This is general information, not legal advice. Check your contract and the Public Authority for Manpower (PAM) for your situation.
Kuwait's end-of-service indemnity (مكافأة نهاية الخدمة) is set by Articles 51 to 53 of the Private Sector Labour Law (Law No. 6 of 2010). Two things make it different from its neighbours: it's based on your full wage, not just basic salary, and resigning early can reduce or remove it.
How much: monthly-paid staff
- 15 days' wage for each of the first five years of service.
- One month's wage for each year after five years.
- Part years count in proportion.
- The total can't exceed 18 months' wage (a year and a half).
Workers paid daily, weekly, hourly or by the piece have a lower scale: 10 days' wage a year for the first five years, then 15 days a year, capped at one year's wage.
Which wage counts?
The indemnity is based on your last wage. Under the law, the wage includes your basic pay plus regular payments under your contract or company policy — such as allowances, periodic bonuses and benefits. Some government social and children's allowances are excluded.
For a daily rate, monthly wage is divided by the actual working days in the month — commonly 26, as paid weekly rest days are left out. Check how your employer calculates it.
If you resign
For open-ended contracts, resignation changes the amount:
Service when you resign | Indemnity |
|---|---|
Under 3 years | None |
3 to under 5 years | Half |
5 to under 10 years | Two thirds |
10 years or more | Full |
When you get the full amount
- Your employer ends the contract (other than for the specific serious reasons below).
- A fixed-term contract ends and isn't renewed.
- You leave because of a reason the law recognises, such as the employer breaching the contract.
- A female worker ends her contract within one year of marriage.
When you can lose it
Under Article 41, an employer can dismiss a worker without indemnity only for a few serious reasons — such as a mistake causing heavy loss, getting the job by fraud, or disclosing work secrets. The worker must be told in writing and heard first.
Worked examples
Example 1: contract ends after 4 years, KWD 600 a month
- 4 × 15 days = 60 days; daily wage 600 ÷ 26 ≈ KWD 23.08
- Indemnity: 60 × 23.08 ≈ KWD 1,385
Example 2: employer ends contract after 8 years, KWD 900
- First 5 years: 5 × 15 days = 75 days ≈ 75 × 34.62 = KWD 2,596
- Next 3 years: 3 months × 900 = KWD 2,700
- Indemnity ≈ KWD 5,296
Example 3: you resign after 8 years, KWD 900
- Full amount ≈ KWD 5,296
- Resigning between 5 and 10 years: two thirds ≈ KWD 3,531
Practical tips
- Check the 3-, 5- and 10-year marks before you resign — crossing one changes your share.
- Know your full wage. Allowances usually count, so check every line on your payslip.
- Get a written final settlement, including unused annual leave, which is paid in cash when the contract ends.
- Don't wait. If your employer denies a claim, it may not be heard after one year from the end of the contract. Start with the Labour Department.
The bottom line
In Kuwait, monthly-paid staff earn 15 days of their full wage a year for five years, then a month a year, up to 18 months — reduced if you resign before 10 years. Know your numbers before you hand in notice.
Related guides
- Qatar End-of-Service Gratuity Explained (2026): Rules and Examples
- Saudi End-of-Service Award Explained (2026): Rules, Resignation and Examples
- How to Send Money Home From the Gulf Without Losing It in Fees
Sources
Frequently asked questions
Is the indemnity taxed in Kuwait?
No. Kuwait doesn't tax employment income.
Can my employer deduct a loan from it?
Yes. Amounts you owe the employer, such as loans, can be deducted.
Do Kuwaiti nationals get the same?
Kuwaiti employees are also covered by the social security system (PIFSS), and employers can't deduct their social-security contributions from a Kuwaiti employee's indemnity.
Comments & ratings
No comments yet. Be the first to share your view.