Kuwait Indemnity vs UAE Gratuity: A Side-by-Side Comparison
Kuwait and the UAE use a similar two-band structure, but a different daily-wage divisor, a different cap, and very different resignation rules. Here's the full comparison.
The two formulas, side by side
| Rule | 🇰🇼 Kuwait indemnity | 🇦🇪 UAE gratuity |
|---|---|---|
| First 5 years | 15 days' pay / year | 21 days' pay / year |
| Beyond 5 years | 30 days' (1 month) pay / year | 30 days' pay / year |
| Daily wage divisor | Monthly pay ÷ 26 | Basic monthly salary ÷ 30 |
| Wage basis | Full remuneration incl. regular allowances | Basic salary only |
| Resignation | Reduced: 0% under 3yr, 50% 3–5yr, ⅔ 5–10yr, 100% at 10yr+ | No reduction (after 1 year) |
| Cap | 18 months' pay | 24 months' (2 years') wages |
Sources: Kuwait Labour Law and UAE Federal Decree-Law 33/2021.
Worked example: 6 years of service, terminated
Using the same hypothetical monthly wage figure of 600 (in each country's own currency — KWD and AED are very different in value, so this compares the formula, not real purchasing power):
- Kuwait, 600 KWD, 6 years: daily wage = 600 ÷ 26 = 23.08; first 5 years = 5×15×23.08 = 1,730.8; year 6 = 1×30×23.08 = 692.3; indemnity ≈ KWD 2,423.
- UAE, 600 AED basic, 6 years: daily wage = 600 ÷ 30 = 20; days = (5×21)+(1×30) = 135; gratuity = 135×20 = AED 2,700.
Interesting quirk: even though Kuwait's first-5-year day-rate is lower (15 vs 21 days), its ÷26 daily-wage divisor (versus the UAE's ÷30) partly offsets that — a smaller divisor means a higher daily wage for the same monthly figure, which is why the two totals land closer together than the day-counts alone would suggest.
Resignation changes the picture a lot
If the same Kuwait employee resigned at 6 years instead of being terminated, the 5–10-year tier applies a ⅔ multiplier: KWD 2,423 × ⅔ ≈ KWD 1,615. The equivalent UAE employee who resigned would still get the full AED 2,700 — no reduction at all once past one year of service.
The cap difference
Kuwait indemnity is capped at 18 months' pay; UAE gratuity is capped at 24 months' (2 years') wages — a meaningfully higher ceiling for very long-tenured, high-earning employees.
Run your own numbers
Try the Kuwait Indemnity Calculator and the UAE Gratuity Calculator with your real salary and service.
Frequently asked questions
Why does Kuwait use ÷26 and the UAE use ÷30 for the daily wage?
Kuwait's Labour Law defines the daily wage as monthly pay divided by 26 (an assumed working-days basis), while the UAE's Decree-Law 33/2021 divides basic monthly salary by 30 (a calendar-day basis). Both are the statutory conventions in each country — the different divisor is a real structural difference, not an error.
Does resignation reduce indemnity in Kuwait?
Yes. Kuwait reduces the indemnity on a sliding scale if you resign: nothing under 3 years, half for 3–5 years, two-thirds for 5–10 years, and the full amount at 10+ years. UAE gratuity is not reduced for resignation once you pass one year.
Which has a higher cap — Kuwait or the UAE?
The UAE's cap (2 years'/24 months' wages) is higher than Kuwait's cap (18 months' pay).
Is Kuwait indemnity on basic salary or full pay?
Full remuneration, including regular allowances — broader than the UAE's basic-salary-only rule.