Kuwait End-of-Service Indemnity Calculator
Calculate your gratuity accurately. Applies to all expat private-sector employees. Updated for 2026.
What Is Kuwait End-of-Service Indemnity?
Kuwait End-of-Service Indemnity — also called gratuity or end-of-service benefit (EOSB) — is a mandatory lump-sum payment that every private-sector employer in Kuwait must pay an employee when their employment ends. It is governed by Kuwait Labor Law No. 6 of 2010 and applies to all expatriate employees working in the private sector, regardless of nationality.
Indemnity is not a bonus or a discretionary payment — it is a legal right. Employers who fail to pay within 7 days of the employment end date are in violation of Kuwait labor law and can be reported to the Ministry of Social Affairs and Labor (MOSAL).
Article 51 — How Indemnity Accrues
Article 51 of Kuwait Labor Law No. 6 of 2010 defines the accrual formula for end-of-service indemnity. The law splits service into two tiers based on years worked:
- ① First 5 years of service: The employee earns 15 days of basic salary for each completed year of service. Daily salary is calculated as monthly basic salary divided by 26 working days.
- ② After 5 years of service: From year 6 onward, the rate doubles to 30 days of basic salary per year. The first 5 years remain calculated at the 15-day rate — they do not retroactively increase.
- ③ Partial years are included: If an employee has served, say, 7 years and 4 months, the 4 months beyond the 7th full year are also compensated on a pro-rata basis at the applicable daily rate.
- ④ Indemnity cap: The total indemnity amount cannot exceed the equivalent of 1.5 years of total salary, regardless of total service duration.
Employee with KD 500/month basic salary and 8 years of service:
Daily salary = 500 ÷ 26 = KD 19.231
First 5 years: 19.231 × 15 × 5 = KD 1,442.31
Next 3 years: 19.231 × 30 × 3 = KD 1,730.77
Total = KD 3,173.08 (before resignation reduction, if applicable)
Resignation vs. Termination — Indefinite Contracts
One of the most critical factors in your indemnity payout is why your employment ended. Kuwait Labor Law reduces indemnity for employees who voluntarily resign on an indefinite (open-ended) contract. Employees who are terminated by the employer always receive 100% of their calculated indemnity.
| Reason for Leaving | Years of Service | % of Indemnity Paid |
|---|---|---|
| Terminated by employer | Any duration | 100% |
| Resigned (indefinite contract) | Under 3 years | 0% |
| Resigned (indefinite contract) | 3 to 5 years | 50% |
| Resigned (indefinite contract) | 5 to 10 years | 66.67% |
| Resigned (indefinite contract) | 10+ years | 100% |
⚠️ Important: The resignation reduction only applies to indefinite (open-ended) contracts. If you are on a fixed-term contract and complete it or are terminated, you are entitled to 100% of your calculated indemnity. If you leave before a fixed-term contract expires without justification, you may receive nothing. Always check your contract type before calculating.
What Is Included in Indemnity Calculations?
- ✓Basic salary only — indemnity is calculated on your basic (base) salary. Housing allowances, transport allowances, and other benefits are excluded unless specifically stated in your contract.
- ✓Unused annual leave — any accrued and unused paid leave days are compensated at your daily salary rate on top of your indemnity.
- ✗Overtime, bonuses, commissions — these are generally not included in the indemnity base unless your contract explicitly includes them.
- ✗Notice period in lieu of notice — if your employer terminates you without serving the required notice period, they must pay salary for that notice period separately; it is not part of indemnity.
When Must Indemnity Be Paid?
Kuwait Labor Law No. 6 of 2010 requires the employer to pay all outstanding dues, including indemnity, within 7 days of the end of employment. If your employer delays or refuses, you have the right to file a complaint with the Ministry of Social Affairs and Labor (MOSAL) at msal.gov.kw. The complaint process is free and available to all private-sector workers.
Frequently Asked Questions
No. The Kuwait Labor Law probation period is a maximum of 100 days. If employment ends during this period, indemnity is generally not payable. Once you pass probation and complete one full year, indemnity accrual begins.
An employer may deduct certain amounts owed (such as salary advances, loans, or damages caused by the employee) from the indemnity, but they cannot deduct amounts that would reduce indemnity below the legally mandated minimum. Deductions must be documented and agreed upon.
Domestic workers (housemaids, drivers, cooks, etc.) are covered by a separate law — Law No. 68 of 2015 for Domestic Workers. They are entitled to indemnity of one month's salary per year of service after two or more years of employment. The calculation here applies to private-sector (non-domestic) employees under Law No. 6 of 2010.
Article 41 of Kuwait Labor Law No. 6 of 2010 lists specific cases where an employer may terminate an employee without notice and without indemnity — these include serious misconduct, fraud, assault, or disclosure of trade secrets. Outside of these Article 41 cases, even terminated employees are entitled to full indemnity.
ℹ️ Disclaimer: This calculator and guide are for informational purposes only. While every effort is made to keep the information accurate and up to date, it does not constitute legal advice. Kuwait labor laws may change — always verify with MOSAL (msal.gov.kw) or consult a qualified HR professional or labor lawyer for your specific situation.
More Indemnity Questions
⚖️Can an employer withhold indemnity if an employee resigns in Kuwait?
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An employer cannot withhold indemnity as a punishment or negotiation tactic — it is a legal right under Kuwait Labor Law No. 6 of 2010. However, Article 53 reduces the payout when an employee voluntarily resigns from an indefinite contract:
Under 3 years of service: The employee receives 0% — no indemnity at all. This is the minimum threshold. If you resign before completing 3 full years, you forfeit your entire end-of-service benefit.
3 to 5 years: You receive 50% of the calculated indemnity.
5 to 10 years: You receive 66.67% of the calculated indemnity.
10+ years: You receive 100% — full indemnity, same as if terminated.
If you are terminated by the employer (not for cause under Article 41), you always receive 100% regardless of years served. The employer must pay within 7 days of employment end — delay is a violation reportable to MOSAL.
📅How does unpaid leave affect end-of-service benefits in Kuwait?
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Unpaid leave days are subtracted from your total continuous service period when calculating indemnity. This is because indemnity accrues based on actual working time, and days where no salary was paid do not count toward service.
For example: if you worked for 5 years but took 60 days of unpaid leave during that time, your indemnity is calculated on 5 years minus 60 days (approximately 4 years and 10 months of effective service).
Paid annual leave is not deducted — those days count toward your service. Only leave where you received zero salary is subtracted. Sick leave days that were paid (first 15 days at full pay) also count as service.
If you had extended unpaid leave (e.g. 6+ months for personal reasons), this can significantly reduce your indemnity — especially if it pushes you below the 3-year or 5-year threshold for resignation entitlement.
💰Is indemnity calculated on basic salary or total salary in Kuwait?
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Under Kuwait Labor Law, indemnity is calculated on basic salary only — not the total package. Housing allowance, transport allowance, and other benefits are excluded from the indemnity calculation unless your contract explicitly states otherwise.
However, if your salary is a single "package" amount with no breakdown (no separate basic/allowance split), then the entire package is treated as basic salary for indemnity purposes. This is a critical distinction — if your contract shows "KD 800 all-inclusive" with no breakdown, your daily rate is 800 ÷ 26 = KD 30.77. If it shows "KD 500 basic + KD 300 housing", your daily rate is only 500 ÷ 26 = KD 19.23.
Always check your contract and payslip structure before calculating.