Kuwait Indemnity Free Calculator and Law 2026.

Kuwait Indemnity Guide 2026: End-of-Service Gratuity Explained

Your end-of-service indemnity — also called gratuity, end-of-service benefit (EOSB) or final settlement — is money your employer must pay you when your job in Kuwait ends. This guide explains, in plain language, how it is calculated, how resignation changes it, what else you are owed, and what to do if your employer does not pay.

✔ Checked against Kuwait Labour Law No. 6 of 2010 and Domestic Workers Law No. 68 of 2015 · Updated October 2026 · Kuwait Upto Date

How to use the Kuwait indemnity calculator

1. Choose your sector — private sector (Law 6/2010) or domestic worker (Law 68/2015).
2. Choose how the job ends — your employer ends the contract, or you resign.
3. Enter your monthly salary in KD — your basic salary plus fixed allowances.
4. Pick your joining date and last working day — the calculator works out your exact service, to the day.
5. Read your result — your indemnity in KD, the percentage you are entitled to, and when you reach your next milestone.
6. Add your other dues — unused leave, notice pay and unpaid salary — to see your full final settlement, then share it, print it, or create an early settlement request letter for HR.

What is end-of-service indemnity in Kuwait?

End-of-service indemnity is a one-time payment from your employer when your employment ends. It rewards your years of service and helps you through the move to a new job or back home. It is paid by the employer — it is not a government pension — and private-sector workers have the same right to it whether they are Kuwaiti or expatriate.

The legal basis

• Private sector: Kuwait Labour Law No. 6 of 2010. Article 51 sets the formula and the 18-month maximum, and Article 53 sets the reduced shares for workers who resign.
• Domestic workers: Law No. 68 of 2015 on Domestic Workers — one month’s salary for each year of service.
• Government employees: civil service rules, with Kuwaiti nationals covered by the PIFSS pension system (see below).

How Kuwait indemnity is calculated, step by step

Step 1 — Work out your daily wage

For the private sector, divide your monthly salary by 26 (the law counts 26 working days in a month).

Step 2 — Count the days you have earned

• First 5 years: 15 days’ pay for each year.
• After 5 years: 30 days’ pay for each additional year.
• Part years: counted in proportion — six extra months earn half a year’s days.

Step 3 — Multiply and apply the 18-month cap

The total can never be more than 18 months of your salary. You reach that ceiling after about 18 years of service.

Step 4 — Apply your share if you resign

If your employer ends the contract you receive the full amount. If you resign, you receive a share that depends on your years of service (see the table below).

Quick reference: indemnity by years of service

Calculated for a monthly salary of 500 KD, private sector. For your own salary, use the calculator above.

Resignation vs termination: how your share changes

Timing matters: if you are close to a milestone (3, 5 or 10 years), resigning a few weeks later can raise your indemnity a lot. The calculator shows when you reach your next milestone and how much more you would receive.

Domestic workers (Law 68/2015)

Housemaids, drivers, cooks and other domestic workers are covered by Law No. 68 of 2015, not the private-sector Labour Law. The rule is simpler: one month’s salary for every year of service, with part years counted in proportion. There is no 15/30-day tier, and the calculator applies the full amount whether the job ends by resignation or by the sponsor.

Government sector & Kuwaiti nationals

Government employees fall under civil service rules rather than Labour Law No. 6 of 2010. Kuwaiti nationals build up retirement benefits with the Public Institution for Social Security (PIFSS), while expatriate government employees receive end-of-service pay under the terms of their contract. This calculator is designed for the private sector and domestic workers; government staff should check their entitlement with their HR department.

What counts as salary for indemnity?

• Include: basic salary plus fixed allowances paid every month as part of your contract, such as housing and transport.
• Usually exclude: occasional payments such as overtime, one-off bonuses and reimbursements.
• Which month? Indemnity is based on your last salary, so a pay rise near the end of your service increases the indemnity for all your years.

Special situations: death, company closure, transfers and more

Most indemnity cases are simple resignations or terminations, but many workers face less common situations. Here is what usually happens in each one, and what you should do.

Death of an employee: what the family receives

When employment ends because the worker dies, the full indemnity is generally payable — there is no resignation reduction — and it is paid to the worker’s legal heirs. The heirs should also receive everything else the worker had earned:

• the end-of-service indemnity for the full period of service;
• salary for the days worked in the final month;
• payment for unused annual leave;
• any other amounts in the contract, such as bonuses or allowances that were already due.

Documents the family usually needs: the death certificate, the worker’s passport and Civil ID, the employment contract, and an official document showing who the legal heirs are (in Kuwait, an inheritance certificate issued through the courts; for expatriates, the embassy can help with documents from the home country). Payment is normally made to the heirs together, or to a person they authorise.

Repatriation: ask HR straight away whether the employer will cover the cost of sending the body home — many employers do, and some contracts require it. The worker’s embassy can also help.

Permanent disability or long illness

If a worker can no longer work because of total disability, the contract ends and the full indemnity is generally payable, as if the employer had ended the contract. Work injuries are handled separately and may give the right to additional compensation. Keep all medical reports and any reports made to the employer about the injury.

Sick leave approved under the Labour Law counts as part of your service while your contract continues.

Company closure or bankruptcy

If your employer closes the business, goes bankrupt or stops operating, your contract ends through no fault of your own, so your indemnity is calculated as if the employer ended the contract — 100%, with no resignation reduction. Workers’ dues are generally treated as priority debts, which means they should be paid before many other creditors.

• Ask for a written calculation of your dues before the company stops operating.
• Keep your contract, salary slips and bank statements — they are your proof if the company disappears.
• If you are not paid, file a complaint with PAM quickly; in a bankruptcy, workers may also need to register their claim with the court handling the case.

Company sold, merged or under a new owner

When a business is sold, merged or taken over, the employment contracts generally continue with the new owner, and your service is counted without a break from your original joining date. You should not lose the indemnity you have built up. If the new owner asks you to sign a “new contract”, check that it keeps your original joining date, or ask for your indemnity up to that date to be settled in writing first.

Transferring your residency to a new employer

When you move to a new employer, your old employer should pay your indemnity for the service with them, based on how that job ended (resignation or termination). Your service with the new employer starts from zero. Before agreeing to a transfer, ask for your final settlement in writing and make sure it is paid — once your residency has moved, it is harder to follow up.

Contract renewals with the same employer

If your contract is renewed again and again with the same employer, your service is generally treated as one continuous period, unless your indemnity was actually paid out at a renewal. Your indemnity is then calculated on your whole service at your last salary — which matters, because after five years each year earns 30 days instead of 15.

Fixed-term contracts ended early

If a fixed-term contract simply ends and is not renewed, you receive your full indemnity. If the employer ends it early without a valid reason, you are generally entitled to your indemnity and may also claim compensation for the early ending. If you leave a fixed-term contract early, the employer may claim compensation from you, so read your contract’s early-termination clause first.

Dismissal and misconduct

An ordinary dismissal — for example restructuring, redundancy or poor performance — still gives you the full indemnity. Only serious misconduct listed in Article 41 (such as causing gross loss to the employer, getting the job by fraud, or revealing company secrets) allows the employer to dismiss you without indemnity. If you are dismissed for misconduct you did not commit, keep every document and complain to PAM.

Notice period

For workers paid monthly, the Labour Law requires 3 months’ notice (Article 44). If your employer ends your contract without notice, you are owed salary for the notice period on top of your indemnity. If you resign and leave without serving notice, the employer may deduct the notice pay from your final settlement — so serve your notice or agree a shorter one in writing.

Unpaid leave, absence and “absconding” cases

Long unpaid leave and unauthorised absences are generally not counted as service. Under Article 42, being absent without an acceptable reason for 7 consecutive days, or 20 separate days in one year, allows the employer to treat you as having resigned — and the resignation shares then apply. If your employer files an “absconding” report against you while you are still working or owed money, act quickly: contact PAM with proof of your attendance and your dues.

Maternity leave

Paid maternity leave under the Labour Law is part of your service and does not reduce your indemnity. Additional unpaid leave taken after it may not count.

Probation period

Once you pass probation and continue working, the probation months count towards your service from your first day.

Retirement and reaching retirement age

When a worker retires, the end of service is generally treated as a normal ending of the contract rather than a resignation, so the full indemnity is usually payable. Check your contract, as some include their own retirement terms.

Kuwaiti nationals in the private sector

Kuwaitis working in private companies are registered with PIFSS, and their indemnity is linked to the social security system. The amount the employer pays can differ from the expatriate formula above, so Kuwaiti nationals should confirm their entitlement with PIFSS and their HR department.

Salary increases and decreases

Indemnity is based on your last salary. A pay rise near the end of your service increases the indemnity for all your years. If your salary was cut, keep records of your earlier salary and contract — salary reductions generally need your written agreement.

Getting your indemnity early

The law does not require early payment, but many employers agree to settle indemnity while you keep working — for example for school fees, a wedding or buying a home. Future indemnity is then usually counted only from the settlement date. Use the early settlement request letter in the calculator to ask HR in writing.

Your full final settlement

Indemnity is only one part of what you should receive when you leave. Your final settlement normally includes:

• End-of-service indemnity — calculated above.
• Unused annual leave — paid at your daily wage for the days you have not taken.
• Notice pay — if the contract is ended without the required notice (3 months for monthly-paid workers under Article 44).
• Unpaid salary — for days worked in your final month.
• Other contractual dues — such as an air ticket or bonus promised in your contract.
• Minus any loans or salary advances you owe the employer.

Add these in the final settlement section of the calculator to see your total.

What to do if your employer doesn’t pay your indemnity

1. Ask in writing. Email or write to HR requesting your final settlement, and keep a copy.
2. Collect your documents: employment contract, Civil ID, salary slips or bank statements, your resignation or termination letter, and any written messages about your dues.
3. File a complaint with the Public Authority for Manpower (PAM). PAM’s labour relations department will call both sides and try to settle the dispute.
4. Go to the labour court if PAM cannot settle it — the case is referred to the court, and labour cases are generally exempt from court fees. You can follow your case through the Ministry of Justice.

Glossary: indemnity terms in Kuwait

• Indemnity / gratuity / end-of-service benefit (EOSB) — different names for the same payment (in Arabic: مكافأة نهاية الخدمة).
• Final settlement — everything paid when you leave: indemnity plus leave, notice pay and other dues.
• Severance pay — a general term; in Kuwait it usually means the same as indemnity.
• Daily wage — monthly salary ÷ 26 (private sector) or ÷ 30 (domestic workers).
• 18-month cap — the maximum private-sector indemnity: 18 times your monthly salary.
• PAM — Public Authority for Manpower, which handles work permits and labour complaints.
• PIFSS — Public Institution for Social Security, the pension body for Kuwaiti nationals.

This guide is general information to help you understand your rights, not legal advice. For your specific case, check your contract and speak to PAM or a lawyer.