Kuwait Indemnity Explained: Law 6/2010, the 26-Day Rule and Resignation

Kuwait’s private-sector indemnity follows Law No. 6 of 2010. It pays more per year than many people expect after year five – but it also cuts the amount sharply if you resign early. Here is how it works, with the calculation shown line by line.

The formula in Article 51

For workers paid monthly, Article 51 of Law No. 6 of 2010 sets the indemnity at 15 days’ remuneration for each of the first five years of service and one month’s remuneration for each year after that. Fractions of a year count in proportion. The total is capped at one and a half years’ remuneration (18 months).

The indemnity is calculated on your last remuneration – the salary you were actually receiving, not only the basic salary.

Why the daily wage is your salary divided by 26

Kuwaiti practice treats a working month as 26 days when converting a monthly salary into a daily wage for indemnity. So “15 days” for each of the first five years means 15 ÷ 26 of a month’s salary – a little more than half a month. From the sixth year, each year earns a full month’s salary.

Example: a monthly salary of KWD 520 gives a daily wage of KWD 20 (520 ÷ 26).

Worked example 4 years on KWD 520, contract ended by the employer

Daily wage: KWD 20.000 (monthly ÷ 26)

  • 4 yrs × 15 days/yrKWD 1,200.000
  • Estimated entitlementKWD 1,200.000
Worked example 12 years on KWD 900, contract ended by the employer

Daily wage: KWD 34.615 (monthly ÷ 26)

  • 5 yrs × 15 days/yrKWD 2,596.154
  • 7 yrs × 26 days/yrKWD 6,300.000
  • Estimated entitlementKWD 8,896.154

What happens if you resign (Article 53)

For indefinite (open-ended) contracts, a worker who resigns receives only part of the indemnity, depending on service:

Service when resigningShare of the indemnity
Less than 3 yearsNothing
3 to less than 5 yearsHalf
5 to less than 10 yearsTwo thirds
10 years or moreThe full indemnity
Worked example The same 4 years on KWD 520 – but the worker resigned

Daily wage: KWD 20.000 (monthly ÷ 26)

  • 4 yrs × 15 days/yrKWD 1,200.000
  • Total before adjustmentsKWD 1,200.000
  • Resignation share: half× 0.5
  • Estimated entitlementKWD 600.000

These reductions apply to resignation from an indefinite contract. When a fixed-term contract simply expires, or the employer ends the contract, the full indemnity is due.

When the indemnity can be lost

Article 41 allows an employer to dismiss a worker for serious misconduct listed in the law without notice or indemnity. Ordinary termination by the employer does not reduce the indemnity.

Daily, hourly and piece-rate workers

Workers paid by the day, hour or piece have a lower scale: 10 days’ wage for each of the first five years, then 15 days per year, capped at one year’s wage. Our calculator covers monthly-paid workers, who are the large majority.

Domestic workers and government employees

  • Domestic workers (Article 20 visas) are covered by Law No. 68 of 2015, which gives one month’s wage for each year of service at the end of the contract.
  • Non-Kuwaitis in ministries and government bodies follow their contracts and Civil Service Commission rules; Kuwaitis are covered by the social security pension system (PIFSS).

Before you resign: three things to check

  1. How close are you to 3, 5 or 10 years? Crossing a threshold changes your share from nothing to half, from half to two thirds, or to the full amount.
  2. Is your contract indefinite or fixed-term? The reductions apply to resignations from indefinite contracts.
  3. Is the salary used for the calculation your full current salary?

Disputes are handled by the Public Authority for Manpower (PAM), which also offers complaint services online.

Calculate your Kuwait indemnity →

Questions

How much indemnity for 5 years in Kuwait?

75 days of wage (5 × 15 days), with the daily wage being your monthly salary ÷ 26 – roughly 2.9 months’ salary if the employer ends the contract.

Is there a maximum indemnity in Kuwait?

Yes – one and a half years’ remuneration (18 months).

I resign after 2 years. Do I get anything?

Not on an indefinite contract – the minimum for a resignation share is 3 years.

Sources

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This calculator gives an estimate based on our reading of the published law. It is not legal advice and is not affiliated with any government. Final amounts depend on your contract and records. Read the full disclaimer