Kuwait End-of-Service Indemnity 2026: The Complete Guide
Everything you need to know about Kuwait end-of-service indemnity under Labour Law No. 6 of 2010 — the two bands, the ÷26 divisor, resignation reductions and the 18-month cap.
Kuwait calls end-of-service pay indemnity, and its rules are more layered than Qatar’s flat system. There are two rate bands, a distinctive daily-wage divisor of 26, reductions if you resign early, and a hard cap. This guide walks through all of it under Kuwait’s Labour Law No. 6 of 2010.
The two rate bands
Indemnity accrues at two different rates depending on tenure:
- 15 days’ pay per year for each of the first 5 years, and
- One month’s pay per year for every year after 5 years.
So longer service is rewarded with a higher accrual rate once you pass the five-year mark.
The ÷26 daily wage
Kuwait’s daily wage is monthly pay ÷ 26, not ÷30. This reflects a payroll convention based on a six-day working week. It is the same divisor Kuwait uses for leave. “Pay” here means full remuneration including regular allowances — broader than Qatar’s basic-wage-only base.
Resignation reductions
Unlike Qatar, Kuwait reduces indemnity for employees who resign, on a sliding scale by length of service:
| Years of service | Indemnity on resignation |
|---|---|
| Under 3 years | Nothing |
| 3 to 5 years | Half |
| 5 to 10 years | Two-thirds |
| 10 years or more | Full amount |
These reductions apply to resignation. Termination generally pays the full calculated indemnity.
The 18-month cap
No matter how long you serve, your total indemnity can never exceed 18 months’ (1.5 years’) pay. Very long-tenured, high-earning employees can reach this ceiling.
Worked example
Take an employee on KWD 600 per month who is terminated after 6 years:
| Component | Working | Result |
|---|---|---|
| First 5 years | 5 × 15 × (600 ÷ 26) | KWD 1,731 |
| Year 6 | 1 × 30 × (600 ÷ 26) | KWD 692 |
| Total indemnity | ≈ KWD 2,423 |
Run your own numbers on the Kuwait Indemnity Calculator, which applies the bands, divisor, resignation reductions and cap automatically.
How indemnity fits your final settlement
Indemnity is one line of your leaving pay. You should also receive notice pay where notice was not served — see the Kuwait notice period guide — and any unused annual leave paid out. If you are leaving during probation, different rules apply, covered in the Kuwait probation guide. Explore all tools from the Kuwait hub.
How Kuwait compares
Kuwait’s ÷26 divisor, resignation reductions and 18-month cap make it quite different from the UAE’s ÷30 basic-wage system. For a side-by-side breakdown, read our Kuwait indemnity vs UAE gratuity comparison, or see all six Gulf systems in the GCC end-of-service comparison.
Authoritative sources
Kuwait’s Labour Law No. 6 of 2010 is administered by Kuwait’s Public Authority of Manpower (PAM) and recorded in the ILO NATLEX record for Kuwait Labour Law No. 6 of 2010. For an independent legal overview, see DLA Piper’s Global Employment guide.
When indemnity is paid
Your end-of-service indemnity is settled with your final dues when your employment ends. Because Kuwait uses full remuneration including regular allowances as the base — broader than a basic-wage-only system — the figure you record on your payslip each month matters. Keep your contract and payslips, since they establish both your pay level and your start date, the two inputs that drive the whole calculation.
Termination versus resignation
The distinction is central in Kuwait. A termination generally pays the full calculated indemnity, while a resignation is reduced on the sliding scale — nothing under three years, half at three to five, two-thirds at five to ten, and the full amount only at ten years or more. Before you resign, it is worth checking where you sit on that scale, because staying a little longer can move you into a higher band.
The cap in practice
The 18-month ceiling rarely bites for average tenures, but it is real for long-serving, higher-paid employees. Always compute your band-based figure and then compare it against 18 months of pay, taking the lower of the two. If you are close to the cap, additional years add nothing to your indemnity, which is useful to know when planning a long career with one employer.
Key takeaways
- 15 days/year for the first 5 years, 1 month/year after, on a ÷26 daily wage.
- Base is full pay including regular allowances.
- Resignation is reduced by tenure; termination pays in full.
- Total is capped at 18 months’ pay.
Frequently asked questions
How is indemnity calculated in Kuwait?
Fifteen days' pay for each of the first five years and a full month's pay for each year after five, using a daily wage of monthly pay ÷ 26, capped at 18 months' total pay.
Do I get indemnity if I resign in Kuwait?
Yes, but reduced: nothing under 3 years, half for 3–5 years, two-thirds for 5–10 years, and the full amount at 10 years or more.
What is the maximum Kuwait indemnity?
Total indemnity is capped at 18 months (1.5 years) of pay, regardless of how long you served.
Is Kuwait indemnity on basic or full pay?
On full remuneration including regular allowances — broader than Qatar's basic-wage-only base.
Why does Kuwait divide by 26?
Kuwait's payroll convention treats the working month as 26 days, reflecting a six-day working week. The same divisor is used for leave.