SAMA Salary Deduction Rules for Personal Loans 2026

When you apply for personal financing in Saudi Arabia, the first number a bank or finance company checks is not your salary itself but the deduction ratio possible from it. The Saudi Central Bank (SAMA) has set strict rules defining how much a lender can deduct monthly from your salary to service a loan installment, with the goal of preventing borrowers from taking on debt they cannot repay. Understanding these rules before applying saves you from outright rejection or approval at a smaller amount than expected.

SAMA has set two main ceilings for monthly salary deduction:

33.33%** maximum for an active employee:

25%** maximum for a retiree depending on a pension:

The first ratio means the sum of installments on all active loans for an employee cannot exceed one-third of their gross monthly salary. The retiree ratio is lower because pension income is fixed and does not grow, so capacity to absorb obligations is lower. These ratios do not apply to a single bank but to the borrower's total obligations across the entire Saudi banking and finance sector.

When you apply for personal financing from a bank like Al Rajhi or SNB, or a SAMA-licensed finance company like Lendo, Raqamyah, Tamam, or Emkan, the system follows these steps:

1. **Pull the SIMAH report**: to identify the borrower's existing obligations

2. **Sum the current monthly installments**: across all active loans

3. **Add the requested loan installment**: to the total

4. **Compare the result to 33.33% of gross salary**

If the result exceeds the cap, the bank either reduces the granted amount, extends the term to lower the installment, or in some cases rejects the application outright.

The most confusing point of the rule is the definition of salary itself. SAMA states the ratio is calculated on **gross salary**, which includes:

• Basic salary

• Housing allowance

• Transportation allowance

• Other fixed allowances paid every month

Allowances that are **excluded from the calculation** include:

• Annual bonuses

• Health insurance allowances

• Irregular overtime pay

• Variable performance incentives

• End-of-service benefits

The practical outcome is that the gross salary used by the lender is usually higher than your basic salary, which raises the allowable amount versus a calculation on basic salary alone.

Some scenarios change the allowed ratio or apply additional rules:

**Mortgage financing**: subject to a separate cap, reaching 65% of gross salary when all obligations including the mortgage installment are counted, per SAMA amendments. This exception applies to housing finance only.

**Sole breadwinner of a large family**: some banks apply an additional reduction for an employee supporting a large dependent count to ensure essential living expenses are covered after the installment.

**New employee**: anyone with less than 3 to 6 months at their current employer may face a lower ratio or outright rejection, even if their salary theoretically allows the full 33.33%.

**Borrower with a defaulted history**: even if the ratio is within the cap, a bank may reject the application if the SIMAH report shows recurring late payments.

If the sum of your obligations approaches 33.33%, you have three options:

1. **Restructure existing loans**: extending the term lowers the monthly installment and opens room for new financing, but increases the total cost.

2. **Pay off a small loan**: if a short-term loan has only a few months left, settling it early frees up capacity quickly.

3. **Postpone the new loan**: until an existing installment ends, or until your salary rises with an annual increment or promotion.

Trying to borrow from an entity that does not check SIMAH (which is a regulatory violation) is not a practical option — every SAMA-licensed finance company and the major banks like Al Rajhi, SNB, Lendo, Raqamyah, Tamam, and Emkan are mandatorily connected to SIMAH and share data.

**Can the 33.33% ratio be exceeded under any circumstances?**

No, this is a binding regulatory ceiling. Any bank or finance company that exceeds it faces SAMA penalties. The only exception is mortgage financing, where the total reaches 65% under specific conditions.

**Does Islamic financing fall within the ratio?**

Yes, Sharia-compliant financing is subject to the same SAMA rule. Whether Murabaha, Ijara, or Tawarruq, the monthly installment counts toward total obligations.

**Does a credit card count in the calculation?**

Yes, the minimum monthly credit card payment (typically 5% of the balance) is treated as an obligation and is included in the deduction ratio.

**What if my salary increases after approval?**

The increase does not change the terms of an existing loan, but it frees room for a new one. When applying for an additional loan the bank calculates the ratio on the updated salary.

**Does the ratio differ between public and private sector employees?**

The regulatory ceiling is the same for both, but banks apply more cautious internal policies for employees of certain private companies, particularly startups and small enterprises.

Calculating the deduction ratio should not be a guessing exercise. Diro computes it instantly based on your salary and SIMAH obligations, and shows the actual amount that 60+ SAMA-licensed lenders can grant you within the 33.33% cap — in under 5 minutes with no impact on your credit score.

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