Salary deduction for absence: formula + 3 examples

In Saudi Arabia, the salary deduction for unexcused absence is the monthly wage divided by 30, multiplied by the number of absences. Article 2 of the Labor Law defines a month as 30 days unless the contract or the work regulations say otherwise. So an employee earning SAR 6,000 who is absent twice without excuse loses SAR 400. Any fine on top of the pay for the absence is allowed only if your approved work regulations provide for it. It cannot exceed 5 daily wages per violation, and total deductions in a month cannot exceed half the wage. Below are the formula, 3 SAR examples and the point at which dismissal becomes possible.

How much is deducted for one day of unexcused absence?

One day's wage for each day absent. The law itself recognises "absence without pay": it appears in the definition of continuous service in Article 2 of the Labor Law (the text published by the Ministry of Human Resources and Social Development). The same article sets the month at 30 days. The practical calculation takes three steps:

1. Fix the monthly wage: the common practice is to divide the monthly wage actually paid, including monthly allowances. If the contract or your work regulations set a different basis, follow it.
2. Work out the daily wage: monthly wage ÷ 30, even when the calendar month has 31 or 28 days.
3. Multiply by the absences: count only absences without permission or an accepted excuse. Approved leave, or sick leave backed by a medical certificate, is not absence.

This deduction is not a penalty. It is pay for work that was not done. If you also want to penalise the absence with a fine, that is a disciplinary penalty with its own conditions, covered below.

Three examples in riyals

Example 2: a cashier on SAR 4,500 is absent 3 times. Assume your approved work regulations impose a fine of one day's wage for this absence. The daily wage is SAR 150, so the absences cost SAR 450 and the fine SAR 150, leaving SAR 3,900. Whatever the regulations say, the fine is capped at SAR 750 (5 daily wages).

Example 3: a warehouse worker on SAR 3,000 has 4 absences, so SAR 2,600 is due after the absences. He also owes a loan instalment of SAR 260 (10%), a fine of SAR 500 for a violation (5 daily wages), and SAR 800 to repair a device he damaged through his own fault. Only SAR 500 of the repair can be taken this month, because Article 91 caps it at 5 daily wages per month; the rest waits. Total deductions are SAR 1,260, below half of what is due (SAR 1,300), and he is paid SAR 1,340.

What limits must a salary deduction respect?

• No penalty outside the regulations: Article 67 bans any penalty not provided for in the law or the work regulations. If your regulations do not set a fine for absence, deduct only the pay for the absence.
• 5 days per violation: a fine for a single violation cannot exceed 5 daily wages, fines deducted in one month cannot exceed 5 daily wages, unpaid suspension cannot exceed 5 days a month, and only one penalty may be imposed per violation (Article 70).
• 10% for loan instalments: repayment of an employer loan cannot exceed 10% of the wage without the employee's written consent (Article 92).
• Half the wage overall: all deductions together cannot exceed half the wage due, unless the labor court allows more (Article 93).
• Unlawful deductions are expensive: the labor court can order the money returned and fine the employer up to twice the amount wrongly deducted (Article 94).

When can an employer dismiss an employee for absence?

Article 80, paragraph 7, allows the contract to be terminated without award or compensation if the employee is absent without valid reason for more than 30 days in one contract year, or more than 15 consecutive days. The condition is a written warning first: after 20 days of absence in the first case, and after 10 days in the second. Without the warning, your case is weak even if the limit was passed.

Absence also affects length of service. The definition of continuous service still counts unpaid absence as continuous as long as it does not exceed 20 non-consecutive days in a work year. That matters when you calculate the end-of-service award.

What steps come before fining an employee for absence?

1. Notify and investigate in writing: no penalty may be imposed before the employee is told in writing what he is accused of, his defence is heard, and both are recorded. Oral questioning is allowed only when the penalty is a warning or a fine of no more than one day's wage (Article 71).
2. Respect the deadlines: an employee cannot be charged with a violation discovered more than 30 days earlier, and the penalty cannot be imposed more than 30 days after the investigation ends (Article 69).
3. Deliver the decision in writing: the employee may file a grievance within 30 days; if it is not decided within 15 days, he may object before the labor court within 30 days (Article 72).
4. Record the fine: keep a register with the employee's name, wage, the fine, its reason and date. Fine proceeds may only be spent on things that benefit the establishment's workers (Article 73).

Note also that a repeated violation cannot justify a harsher penalty once 180 days have passed since the employee was notified of the penalty for the previous one (Article 68).

How do I record absence from my phone instead of a spreadsheet?

Most deduction disputes come not from the formula but from an absence nobody recorded on the day, rebuilt from memory at month end and easily contested.

In Fahim's HR and payroll software a supervisor records the absence on the day with an ordinary WhatsApp message such as "Khalid is absent today without excuse". The employee sends a leave request or an excuse by message, and the manager approves it by message. Attendance, leave and advances then feed the payroll run directly, and the run is reviewed and approved before payment. Permissions keep payroll data visible only to the people it concerns. If the same month also has extra hours, see how to calculate overtime pay.

Frequently asked questions

Is absence deducted from the basic salary or the full salary?

The law fixes the month at 30 days but sets no separate formula for absence deductions. Common practice is to divide the monthly wage actually paid, including monthly allowances. If the contract or work regulations specify another basis, that governs.

Can I deduct double pay for one absence?

The extra deduction is a fine, not pay, so it is allowed only if your approved work regulations provide for it. You must first notify the employee and hear his defence, and a fine for one violation cannot exceed 5 daily wages. Without regulations, the deduction is limited to the absence itself.

Does unexcused absence reduce the end-of-service award?

The definition of continuous service in Article 2 treats unpaid absence as continuous service if it does not exceed 20 non-consecutive days in a work year. So occasional absence does not break the service period. Anything beyond that falls outside this exception, so take advice before calculating the award.

After how many days of absence can I dismiss an employee?

More than 30 non-consecutive days in a contract year, or more than 15 consecutive days, under Article 80, paragraph 7. The written warning is a condition: after 20 days in the first case and after 10 days in the second. Keep a copy with its delivery date.