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End-of-Service Benefits Guide: Kuwait

This guide explains the key end-of-service rules in Kuwait in plain language, based on Law No. 6 of 2010 Regarding Labor in the Private Sector. Every figure comes from the official texts listed under Sources below, and the worked example is computed by our own calculator.

Scope: private-sector employees covered by the labour law. Excludes domestic workers, free-zone employees under separate regimes, and workers covered by national pension/social-insurance systems.

Who qualifies?

  • On termination or contract expiry: no statutory minimum service period.
  • On resignation: minimum: 3 years of service.

The reduced resignation rates apply to indefinite-term contracts.

How is the award calculated?

The award is based on the "the last wage — basic plus regular allowances", with fractions of a year pro-rated to actual service. The formula:

  • 15 days for each year during the first 5 years of service
  • a full month for each year after that

Worked example

An employee on a monthly wage of 10,000 KWD with 6 years of service (termination case):

  • 5 years × 15 days of the wage = 28,846.15 KWD
  • 1 year × a full month of the wage = 10,000 KWD
  • Total: 38,846.15 KWD
  • Had this been a resignation, the total would be: 25,897.44 KWD.

Resignation vs termination

The law applies reduced rates to resignation depending on length of service:

  • from 3 to 5 years: half the award
  • from 5 to 10 years: two-thirds of the award
  • 10 years or more: the full award

Cap on the award

statutory cap: 18 months of wages

Notice period and annual leave

  • Notice (Indefinite contracts, monthly-paid workers (Art 44)): employee 90 days / employer 90 days.
  • Notice (Indefinite contracts, other workers (Art 44)): employee 30 days / employer 30 days.
  • Annual leave: 30 days — Fully paid; none in the first year until 9 months; pro-rata fractions; cash offset for unused leave on termination (Arts 70, 73).

Common mistakes

  • Expecting an award on resignation after short service — nothing is due before the minimum is completed.
  • Forgetting the statutory cap on the award.
  • Confusing the last wage with an average wage — the law uses the last wage paid.

Notes on the figures

  • Days are converted to months by dividing by 26 working days, per published practice.

Official sources

Every figure in this guide comes from the following official sources:

Frequently asked questions

Do allowances count towards the award in Kuwait?
Wages in Kuwait are assessed on the "the last wage — basic plus regular allowances" basis. See "How is the award calculated?" above for details.
Is the award lower if I resign?
Yes — the law applies reduced resignation rates depending on length of service: from 3 to 5 years: half the award; from 5 to 10 years: two-thirds of the award; 10 years or more: the full award
When and how is the award paid?
On termination the worker also gets a cash offset for all unused annual leave (Article 73). Debts/loans owed to the employer are deducted from the benefit.
Are fractions of a year counted?
Yes — fractions of a year are pro-rated to the actual period of service.

Related links

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