Kuwait’s private-sector employment rules are in Labour Law No. 6 of 2010, amended by Law No. 85 of 2017 and Law No. 17 of 2018. We found no enacted change to the indemnity rules in 2025 or 2026; a bill to raise annual leave stalled, and parliament has been suspended since May 2024. This guide gives estimates for information, not legal advice.
Who the law covers
The law covers private-sector employees, Kuwaiti and expatriate. Kuwaitis are insured with PIFSS for their pension and, since the 2017 and 2018 amendments, still receive the full indemnity with no PIFSS deduction. For expatriates, who are not in PIFSS, the indemnity is the main end-of-service benefit.
End-of-service indemnity
The indemnity is set by Articles 51 to 53, with the wage defined in Article 55.
- Wage used: your last full wage: basic wage plus regular allowances, commissions and cash benefits. The social and children’s allowances paid under Law No. 19 of 2000 are excluded.
- Formula for monthly-paid workers: 15 days’ wage for each of the first five years, then one month’s wage for each year after that, capped at 18 months’ wage (one and a half years).
- Daily, weekly, hourly or piece-rate workers: 10 days’ wage for each of the first five years and 15 days for each later year, capped at one year’s wage. Our calculator covers monthly-paid workers.
- Part years: paid pro rata.
- Day’s wage: the widespread practice, used by our calculator, is monthly wage ÷ 26 working days. The law itself does not state 26, and one reading uses actual working days, so the divisor is disputed.
If you resign (Article 53)
| Service when you resign | Share of the indemnity |
|---|---|
| Less than 3 years | Nothing |
| 3 to 5 years | Half |
| 5 to 10 years | Two thirds |
| 10 years or more | Full |
You receive the full indemnity when the employer ends the contract, when a fixed-term contract expires, in the cases in Articles 48 to 50 (such as employer breach, death or incapacity, or closure), and if you are a woman resigning within one year of marriage (Article 52).
Absence of 7 consecutive days, or 20 days in a year, can be treated as resignation (Article 42). The indemnity is lost on dismissal under Article 41; available summaries point to paragraph (a) only, so check the official text for your case.
Annual leave
Article 70 gives 30 working days of paid annual leave a year, earned after six months of service in the first year. Value your leave with the Kuwait leave salary calculator.
Overtime
According to secondary sources summarising Articles 66 to 68:
- regular overtime: + 25%;
- work on the weekly rest day: + 50% plus a substitute day off;
- work on a public holiday: double pay plus a day off.
Calculate your overtime with the Kuwait overtime calculator.
Notice period
For monthly-paid workers on an open-ended contract, Article 44 requires at least three months’ notice.
Worked example
An employee earns a wage of KWD 600 a month and leaves after exactly 7 years.
- Day’s wage: 600 ÷ 26 = KWD 23.077
- Years 1–5: 5 × 15 days = 75 days × 23.077 = KWD 1,730.77
- Years 6–7: 2 × one month = KWD 1,200.00
- Full indemnity: KWD 2,930.77 (well under the 18-month cap of KWD 10,800)
If the employee resigned, seven years falls in the two-thirds band: 2,930.77 × ⅔ = KWD 1,953.85. Try your own numbers in the Kuwait indemnity calculator.
Common mistakes
- Using basic wage only. Kuwait uses the full wage, minus the Law 19/2000 social and children’s allowances.
- Using ÷ 30 without thinking. Most practitioners use ÷ 26; the choice changes the first-five-years figure.
- Forgetting the cap. Monthly-paid workers are capped at 18 months’ wage.
- Applying resignation shares to a fixed-term contract that simply expired. Expiry gives the full indemnity.