Kuwait Law: Termination Indemnity/End of Service Benefits

Post by Fajer Ahmed

terminated

I am writing this in the simplest terms possible (and not in legal jargon) because I want to make the law simple and understandable by all.

Here is a simple guide to calculating your termination indemnity (for private sector employees):

Payment Method

Who terminated the contract

Years Worked

Days Paid

monthly

you were terminated

Less than 5 years

15 days per year

monthly

you were terminated

more than 5 years

one month per year

monthly

you terminated the contract

3 to 5 years

1/2 of 15 days per year

monthly

you terminated the contract

5 to 10 years

2/3 of one month per year

monthly

you terminated the contract

more than 10 years

one month per year

daily or weekly

you were terminated

Less than 5 years

10 days per year

daily or weekly

you were terminated

more than 5 years

15 days per year

daily or weekly

you terminated the contract

3 to 5 years

1/2 of 10 days per year

daily or weekly

you terminated the contract

5 to 10 years

2/3 of 15 days per year

daily or weekly

you terminated the contract

more than 10 years

15 days per year

Please note the following:

– You are being paid by days. Your end of service is an x amount of working days. So it is important how to calculate how much your day is worth. For those paid on a monthly basis you divide your salary by 26 even if you only work 20 days a month (unless your policies and regulations at work are different, giving you less working days a month)

– If you are Kuwaiti, you still deserve end of service benefits, but your social security amounts accured towards your company will be deducted.

– You have one year since the day you leave work to ask for your end of service benefits.

– If you are ending the contract then I am assuming you have an indefinite contract

If you are having any issues with your employer, please email me ask@fajerthelawyer.com. I have made a promise to myself to personally get back to everyone within 24 hours (unless it is the weekend)!

Post by Fajer Ahmed – Legal Counsel
The legal opinions expressed in this post are those of the author Fajer. Opinions expressed by Mark or any other writer on 248am.com are those of the individual’s and in no way reflect Fajer’s opinion.


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18 comments, add your own...


  1. MK says:

    For more than 5 years, isn’t it 15 days for the first 5 years, plus 1 month for every additional year? The way I understand the chart is once you reach 5 years, you get 1 month pay per year. So 6 years service = 6 months pay, not 2.5 plus 1?

    Also, how about Kuwaitis with the new law? Does the company have the right to deduct whatever has been paid towards the PIFFS?

  2. q80 says:

    Same question:
    how about Kuwaities with the new law? Does the company have the right to deduct whatever has been paid towards the PIFFS?

    Another question:
    According to law, what is the maximum number of “leave days in my balance” I can get money for if my contract is terminated?

    Thank you so much

    • aaa says:

      I had that question last time, Fajer answered it in this post already:

      “– If you are Kuwaiti, you still deserve end of service benefits, but your social security amounts accured towards your company will be deducted.”

      Also labor law is 60 days but I’m not a lawyer

  3. Zaitsev says:

    When you say 1 month salary, is it the total salary you were getting or basic salary only? A salary is usualy made up of basic amount + housing allowance + transportation allowance or telephone etc…please if you can clarify

  4. Ozzy says:

    Is the indemnity calculated according to the last salary given by the company? (What if someone worked in a place for 10 years but had a salary increase. Few times over that span).

    For the situation let’s say a salary increase happened on the fifth of the ten years.

    Would the first 5 of the 10 months be paid according to the salary at the time of those first five years?

  5. Ahmed says:

    Why am I being terminated? I didn’t even do anything!

  6. Prabhu Ram says:

    Dear Mark & Fajer,
    Please recheck the indemnity calculation table (row 2 & 5). If you get terminated after 10 years of service, you will not get 1 month salary for each year of service, rather you will get 15 days salary for the first 5 years and 1 month salary from the 6th year onwards. Correct me if I’m wrong.

  7. Prabhu Ram says:

    Please mention what the law says…not your own practice. A company can have an indemnity policy to pay more than what is mandated in labor law but can’t pay less than what is mandated. If your company has a policy of 1 month indemnity doesn’t mean that the law mandates the same.

  8. John says:

    For any number of years you worked e.g. 5 years, will it be including annual paid leaves days or it should be 5 years worked excluding annual paid leaves days.
    In later case, if we have worked for 5 years and 5 months , then our actual no. of years counted will be 5 years. is it inline with labor law ?

  9. adly says:

    Fajer, thanks for the useful information. What about if an employee resigns? What are the indemnity rules for employees who resign after 1 year, 2 years, etc?

  10. Audrey says:

    How About working for 2yrs more and they forcing terminate me..my salary bracket was 250 but im getting monthly was 300 kd. How much the calculation pls…

  11. Acha says:

    If my company would like to extend its contract over 5 years and opt to finish it in just 3 months, does that mean: 15 days for first 5 years + (3/12 X 1 month) = would be my ESB? Please clarify. Thanks.


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