 months prior to birth, and is applicable to Saudi and non-Saudi employees.

The General Organisation for Social Insurance was contacted for comment prior to publication.