Kuwait indemnity after 3, 5 and 10 years: calculation by years of service

If your employer ends your contract in Kuwait, you are owed 15 days’ wage for each of your first five years and one month’s wage for each year after that, up to a ceiling of 18 months’ wage. If you resign, the amount is reduced: nothing under 3 years, half from 3 to 5 years, two-thirds from 5 to 10, and the full amount after 10 years. The table below shows what that means in dinars, and the Kuwait gratuity calculator works it out from your exact dates.

These rules come from Private Sector Labour Law No. 6 of 2010, Articles 51 to 53, as amended. They apply to private-sector employees, Kuwaiti and expatriate alike.

The formula for monthly-paid workers

The indemnity is built from two bands:

Three details decide the final number.

• Which wage. Kuwait uses your last full wage: basic pay plus regular allowances such as housing and transport. See basic or total salary for how this compares with the rest of the Gulf.
• The day’s wage. Fifteen days’ wage needs a daily rate. Common practice is monthly wage ÷ 26 working days, and our calculator uses it. The law itself does not fix the divisor; an employer that divides by 30 will arrive at a slightly smaller figure.
• Part years count. Service is measured in days, so 7 years and 4 months is paid as 7.33 years, not 7.

In plain arithmetic, on a monthly wage of W:

• First five years: 5 × 15 × (W ÷ 26)
• Each later year: W
• Total: the smaller of that sum and 18 × W

Table: indemnity by years of service

All figures use a monthly full wage of KWD 600 and the ÷ 26 day rate. They were produced with the same engine that runs our calculator.

Your wage scales the figures directly: on KWD 900 a month, multiply each number by 1.5.

If you resign: nothing, half, two-thirds or full

Article 53 reduces the indemnity of a worker who resigns, by length of service.

Two points to watch:

• The boundaries. Our calculator treats exactly five years as the start of the two-thirds tier and exactly ten years as full. The wording at the exact boundary is not settled in the secondary sources we could check, so if you are a few days either side of a threshold, it can be worth staying until you are clearly past it.
• Marriage. A woman who resigns within one year of marriage receives the full indemnity regardless of length of service (Article 52).

If your employer ends the contract, or a fixed-term contract simply expires, there is no reduction. For how the Gulf countries compare on this, see resigning vs being terminated.

The 18-month cap

For monthly-paid workers, the total indemnity cannot exceed 18 months’ wage. On KWD 600 that ceiling is KWD 10,800.

Because the first five years earn 75 days in total (about 2.9 months at the ÷ 26 rate) and each later year adds one month, the cap is reached after roughly 20 years of service. Anyone with more than about two decades in the same job will see the cap in their settlement rather than a year-by-year figure. The calculator shows when it has applied.

Daily, hourly and piece-rate workers

Workers paid by the day, hour or piece follow a lower scale: 10 days’ wage per year for the first five years and 15 days per year after, with a ceiling of one year’s wage. These figures come from law-firm summaries rather than the official text, so treat them as a guide and check your contract. Our calculator is built for monthly-paid workers.

Worked examples on KWD 600

Example 1: resigning after three years. Mariam resigns with exactly three years of service.

• Full indemnity: 3 × 15 × (600 ÷ 26) = KWD 1,038.46
• Resignation at 3 to 5 years: half
• Indemnity: KWD 519.23

Example 2: terminated after ten years. Ravi’s employer ends his contract after exactly ten years.

• Years 1–5: 5 × 15 × 23.08 = KWD 1,730.77
• Years 6–10: 5 × 600 = KWD 3,000
• Indemnity: KWD 4,730.77, with no reduction because the employer ended the contract. Had he resigned, he would receive the same, because ten years earns the full amount.

Example 3: resigning after seven years. Seven years earn KWD 2,930.77 in full. A resignation at that point pays two-thirds: KWD 1,953.85.

What else is in your final settlement

The indemnity is only one line. You should also receive your last salary, payment for unused annual leave (30 working days a year after the first six months), and any notice pay owed. Kuwait’s statutory notice for monthly-paid, open-ended contracts is at least three months (Article 44). Kuwaiti nationals receive the indemnity in full alongside their PIFSS pension. Our final settlement checklist lists every item, and the Kuwait labour law guide explains the rules behind them.

The Public Authority of Manpower handles labour complaints if your indemnity is not paid: pam.gov.kw.

Common mistakes when estimating Kuwait indemnity

Most disagreements over a Kuwait settlement come from a handful of errors:

• Using basic pay only. Kuwait counts the full wage, including regular allowances. If your settlement was worked out on basic pay alone, ask why.
• Applying one month per year from day one. The first five years earn 15 days, not a month. Calculators that skip this overstate early-career indemnity by about half.
• Ignoring the divisor. Fifteen days at ÷ 26 is worth more than fifteen days at ÷ 30. On KWD 600, the difference over five years is about KWD 230. Ask your employer which divisor it used.
• Rounding service down. Part years count. Leaving at 4 years 11 months is paid as about 4.92 years, not 4.
• Missing the resignation threshold. Resigning a few weeks before the 3-, 5- or 10-year mark can change your share from nothing to half, half to two-thirds, or two-thirds to full. Check your exact dates before you hand in notice.
• Forgetting the cap. Past about 20 years, extra service no longer increases the indemnity for monthly-paid workers.

If your employer’s figure differs from ours, ask for the calculation in writing: the wage used, the divisor, the service dates and the resignation share. Most differences can be traced to one of these four inputs.

Calculate your indemnity

Enter your full monthly wage, start date and last working day in the Kuwait gratuity calculator. Choose whether you resigned or were terminated. It applies the 15-day and one-month bands, the resignation share and the 18-month cap, and shows every line of the calculation.

Frequently asked questions