The formula
| Service | Indemnity per year |
|---|---|
| Years 1–5 | 15 days’ remuneration (monthly ÷ 26 × 15) |
| Year 6 onwards | 1 month’s remuneration |
| Cap | 1.5 years’ remuneration |
The base is the last full remuneration: basic pay plus contractual allowances and periodic bonuses (Art. 55), not basic alone.
Worked example
7 years’ service, KWD 900 a month
- Daily wage: 900 ÷ 26 = KWD 34.62
- First 5 years: 5 × 15 × 34.62 = KWD 2,596.15
- Next 2 years: 2 × 900 = KWD 1,800
- Termination: KWD 4,396.15
- Resignation (5–10 years, ⅔): KWD 2,930.77
For Kuwaiti nationals, employers may not offset their PIFSS contributions against the indemnity. See the Kuwait payroll guide.
Frequently asked questions
How is end-of-service indemnity calculated in Kuwait?
For monthly-paid staff: 15 days' remuneration per year for the first five years, then one month per year, capped at one and a half years' remuneration (Labour Law 6/2010, Art. 51).
What happens to indemnity on resignation in Kuwait?
On an open-ended contract: nothing under three years' service, half for 3–5 years, two thirds for 5–10 years, and the full amount after 10 years (Art. 53). A woman who resigns within one year of marriage receives the full amount.
Why does the calculator divide by 26?
Kuwaiti practice converts a monthly wage into a daily wage over 26 working days, so 15 days' remuneration is 15 ÷ 26 of a month. Some employers use 30. Check your contract or internal policy.