Under Kuwaiti labor law, your end-of-service indemnity (also called gratuity) depends on how long you served and whether you resigned or were terminated.
📌 If you resign with less than three years of service → you are not entitled to any indemnity.
📌 If your employer terminates your contract (for reasons not related to gross misconduct) → you are owed a full indemnity payment, even if your service is less than 3-years.
Real-Life Question: What If I Worked 2 Years, Went Home, and Came Back?
Let’s say you worked 2 years with a company and left. You received your indemnity (about 2 months’ salary). After 42 days, you returned to the same employer and worked 1 more year, then resigned.
❓ Do you get indemnity for that 1 year?
✅ Answer: No, because resignation before completing 3 years of service with the same continuous contract does not qualify for indemnity. The law treats your return as a new employment contract, so the clock resets.
If instead your employer had terminated you, then you would be entitled to a full indemnity for that 1- year.
What the Law Says
Under the Kuwait Private Sector Labor Law (Law No. 6 of 2010, amended by Law No. 85 of 2017), end-of-service indemnity is a guaranteed financial right for employees, but the entitlement depends on how your service ends. The law makes a clear distinction between workers who are terminated by their employer and those who resign voluntarily.
Indemnity Rules for Monthly Paid Employees
1. If You Are Terminated by Your Employer
When an employer ends your contract (and not due to gross misconduct under Article 41), you are entitled to the full indemnity as compensation for your service.
For the first five years of employment, the law awards you 15 days of salary per year. Starting from the sixth year onwards, the entitlement increases to one full month’s salary for each additional year.
The law also sets a maximum cap, stating that no employee can receive more than the equivalent of 18 months’ salary in total indemnity, no matter how many years they work.
Importantly, the salary used for this calculation is your last drawn remuneration—not just your basic salary, but the full monthly package you actually receive, unless your contract specifies otherwise.
2. If You Resign Voluntarily
Resignation changes the equation entirely. The law is less generous because the decision to leave comes from the employee.
If you resign with less than three years of continuous service, you receive no indemnity at all. Once you complete at least three years but less than five years, you are entitled to half (50%) of the calculated indemnity.
Between five and ten years of service, the percentage increases to two-thirds (66.67%) of the full indemnity amount.
Finally, if you resign after ten or more years, you are treated the same as someone who was terminated—you receive the full indemnity without any reduction. This structure is meant to reward long-term commitment while discouraging short-term resignations.
Real Example Indemnity Calculation Termination via Resignation
Suppose that your monthly salary 700 KD ; in total service period is 7 years, 11 months, and 30 days & Unused paid leave 2 Days & 5 days of unpaid leave. According to Kuwait’s Labor Law, indemnity Calculation will be follow:
📅 Service details
📌 Exceeding years (beyond 5): 2 years
📌 Daily salary: 700 ÷ 26 = 26.923 KD (≈ 26.92 KD)
✨ Indemnity components
🧾 Months (11 months → prorated as 11/12 × 30 = 27.5 days): 27.5 × 26.923 = 740.38 KD
Leave adjustments
Final payable — both cases , Cap rule
(Your adjusted total 4360.62 (4441.39 -134.62+53.85 KD) is well below the cap, so cap doesn’t reduce the payout here.)
If you were terminated by your employer, you are entitled to the full amount: 4,360.61 KD.
If you resigned after 7 years of service, then under the law, you receive two-thirds (66.67%) of this amount, which equals 2,907.14 KD.