Company Assets Custody

What company assets custody means

Company assets custody (أصول العهدة) is the set of physical assets an organisation hands to an employee to use in doing their work, recorded against that employee’s name in a register, with whatever remains returned once the need for it ends or once the employee’s relationship with the organisation ends.

Custody in this sense is physical, not cash. The word custody (العهدة) is also used in accounting with an entirely different meaning: a sum of money handed over temporarily to an employee or a department to complete a task or cover an expense, and settled later against its supporting documents. That meaning is explained under petty cash and advances. The first is an asset that is used and then returned; the second is cash that is spent and then settled. Each of them is managed through a different process.

The Saudi Labor Law (نظام العمل) uses the word in a third sense, which should not be confused with either of these. Article 91 of the Labor Law, on deductions from wages, speaks of machines and products that are owned by the employer or in the employer’s custody. Custody there describes what is in the organisation’s hands, not what has been handed to the employee. Company assets custody runs in the opposite direction: it covers what the organisation takes out of its own hands and places in the hands of a named employee.

What company assets custody covers

• Work devices: the computer and the telephone, with their accessories.
• Means of access: cards, keys and physical means of identification.
• Tools and equipment: the items used in technical and field roles.
• Vehicles, together with the documents that go with them.
• Uniforms and safety equipment, where the work calls for them.

What makes a company assets custody record reliable

A custody record is consulted at the moment of a disagreement or a departure, and at that moment an entry that says only “computer” is not enough. Five elements make the record one that can be relied on:

1. Identification of the specific asset: its type and its serial number, not a general description.
2. The date of handover and the condition of the asset on that date. Without a description of its starting condition, there is no way to tell what changed later.
3. An acknowledgement of receipt signed by the employee, with a copy kept in the employee file.
4. The location of the asset, where it moves between branches or sites.
5. A trace of every change: a replacement, a transfer to another employee, or a withdrawal from service, each with its date and the name of the person who approved it.

A defect that can arise here is not a lost asset but a record that was not updated when the asset passed from one person to another. The asset then remains recorded against someone who no longer holds it, and the register points at the wrong person when it is consulted.

Company assets custody under the Saudi Labor Law

Article 65 of the Labor Law lists duties the worker owes in addition to those set out elsewhere in the Labor Law, its regulations and the decisions issued under it. Under paragraph 2 of Article 65 of the Labor Law, the worker must take sufficient care of the machinery, tools, equipment and raw materials owned by the employer that are placed at the worker’s disposal or are in the worker’s custody, and must return to the employer the materials that have not been used up. That duty has its source in the statute, not in an internal form. The custody record does not create it; the record proves what was handed over and when.

The effect of loss or damage on the wage is a separate question from the definition of company assets custody. Under the Labor Law, a deduction made from the wage without the worker’s written consent needs a ground the Labor Law permits, is subject to the ceiling the Labor Law sets for that ground where it sets one, and in every case falls under an aggregate ceiling across all deductions. For loss or damage, the ground is in Article 91 of the Labor Law. It allows the employer to deduct the amount needed for repair or restoration where a worker has caused the loss, damage or destruction of machines or products owned by the employer or in the employer’s custody, where this arose from the worker’s fault or from a breach of the employer’s instructions, and where it was not the result of a third party’s fault or of force majeure. Article 91 of the Labor Law caps what is deducted for that purpose at five days’ wage in each month. That wage is unqualified in the text, and Article 2 of the Labor Law gives an unqualified wage the meaning of the actual wage (الأجر الفعلي). Article 91 of the Labor Law also allows the worker to challenge before the labour court both what has been attributed to them and the employer’s assessment of the compensation.

The aggregate ceiling is in Article 93 of the Labor Law. Under it, the amounts deducted may not exceed half of the wage due to the worker, unless the labour court is satisfied that a larger deduction is possible, or is satisfied that the worker needs more than half of the wage, in which latter case the worker is not given more than three quarters of it.

An employer that sets an amount and deducts it on the strength of the custody record alone is therefore relying on a document of proof in a place where it does not suffice. The record shows that an asset was handed over, on which date and in what condition. The conditions that Article 91 of the Labor Law places on a deduction concern how the loss or damage came about, and the record does not by itself establish them.

The provisions relied on are those of the Saudi Labor Law as published by the Ministry of Human Resources and Social Development: Article 2 (the meaning of an unqualified wage), Article 65 (the worker’s duty of care over the employer’s property and the return of materials), Article 88 (the settlement deadline when service ends), Article 91 (deduction for loss or damage the worker caused, and its monthly ceiling) and Article 93 (the aggregate ceiling on deductions). Royal Decree M/44 of 1446H, in force since 19 February 2025, amended other provisions of the Labor Law. That decree did not amend Articles 65, 91 or 93 of the Labor Law.

How company assets custody differs from assets used without a handover

Not everything an employee uses is held in custody. Shared assets that stay in their place and are used by more than one person are managed through lists kept for the site, not through an entry against an individual. Company assets custody requires assignment to a named person, and that assignment is what makes it possible to ask about the asset at all.

On the opposite side sits a device the employee owns and uses for work. It is not held in custody, because the organisation handed nothing over, yet the organisation’s data still passes through it. That situation is addressed by a policy on the use of personal devices, an arrangement separate from the custody register.

Company assets custody at the end of the employment relationship

The return of physical custody is one item in exit clearance (إخلاء الطرف), alongside the closing of digital access, the handover of work and the financial settlement. How exit clearance differs from the settlement itself and from the final release is set out under settlement of entitlements.

The rule that prevents an error here is that the internal procedure runs in parallel with what the employee is owed, not as a condition that must be met first. The entitlements that arise when the relationship ends, and the dates by which they are due, are governed by the provisions of the Labor Law, not by the completion of an internal form. Under Article 88 of the Labor Law, when a worker’s service ends the employer must pay the worker’s wage and settle the worker’s entitlements within one week at most of the date the contractual relationship ended, and where the worker is the one who ended the contract, within a period of no more than two weeks. That deadline runs from the end of the relationship. How it is counted is covered in our guide to wage payment dates and the final settlement.

This is an explanation of the concept and of the statutory provisions cited, not legal advice.