Article 26 of the Saudi Social Insurance Law
المادة 26 من نظام التأمينات الاجتماعية · الباب الثاني: فرع المعاشات
The article provides that the pension is calculated on the average of the highest wages subject to contribution over 180 months, and allows the Board of Directors to increase pensions with regard to the consumer price index and the actuarial study results.
Official text (Arabic)
This article has not been amended since the law was issued.
1- يحتسب المعاش على أساس متوسط أعلى الأجور أو الرواتب الخاضعة للاشتراك عن (180) شهراً من مدد الاشتراك.
2- يجوز -بقرار من مجلس الإدارة وفقاً للأحكام التي يحددها - زيادة المعاشات للمشتركين وأفراد العائلة، أخذاً بالاعتبار -كلياً أو جزئياً- مؤشر أسعار المستهلك المعتمد من الجهة المختصة ونتائج الدراسة الاكتوارية.
This is the official Arabic wording, the only legally binding version. We do not translate the law itself; the explanation below is ours. Official source: Bureau of Experts at the Council of Ministers
Article 26 explained in plain English
This article contains two provisions that matter to every pensioner:
First: the basis for calculating the pension
The pension is calculated on the basis of the average of the highest wages or salaries subject to contribution over 180 months of contribution periods, which is equivalent to 15 years. The word "highest" means the calculation uses the best-paid months, not necessarily the last 180 months.
This average is the figure that enters the pension calculation formulas, so the higher the registered wages in those months, the higher the average.
Second: increasing pensions
By a decision of the Board of Directors, and under the provisions it sets, pensions may be increased for subscribers and family members, taking into account, in whole or in part:
- The consumer price index approved by the competent authority.
- The results of the actuarial study.
The increase here is discretionary, by decision of the Board of Directors, and is not an automatic annual increase under the text of the article; the article also does not set its percentage.
This article is linked to Article 25, which provides lump-sum compensation or monthly installments for someone not entitled to a pension, and Article 27, which gives someone who has lost Saudi nationality a lump-sum compensation. Anyone who believes their average wage was calculated incorrectly can contact the Institution or consult a lawyer specialized in social insurance matters.
Practical example
Tariq worked for 25 years, and his salaries varied over that period. Under this article, his pension is calculated on the basis of the average of the highest wages subject to contribution over 180 months, not on the average of his whole period.
Translated from our Arabic explanation with machine assistance. For guidance only; it does not replace advice from a lawyer on your situation.
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Frequently asked questions about Article 26 of the Saudi Social Insurance Law
On what basis is the average wage for the pension calculated?
On the basis of the average of the highest wages or salaries subject to contribution over 180 months of contribution periods.
Do social insurance pensions increase as prices rise?
The Board of Directors may, by its decision, increase pensions taking into account the consumer price index and the actuarial study results in whole or in part. The increase is not automatic under the text of the article.
Does the pension increase include family members?
Yes. The article provides that pensions may be increased for subscribers and family members.
More articles on Retirement Pension
- Article 2
The article provides that a year and a month under the Social Insurance Law are counted by the Gregorian calendar.
في تطبيق أحكام النظام، يقصد بالسنة والشهر: الوحدات الزمنية حسب التقويم الميلادي.
- Article 14
The article sets out who is subject to the pensions branch on a compulsory basis, namely Saudi employees and workers under conditions, and allows voluntary contribution by Saudis working abroad without a local employer.
1- يطبق فرع المعاشات بصورة إلزامية على الفئات الآتية: أ - جميع الموظفين السعوديين. ب - جميع العمال السعوديين الذين يعملون داخل المملكة، أو خارجها لحساب صاحب عمل
- Article 15
The article sets the pensions branch contribution at 22% of the contributory wage, shared equally between the employer and the subscriber, and borne entirely by a voluntary subscriber.
1- يكون الاشتراك في فرع المعاشات بنسبة (22 %) من الأجر أو الراتب الخاضع للاشتراك بحيث يتحمل صاحب العمل (11 %)، ويتحمل المشترك (11 %). 2- يحدد اشتراك فرع المعاشا
- Article 16
The article sets the statutory age of entitlement at 65, the conditions for obtaining a pension on reaching it, and the possibility of early retirement of no more than 120 months under conditions.
1- يقصد بالسن النظامية للاستحقاق لغرض تطبيق أحكام النظام: سن (الخامسة والستين). 2- يحق للمشترك الحصول على المعاش إذا بلغ السن النظامية للاستحقاق، وكانت مدة اشتر
- Article 17
The article explains how the retirement pension is calculated, its two minimum amounts, its 3% reduction per year for early retirement, and the same-rate increase for those who keep working after the statutory age.
1- يُحتسب المعاش المنصوص عليه في المادة (السادسة عشرة) بضرب (2.25 %) في متوسط الأجر أو الراتب الخاضع للاشتراك المحدد وفق أحكام الفقرة (1) من المادة (السادسة وال
- Article 18
The article governs a person receiving an early pension who returns to work subject to the Law before the statutory age, setting how much of the pension may be combined with the wage according to the wage level.
1- إذا عاد صاحب المعاش المستحق وفق أحكام الفقرة (3) من المادة (السادسة عشرة) من النظام لعمل خاضع لأحكام النظام قبل بلوغ السن النظامية للاستحقاق، فإنه يعامل وفقا
The texts are reproduced from the official website of the Bureau of Experts at the Council of Ministers for reference; where they differ, the officially published Arabic text prevails. This content is not legal advice.