Salary Deductions in Saudi Arabia 2026 — What's Legal, What's Not & How to Claim It Back

What Saudi Labour Law Says About Salary Deductions

The primary rules on salary deductions come from two articles of the Saudi Labour Law (Royal Decree M/51, as amended).

Article 91 sets the hard ceiling: no matter how many separate deductions an employer applies — for advances, GOSI, accommodation loans, disciplinary penalties, or anything else — the total withheld in one month cannot exceed 50% of the employee's monthly wage. Any excess must be carried forward to future months or waived.

Article 64 governs disciplinary deductions specifically. An employer can deduct a maximum of 5 days' wages per single violation. Critically, this deduction can only be applied after a proper disciplinary procedure: a written notice to the employee, an opportunity to respond, and a formal written decision. Skipping any step makes the deduction unlawful.

Together, these two articles define the entire legal framework. Any deduction that falls outside them — or that uses them as cover without following the required process — is a violation of Saudi Labour Law.

What Your Employer CAN Legally Deduct

The following deductions are lawful under Saudi Labour Law when properly documented:

• GOSI employee contribution: 9% of basic salary (for Saudi nationals) or 1.5% occupational hazard contribution for expatriates on most schemes. Deducted automatically and remitted directly to GOSI.
• Salary advance repayments: If you have taken a salary advance, the agreed repayment instalments may be deducted each month — provided you signed a written repayment agreement and the total deductions in any month remain below 50% of your wage.
• Housing or accommodation loan repayments: If your employer provided a housing loan or accommodation benefit and you signed a loan agreement, repayments may be deducted. The same 50% cap applies.
• Voluntary savings scheme contributions: If your company operates a savings or end-of-service enhancement scheme and you opted in by signing a consent form, contributions may be withheld.
• Disciplinary deductions following a formal process: Up to 5 days' wages per violation after a written warning, a response opportunity, and a formal written decision by the employer.
• Deductions for absence without authorised leave: Pay for days not worked may be withheld — but only the proportionate daily wage for the exact days absent, not a penalty on top of it.
• Court-ordered garnishments: If a competent court has ordered wage garnishment (e.g. for debt repayment), the employer is legally required to comply. The 50% cap still applies to total deductions in the month.

What Your Employer CANNOT Deduct Without Proper Process

The following are the most common unlawful deductions that employees — especially expats — report in Saudi Arabia:

• Iqama renewal fees: By law, the employer (sponsor) is responsible for the cost of iqama renewal. Deducting it from your salary is illegal, regardless of what a contract clause may say.
• "KPI penalty" or "performance deduction": Saudi Labour Law does not recognise performance-based salary deductions as a lawful category. An employer cannot reduce your wage because targets were missed — they may only reduce a discretionary bonus if that bonus was explicitly conditional in your contract.
• Damage to company equipment without investigation: A deduction for "broken equipment" or "damaged goods" is only legal after a formal written investigation, a finding of employee negligence or misconduct, and a written decision. An employer cannot simply subtract the cost of damage from your next payslip.
• Disciplinary deductions without a written warning: If a manager verbally told you that you would lose pay for an incident, but no written warning was issued and no formal decision was documented, any resulting deduction is unlawful.
• Deductions exceeding 5 days' wages per violation: Even where a disciplinary deduction is lawful, it is capped at 5 days' wages per incident under Article 64. Anything beyond that is an overstep.
• Visa or work permit costs: Under Saudi Labour Law, all costs related to bringing an employee into the Kingdom — work visa, medical tests, residency fees — are the employer's responsibility and cannot be recovered by deducting from wages.
• Recruitment agency fees: If your employer used a recruitment agency to hire you, those fees are their business cost and cannot lawfully be passed on to you via payroll deductions.
• Any deduction pushing total withholdings above 50% of monthly wage: Even if every individual deduction is lawful in isolation, the combined total in one month cannot exceed 50% of your wage under Article 91.

Step-by-Step: How to Check If a Deduction Is Legal

1. Get your payslip and identify every deduction line item by name. If a line is labelled vaguely (e.g. "other deductions", "miscellaneous"), ask HR in writing for an itemised explanation of each amount.
2. Check if it was listed in your employment contract. Open your signed contract and look for a deductions clause. Only deductions explicitly authorised in the contract — or mandated by law (GOSI) — are presumed valid at this stage.
3. Check if you signed a written consent form for that deduction. For advance repayments, savings schemes, or accommodation loans, a signed written agreement is required. If no such document exists, the deduction is unsupported.
4. Check if the total exceeds 50% of your gross monthly wage. Add up all deductions on the payslip. If the sum is more than half your wage, the excess is illegal regardless of what the individual items are.
5. If the deduction is for a "disciplinary" reason, check you received a written warning first. Look for a formal written warning letter (not just a verbal reprimand). If none was issued before the deduction was applied, the deduction is unlawful.
6. If any deduction seems wrong, raise it in writing to HR immediately. Send an email or written letter — do not rely on verbal conversations. This creates a paper trail and starts the clock on your employer's response obligation.

Worked Example: Legal vs Illegal Deduction Scenarios

Scenario 1 — Illegal deduction: "damage" without process

Scenario 2 — Legal deductions: advance repayment + GOSI

How to Claim Back an Illegal Deduction

If you have identified an unlawful deduction, follow these steps in order. Saudi Labour Law provides a clear escalation path from internal HR to the Labour Court.

1. Calculate the exact amount deducted illegally with dates. Go through your payslips month by month. Note the exact SAR amount, the payslip date, and the label used for each unlawful deduction. This is your evidence base.
2. Send a formal written request to HR asking for reimbursement and citing Article 91. Use email so there is a date-stamped record. State the amount, the months affected, and the specific legal basis (Article 91 for excess deductions; Article 64 for disciplinary deductions made without process). Request a response within 5 working days.
3. Give HR 5 working days to respond. Many employers resolve the issue at this stage to avoid a formal complaint. If HR acknowledges the error and commits to repaying, get the repayment timeline in writing.
4. If no response or refusal, file a wage dispute complaint on Qiwa (qiwa.sa). Log in with your Absher/Nafath credentials, navigate to "Labour Complaints", and select "Wage Dispute". Upload your payslips, the employment contract, and any HR correspondence as supporting evidence.
5. Qiwa mediation timeline: 21 days. A HRSD mediator will contact both parties. If mediation produces an agreement, the employer must pay within the agreed timeframe. If no agreement is reached within 21 days, the case is automatically referred to the Labour Court.

Quick Reference — Salary Deduction Rules

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