Table of Contents


Table of Contents


Kuwaiti Dinar (KWD)

Payroll Frequency

Monthly or Bi-weekly

Employer Taxes


About Kuwait

An Arab country located in the Persian Gulf, Kuwait has a population of 4.5 million people, 70% of whom are expatriates. With oil reserves having been discovered in the 1930s, Kuwait underwent massive modernization during most of the 20th century. It was invaded by Saddam Hussein’s Iraq in 1990, resulting in the First Gulf War which ended after military intervention by a coalition led by the United States. It’s a constitutional sovereign state with a semi-democratic political system. It is a wealthy country with the fourth-highest per capita income in the world. Kuwait has a relatively open society compared to its peers in the region, promotes the arts and culture, and also houses the largest opera house in the Middle East. Most Kuwaiti citizens are Muslims, with Indians and Egyptians comprising the majority of the ex-pats.

Employment Relationship

• Permanent Employment

Per Kuwait's labor law, employment contracts made for an indefinite term are considered to be permanent. Such employees are entitled to termination benefits if their employment agreement is terminated after three years of service. Whether the work contract is for a particular or an indefinite term, the worker's remuneration may not be reduced during the validity period of the contract. The employer may not assign the worker any task that is not consistent with the nature of the work stated in the contract or not suitable to the worker's qualifications and experience based on the agreement signed with them.

• Fixed-Term or Specific-Purpose Contracts

Kuwait's labor law permits the use of fixed-term employment contracts. The term of such agreements must be at least 1 year and not exceed 5 years. Fixed-term employment contracts may be renewed after expiration. If the contract is not renewed, but the employee and employer continue to implement it, it will be deemed to be renewed for a similar period with the same conditions unless the parties agree otherwise.

• Temporary Employment Contratcs

Although Kuwait's labor law does not offer any provisions on temporary contracts, a generally accepted approach that minimizes compliance risk is to ensure that the agreement timeframe is bound to a documented end date (i.e., a project plan, a sales season, etc.) noted elsewhere in the organization's paperwork.

Probationary Period

Kuwait's labor law provides that employment contracts in the private sector can include probationary periods not exceeding 100 days. Both the employer and the employee can terminate the agreement during the probationary period without notice. An employee cannot be on probation more than once with the same employer. If the employer terminates the contract, they must pay the employee an appropriate end of service benefit. Employees in government jobs can be put on probation for a maximum of three months.

Working Hours

Kuwait's labor law stipulates that the maximum working hours for private and public sector employees are 48 hours per week and eight hours per day. The maximum working hours are 36 per week during the month of Ramadan. Employees working more than this number of weekly or daily hours are eligible for overtime. Employees in the public sector are not allowed to work for more than two overtime hours per day. Juveniles shall work for maximum of 6 hours per day, and must not be employed for more than 4 hours straight, followed by a break of not less than 1 hour. 

Holidays / PTO

• Statutory Holidays

Hijri New Year Day – Variable; Isra and Mi’raj Day – Variable; Three days on Eid-Al-Fitr – Variable; Waqfat Irafat – Variable; Three days on Eid-Al-Adha – Variable; Prophet’s Birthday – Variable; National Day – Variable; Gregorian New Year – January 1.

• Paid Annual Leave

Per the labor law of Kuwait, employees accrue or accumulate annual leave after six months of service. Employees in the private sector are entitled to 30 working days of paid annual leave. Weekends, official holidays, and sick leave falling during the annual leave are not counted as annual leave. Employees are entitled to a leave for the fractions of the year in proportion to the period they spent working, even during the first year of service. Employers must pay their employees before they take their annual leave. Employers also have the right to determine the date of annual leave. Annual leave can be divided after the first 14 days with the employee's consent. Also, employees have the right to accumulate their leave for two years and take all of it at once with their employer's consent. The annual leave can be accumulated for more than two years with the consent of both parties. Employees are entitled to compensation for their accumulated and unused leave upon the expiration of their contract.

• Sick Leave

Kuwait's labor law entitles both private and public sector employees to annual sick leave as follows: 15 days at full pay Next 10 days at 75% pay Next 10 days at 50% pay Next 10 days at 25% pay Next 30 days without pay. Employers are liable for sick leave benefits. Employees must provide a medical report from the doctor appointed by the employer or a doctor at a government medical center. In the event of a conflict regarding the necessity of sick leave or its duration, the government doctor's report shall be adopted.

• Maternity Leave

Kuwaiti labor law provides a paid maternity leave of 70 days to pregnant employees. The employee may take a maximum of 30 days of maternity leave before the date of delivery and 40 days after delivery. The employee is entitled to 100% of their earnings during maternity leave. The employer is responsible for paying these maternity benefits. After the end of maternity leave, the employer may give the working woman, at her request, unpaid leave for a period not exceeding 4 months to care for the baby. The employer may not terminate a woman's services during this leave or while the employee is absent from work due to a sickness corroborated by a medical certificate explaining that the illness resulted from pregnancy or childbirth.

• Paternity Leave

Kuwaiti labor law does not provide statutory paternity leave.

Termination of Employment

• Notice Period

Per Kuwaiti labor law, an indefinite term employment contract can be terminated by providing advance notice as follows: The notice period is 3 months for employees earning a monthly remuneration. The notice period is 1 month for all other employees. The notice period can be waived by paying remuneration in lieu of the prescribed notice period. If the party wishing to terminate the contract does not abide by the notice period, that party shall be obliged to pay compensation for the notice period equal to the employee's remuneration for the same period.

• Severance Benefits

Per Kuwaiti labor law, employees who are dismissed for the following reasons are entitled to severance benefits: If the employer terminates the contract If the duration of the contract expires without renewal If the contract is terminated due to bankruptcy, death of the employee, or is terminated by the employee for valid reasons If a female employee terminates the contract due to marriage within a year from the date of marriage Employees are entitled to an end of service benefit as follows: Employees paid on a daily, weekly, hourly, or piecework basis are entitled to ten days' remuneration for each of the first five years of service and 15 days' remuneration for each year after that. The total end-of-service benefit cannot exceed one year's remuneration. Employees paid monthly are entitled to 15 days' remuneration for each of the first five years of service and one month's salary for every year after that. The total end-of-service benefit must not exceed one and a half years' remuneration. Employees are entitled to half of the above end-of-service benefits stipulated if the employee terminates a work contract that has an indefinite term, and the employee has been at the employer's service for at least three years but not more than five years. If the service period reaches five years but does not exceed ten years, the employee shall be entitled to 2/3rds of the benefit. If the service period exceeds ten years, the employee shall be entitled to the full benefit.