Can a Saudi Employer Deduct Iqama or Insurance Costs from Final Pay?

What the law says about Iqama and work-permit costs

This is general information, checked against the Ministry of Human Resources and Social Development's English text in September 2026. It is not personalised legal advice.

Article 40 of the Saudi Labour Law says the employer bears the costs of recruiting a foreign worker, residence and work-permit fees and renewals, penalties caused by delay in renewal, profession-change fees, exit and re-entry fees, and the worker's return ticket after the employment relationship ends. The same article contains limited situations in which the worker bears return costs, so do not treat every travel-cost dispute as identical.

An Iqama charge or work-permit levy presented simply as reimbursement of an ordinary employer obligation should therefore be questioned. Ask the employer to identify the exact charge, period and legal basis rather than relying on a broad label such as “visa costs”.

Health insurance needs separate analysis

Do not rely on Article 144 alone as a complete rule about deductions after resignation. Official Saudi health-insurance rules require an employer to arrange compliant cover for eligible private-sector employees, and the employer is responsible for the required premium. The employment relationship ending may affect when cover stops and whether the insurer receives a cancellation request, but that does not by itself prove that a worker owes the employer the premium.

Ask for the policy details, the date cover ended and an itemised explanation of any insurance-related amount. If a deduction concerns optional enhanced cover, a dependent not covered by the mandatory rules, or another expressly agreed benefit, the contract and insurance documents may matter. Do not assume that the label “insurance” settles the question either way.

Final pay and possible debts

Article 61 states that an employer must not withhold wages, or part of them, without a judicial basis. Article 88 deals specifically with final settlement. It says that, when the worker ends the contract, the employer should settle entitlements within the statutory period and may deduct a debt owed by the worker because of the work.

That provision does not turn an employer-paid Iqama or work-permit fee into a worker's debt. It does mean a final settlement can involve other disputed items. Examples might include an evidenced salary advance, unreturned company property or another work-related debt, depending on the facts, contract and applicable law. A contract clause cannot safely be assessed in isolation from mandatory Saudi law.

Check your final settlement

1. Ask for an itemised calculation showing salary, unused leave, end-of-service award where applicable, and every deduction.
2. Compare it with your signed contract, documented amendments, payslips, Qiwa records and previous written approvals.
3. For each disputed amount, ask for the transaction date, receipt, contractual clause and legal basis.
4. Keep copies of your resignation or termination notice, Iqama, insurance record, bank statements and correspondence.
5. Reply in writing. State which item you dispute and why; avoid signing an acknowledgement that says you have received all rights if the amount remains contested.

Do not surrender original personal documents. Article 64 says the employer must return certificates or documents deposited by the worker and, on request, provide a service certificate without charge.

Raise the issue through official channels

Start with payroll or HR and request a corrected statement. If that does not resolve the matter, the Ministry's Friendly Settlement for Labour Disputes service is the first formal stage for many employment disputes. Claims are submitted electronically with supporting documents; unresolved matters may be referred onwards under the official process.

Use only the Ministry's current service page for filing requirements and deadlines. Employment time limits and the correct forum can depend on the type of worker and claim.

When to get help

Seek advice from a Saudi-qualified employment lawyer or the Ministry if a large amount is involved, the employer alleges damages or breach of contract, you are asked to sign an Arabic settlement you do not understand, or your immigration status and final exit are affected. UK2KSA is independent and cannot decide whether a particular deduction is lawful or guarantee a complaint outcome.