SAR 12000 Salary Gratuity in Saudi Arabia (2026): What Can Be Deducted From It?

Your SAR 12000 salary gratuity is SAR 30,000 after five years and SAR 90,000 after ten.

At this wage level the calculation is usually the easy part. The arguments happen over what comes off it — a company loan, a salary advance, a laptop that was never returned, a training bond someone mentions for the first time on your last day.

Some of those deductions are lawful. Others aren’t. Here’s how to tell the difference.

Quick Answer

Half a month’s wage: SAR 12,000 ÷ 2 = SAR 6,000

Half a month’s wage for each of your first five years, then a full month for each year after. No cap.

What Article 88 Actually Permits

Article 88 allows your employer to deduct amounts you legitimately owe them from your end-of-service entitlements before paying the balance.

The key word is legitimately. A deduction needs to rest on something real — a written agreement, a documented loan, an asset that’s genuinely outstanding.

Worked example. Ten years of service on SAR 12,000, with a documented company loan of SAR 15,000 still outstanding:

• Award: SAR 90,000
• Lawful deduction: − SAR 15,000
• You receive: SAR 75,000

That’s straightforward and correct. The problems arise with the bottom three rows of that table.

The Three Deductions Worth Challenging

A penalty for resigning

There is no such thing under the Labour Law. Article 85 reduces the award for resignation from a fixed-term contract — that’s a calculation rule, not a deduction, and it’s separate.

If a line item on your settlement says anything resembling a resignation penalty on top of the Article 85 calculation, ask which provision supports it.

An undocumented shortfall

There was a discrepancy in the accounts” or “you cost us on that project” is not a deduction. Amounts owed need to be established, not asserted at the point of exit.

Ask for the underlying document. If one doesn’t exist, that’s your answer.

Quietly using basic instead of wage

This isn’t presented as a deduction at all, which is why it’s the most effective one.

Saudi EOSB runs on your wage — basic plus fixed allowances — under Article 2. On a package of SAR 12,000 basic plus SAR 3,000 housing and SAR 1,200 transport, your wage is SAR 16,200:

SAR 31,500 — larger than most loan deductions, and it never appears as a line item. Our SAR 5,000 breakdown explains the wage definition in full.

Training Bonds

A common one at this wage level. Employers sometimes fund a qualification or certification on the understanding you’ll stay a certain period.

Whether that’s recoverable depends entirely on what you signed. A written agreement setting out the amount, the period and the repayment terms is a different situation from a verbal understanding raised on your last day.

Ask for the signed document. If it exists and you signed it, the deduction likely stands. If it doesn’t, ask on what basis the amount is being claimed.

Ask for It Itemised

This single request resolves most disputes.

Request a settlement statement showing:

• The wage figure used and whether allowances were included
• Your service start and end dates
• The days applied in each accrual band
• Every deduction, separately, with what it relates to

Deductions bundled into a single “adjustments” line are worth questioning on principle. Once someone has to write down what each amount is for, the ones without a basis tend to disappear.

Don’t sign the release until the statement makes sense to you.

Part Years Are Paid in Proportion

Probation counts. Training and apprenticeship periods don’t.

If You Resign, Contract Type Decides

On a fixed-term contract, Article 85 reduces the award. Since 19 February 2025, that reduction applies to fixed-term contracts only — an employee on an indefinite contract ending the relationship on notice receives the full award.

On SAR 12,000 with seven years:

Our SAR 10,000 breakdown covers the amendment in detail.

When You Should Be Paid

Under Article 88: within one week if the employer ended the contract, within two weeks if you did.

Settle before your final exit is processed. If the deduction dispute is unresolved, file through the MHRSD friendly settlement process while you’re still in the Kingdom.

Check the Figure Before the Deductions

Enter your full wage and dates in the Saudi Arabia Gratuity Calculator to establish what the award should be. Then compare that against the statement, and look only at the difference.

Working out the gross figure first makes it much easier to see what’s actually being taken off.

[Calculate My EOSB]

FAQs

How much gratuity on SAR 12,000 after 5 years?

SAR 30,000 if SAR 12,000 is your full wage.

After 10 years?

SAR 90,000.

Can my employer deduct a loan from my end-of-service award?

Yes. Article 88 permits deduction of amounts you legitimately owe, provided they’re documented.

Can they deduct a penalty for resigning?

No. Article 85 may reduce the award on a fixed-term resignation, but that’s a calculation rule, not an additional deduction.

What about a training bond?

It depends on what you signed. Ask for the written agreement setting out the amount and repayment terms.

Can they deduct an amount they never documented?

Ask for the underlying document. An assertion at the point of exit isn’t a basis.

Do my allowances count towards the award?

Yes. It runs on your wage — basic plus fixed allowances.

Should I sign the release before the statement makes sense?

No. A signed release is considerably harder to reopen.

Last updated: September 2026 · Based on: Saudi Labour Law (Royal Decree M/51), Articles 2, 84, 85, 86, 87 and 88 · Royal Decree M/44 of 2024
Written by Farhan — About

Different wage? See SAR 4,000, SAR 8,000, SAR 10,000 and SAR 15,000.