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Payroll Deduction Form for Saudi Arabia

Payroll Deduction Form Template for Saudi Arabia

A standardized legal document used in Saudi Arabia that authorizes an employer to make specific deductions from an employee's salary in accordance with Saudi Labor Law (Royal Decree No. M/51) and the Wage Protection System (WPS) regulations. The form captures essential details including employee information, deduction amount, frequency, purpose, and duration, while ensuring compliance with local labor laws regarding permissible deductions. It serves as a formal agreement between employer and employee, providing legal protection for both parties and maintaining transparency in payroll processing.

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What is a Payroll Deduction Form?

The Payroll Deduction Form is a crucial document used in Saudi Arabian employment relationships when an employer needs to make authorized deductions from an employee's salary. It is designed to comply with the Saudi Labor Law (Royal Decree No. M/51) and Wage Protection System requirements, which strictly regulate permissible salary deductions. This form is typically used for various purposes including loan repayments, benefit program contributions, voluntary savings schemes, or other authorized deductions. It must clearly specify the deduction amount, frequency, duration, and purpose, while ensuring that the total deductions do not exceed the legally permitted limits. The form serves as both a legal record and a protective mechanism for both employer and employee, ensuring transparency and compliance with local labor regulations.

What sections should be included in a Payroll Deduction Form?

1. Employee Information: Complete identification details of the employee including full name (in Arabic and English), ID number, employee number, and position

2. Employer Information: Company name, commercial registration number, and address details

3. Deduction Details: Specific amount or percentage to be deducted, frequency of deduction, start date, and duration

4. Purpose of Deduction: Clear statement of the reason for the deduction, ensuring it falls within legally permissible categories under Saudi Labor Law

5. Legal Authorization: Statement confirming the deduction complies with Saudi Labor Law and employee's acknowledgment

6. Payment Information: Details of where the deducted amount will be directed, including beneficiary information if applicable

7. Declaration: Employee's confirmation of understanding and voluntary agreement to the deduction

What sections are optional to include in a Payroll Deduction Form?

1. Installment Schedule: Required when deduction is to be made in multiple installments, showing breakdown of payments

2. Third Party Authorization: Needed when deductions are being made for payment to a third party (e.g., loan payments)

3. Cancellation Terms: Terms under which the deduction authorization can be cancelled or modified

4. Benefits Description: Required when deduction is related to employee benefits or services provided by employer

5. Emergency Contact: Optional section for including emergency contact details when deductions relate to insurance or similar benefits

What schedules should be included in a Payroll Deduction Form?

1. Schedule A - Calculation Method: Detailed breakdown of how the deduction amount was calculated, particularly important for percentage-based deductions

2. Schedule B - Payment Timeline: Detailed timeline of when deductions will be made throughout the authorized period

3. Appendix 1 - Supporting Documents: List of attached supporting documents justifying the deduction (e.g., loan agreement, benefit enrollment forms)

4. Appendix 2 - Terms and Conditions: Detailed terms and conditions governing the deduction arrangement, including legal provisions

Authors

Alex Denne

Head of Growth (Open Source Law) @ Ƶ | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Jurisdiction

Saudi Arabia

Publisher

Ƶ

Document Type

Authorization Form

Cost

Free to use
Relevant legal definitions




















Clauses


















Relevant Industries

Banking & Financial Services

Manufacturing

Retail

Healthcare

Technology

Construction

Education

Telecommunications

Oil & Gas

Professional Services

Hospitality

Transportation & Logistics

Real Estate

Public Sector

Non-Profit Organizations

Relevant Teams

Human Resources

Finance

Payroll

Legal

Compliance

Operations

Employee Relations

Compensation & Benefits

Administration

Relevant Roles

Human Resources Manager

Payroll Specialist

Finance Manager

HR Administrator

Compensation & Benefits Manager

HR Director

Finance Director

Payroll Manager

HR Operations Manager

Benefits Administrator

Financial Controller

HR Business Partner

Accounts Manager

Employee Relations Manager

Compliance Officer

Industries






Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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