Kuwait Annual Leave Law — Article 70 Explained
Under Article 70 of Kuwait Labour Law No. 6 of 2010, every private sector employee is entitled to 30 calendar days of paid annual leave per year after completing one year of continuous service with the same employer.
Employees who have not yet completed a full year but have worked at least 6 months are entitled to pro-rata annual leave — calculated based on the number of months worked.
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Article 71 — Pay before leave: Your employer must pay your full leave salary before you start your annual leave — not on your return. This is a legal requirement in Kuwait. If your employer pays you after your vacation, they are in violation of Kuwait Labour Law.
How to Calculate Annual Leave Salary in Kuwait
The annual leave salary formula in Kuwait is straightforward — but there is one critical rule most employees get wrong: the transport allowance is excluded.
📐 Kuwait Annual Leave Salary Formula (Article 70)
Daily Rate = (Basic Salary + Housing + Other Allowances) ÷ 26
Leave Salary = Daily Rate × Number of Leave Days
❌ Transport allowance is NOT included in this calculation
The divisor of 26 represents the number of working days in a month (5-day workweek × 52 weeks ÷ 12 months ≈ 21.67, but Kuwait uses 26 as the standard divisor under Ministry of Manpower guidance). Some employers use 22 (for workers on 5-day weeks) or 30 (as a simplified daily rate) — confirm with your contract.
Why is transport allowance excluded?
The Ministry of Social Affairs and Labour confirmed this exclusion: transport allowance is paid specifically to cover the cost of commuting to work. Since you are not commuting during annual leave, this allowance is not payable during the leave period. All other regular allowances — housing, food, children's education allowance, etc. — are included.
Annual Leave Salary Calculation Examples
Example 1 — Standard 30-Day Annual Leave
Basic SalaryKD 400
Housing AllowanceKD 150
Transport Allowance (excluded)KD 50 ❌
Salary Basis (400 + 150)KD 550
Daily Rate (550 ÷ 26)KD 21.154
Leave Days30 days
Total Leave Salary (21.154 × 30)KD 634.615
Example 2 — Pro-Rata Leave (8 Months Service)
Monthly Salary BasisKD 600
Daily Rate (600 ÷ 26)KD 23.077
Annual Entitlement30 days
Pro-Rata Days (30 × 8/12)20 days
Pro-Rata Leave Salary (23.077 × 20)KD 461.538
Annual Leave Rules & Entitlements
| Rule | Detail | Article |
|---|
| Annual Entitlement | 30 calendar days per year | Art. 70 |
| Eligibility | After 1 year of service (pro-rata after 6 months) | Art. 70 |
| Payment Timing | Must be paid before leave starts | Art. 71 |
| Carryover | Unused leave can be carried over up to 2 years | Art. 72 |
| Public Holidays | Not counted as part of annual leave | Art. 70 |
| Encashment | Unused leave paid out at end of service | Art. 72 |
| Transport Allowance | Excluded from leave salary calculation | MOL Ruling |
| Splitting Leave | Employer can split into max 2 periods | Art. 70 |
| Sick Leave During Annual Leave | If hospitalised during annual leave, days can be replaced | Art. 70 |
What Happens to Unused Annual Leave?
Under Article 72, unused annual leave can be carried forward for up to 2 years with your employer's approval. Beyond 2 years, your employer can either:
- Encash the unused days (pay you in lieu at your daily rate)
- Schedule you to take the leave
At end of service — whether you resign, are terminated, or retire — all accumulated unused annual leave must be paid out in full. This is a legal obligation under Kuwait Labour Law. The payout is calculated at your daily rate at the time of leaving, not at the rate you earned when the leave was accumulated.
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End-of-service tip: If you have accumulated significant unused leave, your leave encashment is calculated on your current daily rate — not your rate when the leave was earned. If your salary has increased over the years, this works in your favour.
Annual Leave During Notice Period
If you resign or are terminated, annual leave entitlement continues to accrue during your notice period. If you take annual leave during notice, it is counted as part of your notice period. If you do not take it, it is paid out as encashment in your final settlement.
Annual Leave Kuwait — FAQ
How is annual leave salary calculated in Kuwait?
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Annual leave salary = (Monthly salary excluding transport allowance) ÷ 26 × number of leave days. The transport allowance is specifically excluded by Ministry of Labour ruling. All other regular allowances are included.
How many days annual leave am I entitled to in Kuwait?
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Under Article 70 of Kuwait Labour Law No. 6 of 2010, you are entitled to 30 calendar days of paid annual leave per year after completing one full year of service. Employees who have completed at least 6 months but not yet a full year are entitled to pro-rata leave.
Is transport allowance included in annual leave salary in Kuwait?
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No. The transport allowance is specifically excluded from annual leave salary in Kuwait. The Ministry of Labour confirmed this — transport is paid for commuting to work, and since you are not commuting during leave, it is not included. All other regular allowances (housing, food, etc.) are included.
Can I encash unused annual leave in Kuwait?
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Yes. Under Article 72 of Kuwait Labour Law, unused annual leave can be carried forward for up to 2 years. After that, it can be encashed at your current daily rate. At end of service, all unused annual leave must be paid out regardless of reason for termination or resignation.
When must annual leave salary be paid in Kuwait?
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Article 71 of Kuwait Labour Law clearly states that the leave salary must be paid to the employee before they start their annual leave — not on their return. This is a legal requirement and failure to comply is a violation of Kuwait Labour Law.
Are public holidays counted in annual leave in Kuwait?
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No. Public holidays and official rest days (Fridays/Saturdays depending on your workweek) that fall within your annual leave period are not counted as part of your 30 days. For example, if Eid Al Fitr falls during your leave, those days are not deducted from your leave balance.
What happens to annual leave if I resign?
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If you resign, your employer must pay you for all accumulated unused annual leave days at your daily salary rate as part of your final settlement. This applies even if you have not completed a full year — you are entitled to pro-rata leave for the months worked after your 6-month eligibility period.
Why does Kuwait use 26 as the divisor for daily rate?
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Kuwait Labour Law uses 26 working days per month as the standard for calculating daily rates for annual leave, overtime and indemnity. This is based on a 5-day working week: 5 days × 52 weeks = 260 working days per year ÷ 10 months' equivalent = 26. Some employers use 22 (based on 4.33 weeks × 5 days) or 30 (simplified calendar month) — always check your employment contract.
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Disclaimer: This calculator is for informational purposes only and is based on Kuwait Labour Law No. 6 of 2010. Actual leave entitlements may vary based on your employment contract, industry-specific regulations or ministerial resolutions. Always confirm with your HR department or a registered Kuwait labour lawyer. KuwaitCalculator.com is not affiliated with any government entity.