Indemnity calculation in Kuwait for 2 years is based on the Kuwaiti labor law which pays employees an end-of-service indemnity when their employment ends. The essential formula and example for 2 years are as follows:
Daily Salary and Calculation Basics
The first step in indemnity calculation is depending on the daily salary, which is done by dividing the employee’s monthly salary by 26 . This divisor represents the typical number of working days in a month in Kuwait.
Next, the indemnity amount depends on how many years the employee has served under the contract. Labor law differentiates between the first five years of service and any years beyond that:
For the first 5 years, the employee is entitled to indemnity equivalent to 15 days of daily salary per year worked.
Beyond 5 years, the indemnity entitlement increases to 30 days of daily salary per additional year of service.
Partial Months and Days
Employment length is commonly not an exact number of years, so months and days are also counted on a prorated basis.
For services under 5 years, indemnity for months and days is calculated using 15 days’ salary per year,
converted proportionally for months and days. For services over 5 years, 30 days’ salary per year is used similarly.
Example Calculation
Suppose that Mrs. Fatima, who worked in Kuwait for 2 years with a monthly salary of 300 KWD. Her indemnity calculation proceeds as follows:
1. Calculate of Fatima daily salary= Monthly Salary÷26
Daily Indemnity : 300 KWD /26 = 11.54 KWD
2. Calculate indemnity for 2 years (within first 5 years):
Indemnity : 11.54×15 days/year× 2 years= 346.20 KWD
So, after working 2 years with a monthly salary of 300 KWD, Thus The Mrs. Fatima end-of-service indemnity is 346.20 KWD.
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Important Notes
If the Mrs. Fatima had resigned after these two years, and assuming the resignation rules apply, She might not be entitled to any indemnity if she resigned before completing three years.
Additional Considerations
Unpaid leave: If an employee had unpaid leave, those days typically reduce the total service duration and thereby the indemnity.
Paid leave balance: Unused paid leave may be added on top of indemnity.
Contract type and termination reason can also affect indemnity entitlements.
This is simple formula helps you estimate your compensation under Kuwaiti labor law for durations under 5 years. Remember, resignations before 3 years may mean no indemnity, and partial indemnities apply for 3-10 years service as per the rules above.
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