Quick Summary
- Employers cannot deduct salary without justification — Article 82 of Saudi Labour Law
- Total deductions in any month cannot exceed 50% of your total salary
- Permitted deductions: social insurance contributions, housing loans, disciplinary fines within limits
- Prohibited deductions: iqama renewal costs, health insurance premiums (employer's cost), visa fees
- Disciplinary fines are capped at 5 days salary per violation
- Illegal deductions are an HRSD complaint matter — file immediately
The Core Rule — Article 82 Saudi Labour Law
Article 82 of the Saudi Labour Law is the key protection: no amount may be deducted from an employee's wage for amounts owed to the employer except in specific, legally defined circumstances. Any deduction outside these circumstances is illegal regardless of what your contract says — contract clauses cannot override the Labour Law minimum protections.
What Deductions Are Legally Permitted
| Permitted Deduction | Details and Limits |
|---|---|
| GOSI social insurance contributions | Applies mainly to Saudi nationals — expats generally not subject to GOSI deductions |
| Housing loans / salary advances | Repayment of employer-provided advances or loans — must be agreed in writing, cannot exceed 10% of salary per month |
| Disciplinary fines | Maximum 5 days salary per violation, maximum 10 days salary per month, must follow formal disciplinary process |
| Court-ordered deductions | Legally mandated deductions by court order — employer obligated to comply |
| Employee insurance contributions | Only if employee has agreed in writing as part of a group insurance scheme |
| End of service advance repayment | If employer advanced part of EOSB — must be agreed, documented and within limits |
The 50% Cap — Your Hard Protection
Even for permitted deductions Saudi Labour Law sets an absolute ceiling: total deductions in any single month cannot exceed 50% of your total monthly salary. This means regardless of how many valid deductions apply, you must always receive at least half your salary. If legitimate deductions exceed 50%, the remainder carries forward to the next month.
What Employers Cannot Deduct
These deductions are illegal — employers who make them are violating Saudi Labour Law regardless of any contract clause or company policy:
- Iqama renewal fees — the employer is legally required to bear the cost of iqama renewal. Deducting this from your salary is a clear violation.
- Health insurance premiums — employer is required to provide and fund health insurance. Charging employees for this is prohibited.
- Work visa fees — the cost of obtaining or renewing your work visa is the employer's responsibility.
- Uniform or equipment costs — where uniforms or equipment are required by the employer these must be provided at employer's cost — not deducted from salary.
- Arbitrary or unexplained deductions — any deduction without a clear, documented justification is illegal.
- Fines for customer complaints without investigation — disciplinary fines require a formal process. Deducting salary because a customer complained without a proper investigation is not permitted.
Disciplinary Fines — The Specific Rules
Employers can impose salary deductions as disciplinary fines but must follow strict rules:
- The workplace must have a formally approved disciplinary policy registered with HRSD
- The employee must be given the opportunity to respond to the allegation in writing
- Maximum fine per single violation is 5 days salary
- Maximum total disciplinary fines in one month is 10 days salary regardless of number of violations
- The fine must be documented and the employee notified in writing
- Fine cannot be imposed more than 30 days after the employer discovers the violation
What to Do If Your Salary Is Illegally Deducted
Document the Deduction
Take screenshots of your pay slip or bank statement showing the deduction. Note the exact amount, month and compare to your contracted salary. Save all payslips from the past 12 months if possible.
Request Written Justification from HR
Email HR formally asking for the specific reason and legal basis for the deduction. Request a written response. Give them 5 working days to respond. Keep the email and any response.
File HRSD Complaint if No Resolution
If HR does not respond or provides an inadequate justification, file a complaint at hrsd.gov.sa. Upload your payslips, contract and HR email correspondence. HRSD investigates salary deduction complaints and can order repayment with penalties to the employer.
Frequently Asked Questions
My employer deducted SAR 1,500 for "iqama renewal" from my salary. Is this legal?
No — this is illegal. Iqama renewal costs are the employer's legal responsibility under Saudi Labour Law. The employer cannot pass this cost to employees through salary deduction. Send HR a formal written request for reimbursement citing that iqama costs are employer's statutory responsibility. If refused, file an HRSD complaint.
I was fined one month's salary for a mistake at work. Is this within the law?
No — this massively exceeds the legal limit. The maximum disciplinary fine per single violation is 5 days salary. The maximum in any one month from all violations combined is 10 days salary. A fine of one month's salary is approximately 6 times the legal maximum. File an HRSD complaint immediately with your payslip and the written disciplinary notice as evidence.
Can my employer deduct from my salary to recover a training course they paid for?
Saudi Labour Law has specific rules on training cost recovery. If you signed a specific training bond agreement before the training stating that you will repay costs if you leave within a specified period, and you then leave voluntarily within that period, the employer may have grounds to recover costs. However the recovery must be through legal means — not arbitrary salary deduction without your agreement. Consult HRSD or an adviser if this situation arises.
Illegal Salary Deduction by Your Employer?
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