Kuwait Indemnity Calculator : How to Calculate Your Labor Indemnity in 2025

Kuwait Indemnity Law & Calculator: How to Calculate Your Labor Indemnity in 2025 Kuwait Indemnity Calculator

Understanding Labor Indemnity in Kuwait

Labor indemnity, also known as end-of-service benefits, is an important part of Kuwait’s labor law that ensures employees receive fair financial compensation when their employment ends. Whether you resign, complete your contract, or are terminated, you may be entitled to indemnity based on your salary and years of service.

All private sector employees in Kuwait—both nationals and expatriates—are entitled to indemnity under the law, subject to some conditions. It protects your rights and guarantees fair treatment regardless of the job type or employer.

Key Components of Indemnity Calculation

To calculate indemnity, the law considers several important factors:

• Years of Service: The total number of years you have worked with your employer.
• Monthly Salary: Your final monthly salary.
• Daily Salary: Calculated by dividing your monthly salary by 26, which represents typical working days in Kuwait.
• Months and Days: Partial months and days beyond full years are also proportionally included.
• Pending Paid Leave: Any unused paid leave days should be added to your indemnity amount.

How is Indemnity Calculated as per Kuwait Labor Law?

The indemnity calculation differs based on how long you have worked:

For the First 5 Years

You are entitled to 15 days’ salary per year of service.

Calculation formula:
Indemnity = (Daily Salary × 15) × Number of Years

For Service Beyond 5 Years

You receive 30 days’ salary per year for every year worked beyond five years.

Calculation formula:
Indemnity = (Daily Salary × 30) × Number of Years Beyond 5

For Partial Months and Days

• Monthly Indemnity for Exceeding Years:
  (Number of Months/12)×(Daily Salary×30)(Number\ of\ Months / 12) \times (Daily\ Salary \times 30)(Number of Months/12)×(Daily Salary×30)
• Daily Indemnity for Exceeding Years:
  (Number of Days/365)×(Daily Salary×30)(Number\ of\ Days / 365) \times (Daily\ Salary \times 30)(Number of Days/365)×(Daily Salary×30)

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If the total service is less than 5 years, replace 30 with 15 in above formulas.

Including Pending Paid Leave

If you have any unused paid leave days, these are calculated as:
Paid Leave Amount = Number of Paid Leave Days × Daily Salary

This balance should be added to the total indemnity.

Total Indemnity Formula

To get the final indemnity amount, sum all parts:

Total Indemnity = First 5 Years Indemnity + Exceeding Years Indemnity + Monthly Indemnity + Daily Indemnity + Paid Leave Amount

Indemnity for Resigned vs. Terminated Employees

• If terminated by employer, you usually get full indemnity.
• If you resign before 5 years, indemnity may be half or less, depending on years served.
• If you resign after 5 years but less than 10, you may receive two-thirds of full indemnity.
• After 10 years, full indemnity is generally due even if you resign.

Sample Calculation

Let’s calculate for Ahmed who worked 7 years with a final salary of 220 KWD:

• Daily Salary = 220 ÷ 26 ≈ 8.46 KWD
• First 5 years = 5 × 15 × 8.46 = 634.5 KWD
• Last 2 years = 2 × 30 × 8.46 = 507.6 KWD
• Total Indemnity = 634.5 + 507.6 = 1142.1 KWD

Plus any pending paid leave entitlement.

How to Use the Kuwait Indemnity Calculator

Fill in your details here to estimate your indemnity:

• Start Date: [Select your employment start date]
• End Date: [Select your employment end date]
• Monthly Salary: [Enter your latest monthly salary]
• Pending Paid Leaves (Days): [Enter unused paid leave days]

Click Calculate to see your estimated indemnity as per Kuwait labor law.

Important Notes

• Indemnity calculations may differ in special contracts or government sectors.
• Employers cannot legally deny indemnity owed by law.
• For disputes, employees can approach Kuwait Ministry of Social Affairs and Labor.

Here are 5 examples of Kuwait labor indemnity calculations based on the law details:

Example 1:

Employee: Ahmed
Monthly Salary: 220 KWD
Service Duration: 5 years

Calculation:

• Daily Salary = 220 ÷ 26 = 8.46 KWD
• Indemnity for first 5 years = 5 × 15 × 8.46 = 634.5 KWD
• Total Indemnity = 634.5 KWD

Example 2:

Employee: Sara
Monthly Salary: 300 KWD
Service Duration: 7 years 6 months

Calculation:

• Daily Salary = 300 ÷ 26 = 11.54 KWD
• Indemnity first 5 years = 5 × 15 × 11.54 = 865.5 KWD
• Exceeding 2 years = 2 × 30 × 11.54 = 692.4 KWD
• Monthly indemnity for 6 months = (6 ÷ 12) × 30 × 11.54 = 173.1 KWD
• Total Indemnity = 865.5 + 692.4 + 173.1 = 1,731 KWD

Example 3:

Employee: Khaled
Monthly Salary: 450 KWD
Service Duration: 3 years 4 months 20 days
Pending Paid Leaves: 5 days

Calculation:

• Daily Salary = 450 ÷ 26 = 17.31 KWD
• Indemnity for 3 years = 3 × 15 × 17.31 = 778.95 KWD
• Monthly indemnity for 4 months = (4 ÷ 12) × 15 × 17.31 = 86.55 KWD
• Daily indemnity for 20 days = (20 ÷ 365) × 15 × 17.31 = 14.22 KWD
• Leave payment for 5 days = 5 × 17.31 = 86.55 KWD
• Total Indemnity = 778.95 + 86.55 + 14.22 + 86.55 = 966.27 KWD

Example 4:

Employee: Fatima
Monthly Salary: 600 KWD
Service Duration: 10 years exactly

Calculation:

• Daily Salary = 600 ÷ 26 = 23.08 KWD
• Indemnity first 5 years = 5 × 15 × 23.08 = 1,731 KWD
• Indemnity next 5 years = 5 × 30 × 23.08 = 3,462 KWD
• Total Indemnity = 1,731 + 3,462 = 5,193 KWD

Example 5:

Employee: Yousef
Monthly Salary: 350 KWD
Service Duration: 6 years 3 months 10 days
Pending Paid Leaves: 12 days

Calculation:

• Daily Salary = 350 ÷ 26 = 13.46 KWD
• Indemnity first 5 years = 5 × 15 × 13.46 = 1,009.5 KWD
• Indemnity exceeding 1 year = 1 × 30 × 13.46 = 403.8 KWD
• Monthly indemnity for 3 months = (3 ÷ 12) × 30 × 13.46 = 101.7 KWD
• Daily indemnity for 10 days = (10 ÷ 365) × 30 × 13.46 = 11.07 KWD
• Leave payment for 12 days = 12 × 13.46 = 161.52 KWD
• Total Indemnity = 1,009.5 + 403.8 + 101.7 + 11.07 + 161.52 = 1,687.59 KWD

Kuwait Indemnity Calculator : How to Calculate Your Labor Indemnity in 2025

FAQs

Q1: Who is entitled to labor indemnity in Kuwait?
A: All private sector employees, both Kuwaiti nationals and expats, are entitled to indemnity.

Q2: How is the daily salary calculated?
A: Monthly salary divided by 26 (average working days in Kuwait per month).

Q3: Does resignation affect indemnity amount?
A: Yes, resigning before completing 5 years reduces indemnity, but after 10 years full repayment is typical.

Q4: Are unused leave days included?
A: Yes, unused paid annual leave days are added to the indemnity value.

Q5: Can an employer avoid paying indemnity?
A: No, it is illegal for an employer to evade indemnity payments under Kuwaiti law.

This article helps employees understand their rights and calculate correct indemnity amounts, empowering them for fair treatment under Kuwait labor law.

Employee 1:

• Start Date: January 1, 2017
• End Date: January 1, 2025
• Monthly Salary: 500 KWD
• Pending Paid Leaves: 10 days

Calculation:

• Total Years Worked: 8 years
• Total Months Worked: 96 months
• Total Days Worked: 2,920 days
• Daily Salary: 500 KWD / 26 = 19.23 KWD
• Indemnity for First 5 Years: 19.23 KWD * 15 * 5 = 1,442.25 KWD
• Indemnity for Exceeding 5 Years: 19.23 KWD * 30 * 3 = 1,730.70 KWD
• Monthly Indemnity: (96 months / 12) * 19.23 KWD * 30 = 4,615.20 KWD
• Daily Indemnity: (2,920 days / 365) * 19.23 KWD * 30 = 4,553.60 KWD
• Leave Payment: 10 days * 19.23 KWD = 192.30 KWD
• Total Indemnity: 1,442.25 KWD + 1,730.70 KWD + 4,615.20 KWD + 4,553.60 KWD + 192.30 KWD = 12,534.35 KWD

Example 2:

Employee 2:

• Start Date: March 15, 2016
• End Date: June 30, 2023
• Monthly Salary: 750 KWD
• Pending Paid Leaves: 5 days

Calculation:

• Total Years Worked: 7 years
• Total Months Worked: 87 months
• Total Days Worked: 2,550 days
• Daily Salary: 750 KWD / 26 = 28.85 KWD
• Indemnity for First 5 Years: 28.85 KWD * 15 * 5 = 4,327.50 KWD
• Indemnity for Exceeding 5 Years: 28.85 KWD * 30 * 2 = 1,730.70 KWD
• Monthly Indemnity: (87 months / 12) * 28.85 KWD * 30 = 7,485.80 KWD
• Daily Indemnity: (2,550 days / 365) * 28.85 KWD * 30 = 5,723.45 KWD
• Leave Payment: 5 days * 28.85 KWD = 144.25 KWD
• Total Indemnity: 4,327.50 KWD + 1,730.70 KWD + 7,485.80 KWD + 5,723.45 KWD + 144.25 KWD = 19,411.70 KWD

Example 3:

Employee 3:

• Start Date: July 1, 2020
• End Date: July 1, 2025
• Monthly Salary: 1,000 KWD
• Pending Paid Leaves: 12 days

Calculation:

• Total Years Worked: 5 years
• Total Months Worked: 60 months
• Total Days Worked: 1,826 days
• Daily Salary: 1,000 KWD / 26 = 38.46 KWD
• Indemnity for First 5 Years: 38.46 KWD * 15 * 5 = 2,884.50 KWD
• Indemnity for Exceeding 5 Years: 0 KWD (No exceeding years)
• Monthly Indemnity: (60 months / 12) * 38.46 KWD * 30 = 6,923.10 KWD
• Daily Indemnity: (1,826 days / 365) * 38.46 KWD * 30 = 5,601.00 KWD
• Leave Payment: 12 days * 38.46 KWD = 461.50 KWD
• Total Indemnity: 2,884.50 KWD + 6,923.10 KWD + 5,601.00 KWD + 461.50 KWD = 15,870.10 KWD

Example 4:

Employee 4:

• Start Date: January 1, 2018
• End Date: August 1, 2025
• Monthly Salary: 1,200 KWD
• Pending Paid Leaves: 8 days

Calculation:

• Total Years Worked: 7 years
• Total Months Worked: 88 months
• Total Days Worked: 2,556 days
• Daily Salary: 1,200 KWD / 26 = 46.15 KWD
• Indemnity for First 5 Years: 46.15 KWD * 15 * 5 = 3,462.50 KWD
• Indemnity for Exceeding 5 Years: 46.15 KWD * 30 * 2 = 2,769.00 KWD
• Monthly Indemnity: (88 months / 12) * 46.15 KWD * 30 = 11,292.00 KWD
• Daily Indemnity: (2,556 days / 365) * 46.15 KWD * 30 = 7,359.34 KWD
• Leave Payment: 8 days * 46.15 KWD = 369.20 KWD
• Total Indemnity: 3,462.50 KWD + 2,769.00 KWD + 11,292.00 KWD + 7,359.34 KWD + 369.20 KWD = 25,252.04 KWD

Example 5:

Employee 5:

• Start Date: March 1, 2019
• End Date: March 1, 2024
• Monthly Salary: 600 KWD
• Pending Paid Leaves: 6 days

Calculation:

• Total Years Worked: 5 years
• Total Months Worked: 60 months
• Total Days Worked: 1,826 days
• Daily Salary: 600 KWD / 26 = 23.08 KWD
• Indemnity for First 5 Years: 23.08 KWD * 15 * 5 = 1,731.00 KWD
• Indemnity for Exceeding 5 Years: 0 KWD (No exceeding years)
• Monthly Indemnity: (60 months / 12) * 23.08 KWD * 30 = 4,153.44 KWD
• Daily Indemnity: (1,826 days / 365) * 23.08 KWD * 30 = 4,552.60 KWD
• Leave Payment: 6 days * 23.08 KWD = 138.48 KWD
• Total Indemnity: 1,731.00 KWD + 4,153.44 KWD + 4,552.60 KWD + 138.48 KWD = 10,575.52 KWD

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Kuwait Indemnity Calculator : How to Calculate Your Labor Indemnity in 2025