End-of-service indemnity in Kuwait: how it is commonly worked out

The common description of the sum

Private-sector indemnity in Kuwait is governed by the labour law known as Law 6, and commentary usually points to Articles 51 to 53. As commonly described, the worker receives fifteen days of pay for each of the first five years of service, and then one month of pay for each later year.

Commentary also describes a ceiling: the total is capped at one and a half years of pay. Part years are usually counted in proportion. Treat all of this as a description of what guides say, and check it against the text and current practice before you act on it.

When the worker resigns

Resignation is described differently from dismissal. Commentary says a resigning worker receives only a share of the full amount, and that the share grows with length of service.

• Under three years of service: commonly described as nothing.
• From three to five years: about half of the full amount.
• From five to ten years: about two thirds.
• After ten years: the full amount.

What to confirm before you rely on a number

Three points cause most disagreements, and guides describe them differently. First, which pay counts: basic pay only, or basic pay with regular allowances. Second, the day divisor used to turn a monthly wage into a daily one. Third, the resignation shares above and how part years are rounded.

Write down the answers you are given, and who gave them. If the figure matters, because a worker is leaving or a dispute has started, confirm it with the Public Authority for Manpower or with your lawyer. Do not settle it from a guide alone, including this one.

A small worked example

Suppose a worker has served six years and the pay that counts is KWD 400.000 a month, with a divisor of twenty-six days. Fifteen days for each of the first five years is seventy-five days. One month for the sixth year adds a month. The first part is about seventy-five days of the daily rate; the second is KWD 400.000. Add them, compare with the ceiling, and apply the resignation share if it applies.

Change the pay that counts or the divisor and the answer moves. That is exactly why the confirmations above matter, and why any single figure should be read as an estimate.

Our calculator, and where TAQNIX ERP fits

Our free end-of-service calculator does the sum for you from the dates, the pay that counts and the reason for leaving. It gives an estimate, shows its working, and does not replace the confirmations above.

TAQNIX ERP is a different tool. It is a program on a Mac that opens in the browser and handles invoices, quotations, orders, point of sale and payment tracking. It has no payroll or HR module, so it does not work out indemnity.