So you are working cleaning up the loose ends of your last payroll run and your manager stops by. He casually asks, “Can you take over the Dubai payroll? Will is leaving the company and I think this would be a fantastic learning opportunity for you.” And you think – hmm Will never complained about collective agreements, taxes, deductions or other complexities, which I face every month with my European payrolls. So maybe it would be all right. Then you hear yourself say “Sure,” and you are thinking how hard can that be?
You start learning about the payroll including that there are multinational individuals, the company is set-up in a free zone, and the contact at the payroll provider is Yaser. Near the change submission date, Yaser sends a quick email asking what you want to do with the two recently hired Saudi Arabian nationals. So you start thinking – why does it matter that they are from Saudi Arabia. On my Dubai payroll, it seems most people are from somewhere else anyways. So you fire an email back, “Yes – please pay them.” Yaser replies – What about the GOSI contributions for the two Saudi Arabians?
Huh? What is GOSI? And why is it mucking up my supposedly simple UAE payroll? Isn’t it basically a gross payroll with two accruals, one for end of service and one for vacation? Ok – add in the slight complexity of the Wage Protection System (WPS), which my provider helps me with anyways for distribution reporting.
So you go to the well of all knowledge, Google, and you type in GOSI. Ignoring the first entry in Arabic, you jump to the second item to find out that GOSI stands for General Organization for Social Insurance. Interestingly enough, GOSI or the concept of GOSI is prevalent across the Gulf Cooperation Council (GCC) which is comprised of Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the United Arab Emirates. Basically, GOSI is social insurance with employee contributions and employer matches.
Got it – GOSI is mandatory in Saudi Arabia, Oman, Bahrain and Qatar. So you think – I am processing payroll in UAE why does GOSI matter? Herein lies the interesting part. If an employee from a country where GOSI is mandatory (Saudi Arabia) is working in another GCC country (UAE), than the work, country (UAE) should register the employee for GOSI, withhold the appropriate amount from the employee and pay the company match based on his nationality (Saudi Arabian). These funds are remitted to the Saudi Arabian authorities in UAE to be registered to the employee’s accounts.
It is apparent that the GCC is cooperating more and more on regional workforce and funding issues. In addition to WPS and GOSI, there have been discussions on unifying currency and banking systems. So although GCC is still considered one of the easiest payrolls to process in the world, inter-regional requirements are increasing the complexity of the calculations and compliance each year.
Therefore, if your manager comes back asking you to take on the “easy” Qatar payroll too, you might ask for the “fantastic learning opportunity” to come with a raise.