What is end-of-service indemnity in Kuwait?
End-of-service indemnity is a lump sum your employer must pay when your private-sector job in Kuwait ends. Expats often call it gratuity, and in Arabic it is mukafa'at nihayat al-khidma. It works as a reward for years of service and as a cushion while you move to a new job or leave the country. It is not a gift and it is not optional: Kuwaiti labour law sets a minimum amount, and an employment contract cannot reduce or waive it.
The rules sit in the Private Sector Labour Law, Law No. 6 of 2010, mainly in Articles 51, 52 and 53. Article 51 sets the rates and the cap, Article 52 lists the cases where you always receive the full amount, and Article 53 reduces the indemnity when an employee on an open-ended contract resigns. The law was amended by Law No. 85 of 2017 and Law No. 17 of 2018, which replaced the last paragraph of Article 51 so that employers can no longer deduct their social security (PIFSS) contributions from a Kuwaiti employee's indemnity. Law No. 17 of 2018 applied that change back to the start of Law No. 6 of 2010.
The Public Authority of Manpower (PAM) supervises private-sector employment and handles labour complaints. When we checked in October 2026 we found no 2025 or 2026 amendment to Articles 51 or 53. Recent PAM resolutions dealt with matters such as recording working hours (Ministerial Resolution No. 15 of 2025), not indemnity rates. The indemnity calculator Kuwait workers use on this page applies the rules as they currently stand.
Kuwait indemnity rates under Article 51
Your indemnity depends on how you are paid, how long you worked and your last remuneration. Article 51 gives two scales:
| How you are paid | First 5 years | Each year after 5 | Maximum |
|---|---|---|---|
| Monthly salary | 15 days' remuneration per year | One month's remuneration per year | 1.5 years' remuneration (18 months) |
| Daily, weekly, hourly or piece rate | 10 days' remuneration per year | 15 days' remuneration per year | 1 year's remuneration |
Part of a year counts in proportion. If you worked 6 years and 4 months, the 4 months earn 4/12 of a full year's entitlement at the rate that applies at that point. You do not lose the partial year, and you do not need to reach a full year before anything is due when your employer ends the contract.
What counts as “remuneration”
Article 55 defines remuneration broadly: basic salary plus the regular elements your contract or company rules give you, such as fixed allowances, periodic bonuses and benefits. The social allowance and children's allowance paid to Kuwaitis under Law No. 19 of 2000 are left out. Where pay varies, cash and in-kind benefits are averaged over the last 12 months, or over your whole service if shorter. In practice many disputes come down to this single point, so check whether your employer used basic salary only or your full fixed package. Enter the figure you believe is correct in the calculator.
How the indemnity calculation works
For a monthly-paid employee the calculation has four steps.
- Find your daily wage. Daily wage = last monthly remuneration ÷ 26. The law does not print the divisor, but 26 working days is the standard Kuwaiti practice described by local lawyers and HR guides. Some employers use 30.
- Calculate the first five years. Years in the first five (up to 5, including any fraction) × 15 × daily wage.
- Add the later years. Years beyond five (including any fraction) × one month's remuneration.
- Apply the cap and the reason. Limit the total to 18 months' remuneration, then multiply by the share that applies to your reason for leaving (full, half, two-thirds or nothing).
Indemnity = [min(service, 5) × 15 × (salary ÷ 26) + max(service − 5, 0) × salary] capped at 18 × salary, × reason share
Service is measured in years with decimals. A period of 2 years, 3 months and 10 days becomes 2 + 3/12 + 10/365 = 2.2774 years.
Worked examples with real numbers
Example 1: short service, contract ended by employer
This example matches one published by a Kuwaiti expat guide (kuwait.it.com). Noah earns KWD 1,430 a month and worked 2 years, 3 months and 10 days before his employer ended his contract.
| Daily wage: 1,430 ÷ 26 | KWD 55.000 |
| 2 full years × 15 days × 55 | KWD 1,650.000 |
| 3 months: 3/12 × (15 × 55) | KWD 206.250 |
| 10 days: 10/365 × (15 × 55) | KWD 22.603 |
| Indemnity | KWD 1,878.853 |
If Noah had resigned instead, he would receive nothing, because a resigning employee needs at least three years of service on an open-ended contract.
Example 2: eight years, terminated versus resigned
This follows the structure of an example in a Gulf employment-law guide (Teamed): after 8 years the indemnity is 75 days' wage for the first five years plus 3 months' wage for the next three. Using a salary of KWD 1,300:
| Daily wage: 1,300 ÷ 26 | KWD 50.000 |
| First 5 years: 5 × 15 × 50 (75 days) | KWD 3,750.000 |
| Years 6 to 8: 3 × 1,300 | KWD 3,900.000 |
| Full indemnity (terminated) | KWD 7,650.000 |
| If resigned: two-thirds (service between 5 and 10 years) | KWD 5,100.000 |
Example 3: when the 18-month cap applies
An accountant on KWD 900 a month retires after 25 years. Uncapped, the formula gives 5 × 15 × 34.615 = KWD 2,596.15 plus 20 × 900 = KWD 18,000, a total of KWD 20,596.15. The cap is 18 × 900 = KWD 16,200, so that is the most the law requires. With a salary of KWD 900, any service longer than about 20 years and 1 month hits the cap (with the ÷ 26 rule, the cap for any monthly salary is reached at roughly 20.1 years).
How the reason for leaving changes your indemnity
The reason your job ended is often worth more than the number of years. These are the cases the law sets out.
| Situation | Share of indemnity | Legal basis |
|---|---|---|
| Employer ends the contract | 100% | Art. 51 |
| Fixed-term contract expires and is not renewed | 100% | Art. 52 |
| Employee leaves because of an employer breach listed in Art. 48 (unpaid wages, assault, danger to health, fraud at hiring) | 100% | Art. 48, 52 |
| Death, total disability, or illness that exhausts sick leave | 100% | Art. 49, 52 |
| Company closes permanently or is declared bankrupt | 100% | Art. 50, 52 |
| Female employee resigns within one year of her marriage | 100% | Art. 52 |
| Resignation, open-ended contract, under 3 years | 0% | Art. 53 |
| Resignation, 3 to 5 years | 50% | Art. 53 |
| Resignation, more than 5 and under 10 years | 66.7% | Art. 53 |
| Resignation, 10 years or more | 100% | Art. 53 |
| Dismissal under Art. 41(a): serious error causing gross loss, hiring through fraud, or disclosing secrets | 0% | Art. 41 |
Article 53 applies only to open-ended (indefinite) contracts. If you walk out of a fixed-term contract before it ends, the issue is usually compensation for breaking the contract rather than the Article 53 scale, and the result depends on the facts. Unexcused absence for 7 days in a row or 20 days in a year can be treated as resignation under Article 42, which means the Article 53 shares apply.
Dismissal for other disciplinary reasons under Article 41(b), such as a breach of company rules, does not on its own remove your indemnity. Only the Article 41(a) grounds do. If you believe you were dismissed arbitrarily, a court can award compensation on top of the indemnity.
Unused annual leave and other final dues
Indemnity is only one part of your final settlement. Your employer should also pay any salary owed up to your last day, payment for unused annual leave, and notice pay if notice was not given or worked. Monthly-paid employees on open-ended contracts are entitled to three months' notice under Article 44. The calculator adds unused leave at your daily wage if you enter the days, because leave pay is usually paid with the indemnity. It does not add notice pay or unpaid salary, so add those yourself.
Common mistakes when calculating Kuwait indemnity
- Using basic salary only. The law uses remuneration, which includes regular allowances. If your employer used basic pay alone, ask for the reason in writing.
- Mixing up the two scales. Some online calculators apply the daily-worker rates of 10 and 15 days to monthly-paid staff. Monthly-paid staff get 15 days and then a full month.
- Overstating the later years. A few guides multiply the daily wage (salary ÷ 26) by 30 for each year after five. That pays more than one month's salary per year. The law says “one month's remuneration,” so this calculator uses your monthly salary.
- Ignoring the cap. Long-serving employees often expect one month per year for every year. The total stops at 18 months' pay.
- Treating a resignation at exactly 3 years as nothing. Service of 3 years or more, up to and including 5, earns half on resignation.
- Applying the resignation cut to a fixed-term contract that simply ran to its end date. That is a full-indemnity case.
- Accepting PIFSS deductions. Since the 2017 and 2018 amendments, an employer cannot subtract its social security contributions from a Kuwaiti employee's indemnity. Loans you genuinely owe the employer can still be deducted.
Who this applies to, and who it does not
These rules cover employees in Kuwait's private sector under Law No. 6 of 2010, both expats and Kuwaiti nationals, on fixed-term or open-ended contracts. They do not cover:
- Government and public-sector employees, who fall under civil service rules.
- Domestic workers, who are covered by Law No. 68 of 2015 and get one month's pay for each year of service at the end of the contract.
- Oil-sector employees covered by the separate oil-sector labour law, where it applies, and anyone whose contract or collective agreement gives better terms. A contract can always pay more than the legal minimum, never less.
For Kuwaiti nationals registered with PIFSS, the indemnity interacts with the social security system, which is why the 2017 and 2018 amendments mattered. Kuwaitis should confirm their final figure with HR and PIFSS.
How to claim unpaid indemnity
Ask your employer for a written final settlement that shows the salary figure, service dates and the formula used. Compare it with the result from this calculator. If there is a gap you cannot resolve, file a complaint with the Labour Relations department of the Public Authority of Manpower, which will try to settle the dispute before it goes to the labour court. Claims for indemnity and other contract rights are subject to a one-year limitation period from the end of the contract under Article 144, so do not wait. Keep copies of your contract, payslips, civil ID and any resignation or termination letter.
You can find official information and e-services on the Public Authority of Manpower website. Working in another Gulf country? Our Qatar end-of-service calculator and UAE leave salary calculator follow their local laws.
Indemnity calculator Kuwait: frequently asked questions
How is indemnity calculated in Kuwait?
For monthly-paid private-sector staff, you get 15 days' remuneration for each of the first five years and one month's remuneration for each year after that, with partial years counted in proportion. The total cannot exceed 18 months' pay. The daily wage is usually the monthly salary divided by 26.
Do I get indemnity if I resign in Kuwait?
On an open-ended contract you get nothing with less than 3 years of service, half with 3 to 5 years, two-thirds with more than 5 and under 10 years, and the full amount with 10 years or more.
How much indemnity for 5 years of service in Kuwait?
If your employer ends the contract, 75 days' remuneration (5 × 15 days). With a KWD 1,000 salary and the ÷ 26 rule that is about KWD 2,884.62. If you resign at exactly 5 years you receive half, about KWD 1,442.31.
What is the maximum indemnity in Kuwait?
One and a half years' remuneration, which is 18 months' pay for monthly-paid employees. Daily, weekly, hourly and piece-rate workers are capped at one year's pay.
Is indemnity calculated on basic salary or total salary?
The law uses “remuneration,” defined in Article 55 to include regular allowances and benefits on top of basic pay. The social and children's allowances paid to Kuwaitis are excluded.
Why do some calculators divide by 26 and others by 30?
Law No. 6 of 2010 says “15 days' remuneration” but does not state the divisor. Kuwaiti practice usually treats a month as 26 working days, so 15 days equals 15/26 of a month. Some employers use 30 calendar days, which gives a slightly lower figure. This calculator lets you pick either.
Does a woman get full indemnity if she resigns after marriage?
Yes. Under Article 52 a female employee who ends her contract within one year of her marriage receives the full indemnity, whatever her length of service.
Has Kuwait changed the indemnity law in 2025 or 2026?
We found no change to the indemnity rates or resignation shares in 2025 or 2026. The last changes to Article 51 came from Law No. 85 of 2017 and Law No. 17 of 2018, which stopped employers deducting social security contributions from the indemnity.
Can my employer pay less indemnity than the law says?
No. The amounts in Law No. 6 of 2010 are minimums, and any contract term that reduces them is void. Your employer can pay more.
Rates verified: October 2026 against Law No. 6 of 2010 and its 2017 and 2018 amendments. This page gives an estimate for general information and is not legal advice. For a binding figure, ask your employer, the Public Authority of Manpower or a Kuwaiti lawyer.