CalcKitIf you work in Kuwait's private sector, your employer owes you a lump sum called end-of-service indemnity — usually just called gratuity — when your job ends. It is a legal entitlement under Kuwait Labour Law No. 6 of 2010, Articles 51 and 53. The formula is simple once you know the two numbers that make Kuwait different from its neighbours: a 26-day working month, and a resignation scale that can cut your payout.
The gratuity formula
Kuwait pays monthly-paid workers 15 days' wage for each of the first five years of service, then one full month's wage for each year after that. The daily wage is your monthly salary divided by 26 — Kuwait counts a working month as 26 days, not 30, because the weekly rest day is not a working day. Using 30 instead of 26 understates your first-five-years amount by about 15%.
Daily wage = monthly salary ÷ 26
First five years: 15 days × daily wage × years (up to 5). Year six onwards: one month's salary × each extra year. One hard limit applies: your total indemnity can never exceed 18 months' salary.
Worked example
Take an employee earning KWD 500 a month who completes 7 years of service and is terminated. Daily wage = 500 ÷ 26 = KWD 19.23. First five years: 15 days × 5 years × 19.23 = KWD 1,442.31. Years six and seven: 2 × KWD 500 = KWD 1,000. Total gratuity = KWD 2,442.31. Try your own numbers in our free Gratuity Calculator — select Kuwait and it runs the same formula instantly.
Resigning? Your payout shrinks
Kuwait is stricter than the UAE here: in the UAE, resigning changes nothing, but in Kuwait, resigning from an indefinite contract cuts your indemnity under Article 53. With under 3 years of service you get nothing; 3 to under 5 years you get half; 5 to under 10 years you get two-thirds; 10 years or more you get the full amount. Termination always pays the full accrued amount, whatever your length of service. On a fixed-term contract that runs to its end date, the Article 53 reduction does not apply.
Using the same example: our 7-year employee who resigns gets two-thirds of KWD 2,442.31 — KWD 1,628.21 — instead of the full amount. Timing a resignation just past a threshold year can be worth real money, so check your service dates before you hand in your notice.
Who qualifies for gratuity?
You qualify once you complete one full year of continuous service in the private sector. Less than a year of service means no indemnity, and any partial year after the first is paid proportionally. The rules cover private-sector employees who are not covered by the Public Institution for Social Security (PIFSS), which covers Kuwaiti nationals. Domestic workers fall under a separate law (Law No. 68 of 2015) and receive one full month's salary per year of service. Employees dismissed for serious misconduct can lose the entitlement — confirm your case with the labour authority rather than relying on any calculator.
Which salary counts?
This is the detail to check before you accept a final settlement. Most calculators — including ours — use your basic salary, and many guides say basic salary only. But the law's own wording points to the last wage paid, which can include regular allowances, and the point is disputed. If your contract shows a low basic salary with most pay labelled as allowances, ask HR how your indemnity was calculated and check current rules before you sign.
The 18-month cap
No matter how long you serve, your indemnity cannot exceed 18 months' salary. For most employees this cap never bites — it typically only matters after around 20 years of service — but very long-serving staff should still check it against their final figure.
Daily, weekly and hourly workers
Workers paid by the day, week, hour or piece follow a lower scale: 10 days' wage for each of the first five years and 15 days for each year after, capped at one year's pay rather than 18 months. The Article 53 resignation scale applies to them too.
When do you get paid?
Your indemnity should be settled as part of your final settlement when your employment ends. If payment is delayed, disputed or lower than your own calculation, raise it with your employer's HR first, then with the Public Authority for Manpower (PAM), which handles labour complaints in Kuwait.